Counsel for spa workers who are part of an “upcoming mass layoff” of independent contractors at the Grand Wailea, a Waldorf-­Astoria Resort, said workers had until this morning to decide whether they would sign an arbitration agreement to keep their jobs, which are converting into W-2 positions.

Current spa workers’ employment contracts are slated for termination Thursday — an action that comes as the giant luxury hotel is fighting a class-action suit alleging that it misclassified workers as independent contractors, engaged in unfair labor practices and violated wage and hour laws.

That case filed in U.S. District Court by Maui resident and class representative Laurie Bolos on Feb. 23 alleged that the hotel staff at the Grand Wailea Resort in Hawaii and at the Waldorf Astoria Beverly Hills in California assigned to the salon and spa, grounds­keepers and facilities maintenance workers were misclassified as independent contractors, in a “fraudulent scheme” to lower business costs.

The suit states that this alleged action “was taken predominantly to relieve defendants of their legal obligations under federal and state labor laws to fairly compensate their employees, pay them overtime and minimum wage, pay Social Security taxes on their income, and provide them with required disability insurance, workers’ compensation, retirement benefits, paid time off, sick leave, and health insurance.”

Britt E. Harmssen, co- founding partner of Harmssen LaPointe P.C., which is representing the class of members along with The Law Offices of Daniel Feder, said Tuesday that the class members who currently work at the hotel were informed that their jobs would end Thursday in anticipation of the Feb. 28 grand opening of a new spa called Kilolani Spa.

Harmssen said spa workers had to reapply for their jobs, and those getting an offer were provided only 24 to 48 hours to accept the job offer and given until 9 a.m. today to sign an arbitration agreement, “which purports to waive all their legal rights to participate in the class, which is extremely prejudicial.”

“Our position was, ‘You should just transition them and reclassify them. There’s no reason to have to fire them,’” she said. “But strategically, terminating their employment and rehiring them was their strategy to basically get them to sign this mandatory arbitration agreement.”

She said late last week hotel management allegedly began coercing workers via text, telephone and email to sign the new-hire paperwork, including the arbitration agreement.

“We had no less than like three town halls with all of (the workers) this week. They are terrified. The emotional distress is great,” Harmssen said.

A spokesperson at Grand Wailea, a Waldorf Astoria Resort, said Tuesday in an email to the Honolulu Star-Advertiser, “We believe these allegations are meritless. Grand Wailea cares deeply about our workforce and is committed to being a best-in-class employer. We look forward to offering a significant number of employment opportunities to the local community when we open the state’s largest spa.”

The Grand Wailea said it doesn’t classify the transition as layoffs, but rather the ending of agreements with its independent contractors in the spa. It said that the hotel is following its standard operating procedure in onboarding all spa employees.

Harmssen said counsel for the class members moved Friday to seek a temporary restraining order to block the hotel from requiring class members to sign a new arbitration agreement as a condition for W-2 employment.

Harmssen said U.S. District Judge Michael Seabright on Tuesday “ordered the parties to basically stipulate that that provision (in the arbitration agreement) relating to past claims will not affect any of the claims of the current class members and claimants. So even if the employees sign it, they can still participate in the class.”

Still, Harmssen said class members, many of whom experienced employment hardships during COVID-19 and following the deadly Aug. 8 wildfires on Maui, are entering into another critical period.

“We are aware of some class members who have not been extended any job offers at all,” she said. “I would say that is about 10% of the existing original workforce, including our original named plaintiff, Laurie Bolos.”

The Grand Wailea said all independent spa contractors are being offered the opportunity to apply for employment at the new spa. The current independent contractors who have applied for a position at the new spa will receive employment offers.

Harmssen said a new issue is that the job offers to class members come with a lower hourly and piece rate (a portion of the service price) than what they were receiving as independent contractors and is comparatively lower than what sister hotels pay.

“We aren’t accepting this for them. It will become part of the lawsuit,” she said.

Harmssen said the California portion of the case, which was more about alleged wage and hour issues than employee misclassification, was removed from the Hawaii case in November, and is moving forward quickly in California’s U.S. District Court system.

As of December, Bolos v. Grand Wailea, a Waldorf- Astoria Resort, Case 1:23- cv-00104, began moving through the U.S. District Court again. A stay in the case was granted Aug. 9 to allow the parties to engage in settlement discussions, but was lifted Jan. 16 by Seabright at the request of the parties after a Dec. 1 settlement conference was vacated.

Harmssen said since the initial filing of the class- action lawsuits, an additional 118 spa workers have signed on as named plaintiffs.

“The case has grown. It’s ginormous in Hawaii. We are in the process of seeking leave to amend the complaint to include all workers who have signed on as named plaintiffs to date,” she said.

On Feb. 16, she said, counsel will seek to add additional named members to the Hawaii class, which records show could be as large as 192 people. Harmssen said counsel also plans to add claims for retaliation and allegations of improper handling of sexual harassment and sexual assault committed against the workers. Moreover, she said counsel seeks to bring a Hawaii state law Racketeer Influenced and Corrupt Organizations, or RICO, action for alleged racketeering activities, including using mail and wire to support the continuance of unlawful employment practices.

Harmssen said the lawsuits seeks compensatory, treble and punitive damages, penalties and restitution/disgorgement of ill-gotten gains.