Morgan Lewis Scolded for Possible Conflict in Hotel Wage Case

Photographer: Kimberly White/Bloomberg News

• Class certified in case of off-the-clock work

• Lawyers scolded for representing hotel, employees with possible conflict of interest


Workers at a Sheraton hotel in San Francisco won class action status for their claim that the employer created a culture that encouraged staff to work through breaks without pay.

The class includes approximately 350 employees, according to the order by Judge William Alsup of the U.S. District Court for the Northern District of California. The company’s focus on customer service pushed staff to work off the clock to keep up with job demands, Dina Rae Richardson, who cleaned hotel rooms as a room attendant, said.

The judge’s order criticizes the way the hotel company’s lawyers obtained statements from three former employees that were used to argue against certifying the class. Lawyers from Morgan, Lewis & Bockius LLP had the former employees sign declarations the lawyers drafted based on interviews they conducted with them. The Morgan Lewis lawyers also represented the former employees in depositions the lawyers litigating the case against the hotel operator conducted later.

Alsup ordered the hotel’s lawyers to explain why their firm shouldn’t be disqualified from the case for violating conflict-of-interest rules against representing parties with adverse interests. “I’m going to order an Order to Show Cause why Morgan Lewis and Bockius should not be disqualified from this case both as to Defendant and as to Plaintiffs, because you wound up on both sides of the case,” he told them during an evidentiary hearing.

The employees’ declarations showed they didn’t believe the company committed wrongdoing, meaning the workers who signed them lacked claims against the company, the Morgan Lewis lawyers said.

“Once the former employees signed their declarations, neither Interstate nor Morgan Lewis believed there was a conflict between Interstate and the three former employees or that they remained putative class members,” Jason Mills, a Morgan Lewis lawyer, wrote in response to the show cause order. “Interstate should not be punished by the disqualification of its chosen counsel because of that counsel’s very limited representation of the three former Interstate employees at their depositions,” he wrote.

“In hindsight, the better practice would have been to obtain, in an abundance of caution, advance written waivers from Interstate and the three former employees, or to have offered separate counsel to the three former employees for representation at their depositions, or to have simply defended the depositions without representing the three former employees,” Mills wrote, with an apology for allowing the issue to arise. He pledged that Morgan Lewis wouldn’t repeat the conduct in the Northern District of California or any other court.

That explanation didn’t persuade Alsup. Morgan Lewis “plainly violated” California attorney professional conduct rules, he concluded. Although the lawyers disclosed that they worked for Interstate Hotels & Resorts Inc. and Interstate Management Company LLC, which operated the Sheraton Fisherman’s Wharf, the employees, whose first language was Cantonese or Vietnamese, required interpreters and may not have understood their rights and what they might be agreeing to or giving up by participating, Alsup said.

A Morgan Lewis representative wasn’t immediately available to respond to Bloomberg Law’s request for comment on this issue March 13.

Hotel’s Lawyers Could Be Disqualified 

Morgan Lewis’ violation could be enough to disqualify it from continuing to represent Interstate, Alsup said. He allowed it to continue representing the company but barred Interstate from using the employees’ declarations and depositions. He barred Morgan Lewis from cross-examining the employees if they’re called to testify by Richardson’s lawyers.

“Some other firm without taint will have to do so,” Alsup said. “Possibly, the jury will be informed as to the facts underlying defense counsel’s representation of hotel employees.”

Attorneys on both sides and a representative for Interstate didn’t immediately respond to Bloomberg Law’s request for comment March 13.

Matthew Matern, Launa Adolph, and Kayvon Sabourian with Matern Law Group PC in Manhattan Beach, Calif., represent the class.

Morgan Lewis attorneys Jason Mills, Hien Nguyen, and Rebecca Licht Jensen in Los Angeles and Robin Lagorio in San Francisco represent Interstate.

The case is Richardson v. Interstate Hotels & Resorts, Inc. , 2018 BL 84007, N.D. Cal., No. 3:16-cv-06772, class certified 3/12/18.