After a request for a rehearing, the Fifth Circuit Court of Appeals has decided to listen to arguments from a Latin American group of guest workers hired to maintain New Orleans hotels after Hurricane Katrina.
The guest workers sued the luxury hotel chain, Decatur Hotels, arguing they were not reimbursed relocation expenses. The guest workers, with legally obtained H-2B visas, paid between $3,000 and $5,000 in expenses for recruitment fees, transportation and visa expenses. They came to the hurricane-ravaged city on promises they could work 40 hours a week, plus overtime. Instead, they say, they worked as little as 10 hours a week. Under the terms of their visas, the guest workers could not legally find other jobs.
The Appeals Court originally dismissed the case in 2009, holding that the Fair Labor Standards Act does not require an employer to cover any of the guest worker's expenses incurred prior to their employment with the hotel.
After Katrina devastated the New Orleans area, Decatur was unable to recruit local replacements for more than 500 open job positions.
Virginia Pickering, a Baton Rouge businesswoman who operated Accent Personnel Services, Inc., contacted Decatur's chief executive officer, F. Patrick Quinn III, to discuss the possibility of hiring foreign workers to fill temporary job openings. Quinn agreed and hired Accent Personnel to secure the temporary workers. Pickering charged Decatur $300 per job position filled and Decatur was responsible for the H-2B sponsorship-application fees.
VP Consultants, Inc., a second company operated by Pickering, identified companies sponsoring H-2B visas to recruitment companies that represented the foreign workers. VP Consultants received $900 per Decatur job position and secured approximately 270 foreign workers for the hotel chain.
According to court records, the guest workers' recruitment expenses were incurred without Decatur's knowledge or approval and were often, if not always, incurred before the guest worker's learned of Decatur.
In the original lawsuit filed Aug. 16, 2006, 81 of the foreign workers filed a class action against Decatur Hotels, LLC and F. Patrick Quinn, III. The lawsuit maintains the defendant should have paid expenses in the first week of work in order to comply with labor laws.
Decatur filed a motion to dismiss with the Circuit Court arguing that the Fair Labor Standards Act does not require an employer to reimburse guest workers for expenses which incurred before relocating to the employer's location. The Court denied the motion but granted an interlocutory appeal to the Fifth Circuit Court of Appeals.
In an opinion released July 21, 2009, the Appeals Court agreed with the defendant and ordered judgment in favor of Decatur.
The Court held that Decatur is not liable under the Act and the Act does not require an employer to reimburse recruitment, transportation or visa expenses.
However, the Appeals Court granted a petition for rehearing en banc which will be held during the week of May 24.
The workers are represented by New Orleans attorney Tracie L. Washington. Other class counsel includes attorneys from the Immigrant Justice Project Southern Poverty Law Center in Montgomery, Ala. and the National Immigration Law Center in Washington, D.C.
Decatur owns and operates eight luxury hotels in the New Orleans area. After Hurricane Katrina, Decatur's staff dropped from about 650 workers to approximately 110 workers.