Myrtle Beach Resort Accused of Withholding Payments to Former Employees in Federal Lawsuit
Myrtle Beach – In a groundbreaking class action lawsuit filed last week in the U.S. District Court’s Florence division, Westgate Oceanfront Resort located in Myrtle Beach stands accused of withholding commission payments and other forms of compensation from hundreds of its former employees.
Complaint Allegations
The lawsuit filed against the resort alleges that the company has failed to pay out reserves from previously accumulated sales commissions, which were due to the employees upon their resignation or termination. Westgate’s timeshare division compensates its workers based on the number of sales made or the number of customers they convince to take a tour.
In an interesting twist to the case, as part of their contractual obligations during their tenure, employees were required to maintain reserve funds ranging from $3,000 to $4,000. This was intended as a form of insurance for Westgate, allowing it to recoup funds in case of cancelled or rescinded commissions.
Unfair Retention Allegations
The claimants contend that these reserve funds, unless charged back against by Westgate, were always meant to remain the property of the employees. They argue that once employees’ service with Westgate ended, they were entitled to any remaining funds in these reserve accounts.
The lawsuit, however, posits that Westgate would often allege that exiting employees owed more than the funds available in their reserve accounts, allowing the company to wrongfully retain the funds. This practice, it argues, violates the terms of the contracts between Westgate and its employees.
Lawsuit Details and Implications
Westgate Oceanfront Resort and its parent company, Central Florida Investments LLC, are being sued on multiple charges, including breach of contract, breach of good faith, unjust enrichment, conversion, and violations of the state’s Fair Wages Act. The claimants assert that there are over 100 similarly affected employees involved and the total financial impact of the case far exceeds $5 million, justifying the court’s jurisdiction over the matter.
The lead plaintiff in this case is Jane Helms, who worked in Westgate’s timeshare division for two years purely on a commission basis. After her departure from the company, Ms. Helms initially lodged the complaint that has now grown into this large-scale class action lawsuit against the Myrtle Beach resort.
The lawsuit comes as a grave assertion about the practices of a well-established player in the bustling tourism industry of Myrtle Beach and has the potential to set a precedent for how sales commission and other variable payment structures are handled by companies in the state and across the country.
If the claimants prevail in their case, this could have broader implications for businesses using similar compensation models. Companies might need to revisit their contractual obligations and policies surrounding sales commissions, especially in case of employee transitions.
HERE News Network will continue to closely follow this groundbreaking class action lawsuit.
With reporting by HERE News.
