By Gil Fried, University of West Florida, Editor-in-Chief Sports Facilities and the Law
The need to properly vet employees, check their backgrounds, follow regulations (policies and procedures), and cooperate with authorities came to painful reality for Hyatt when a Missouri appellate court recently upheld a $177 million verdict against Hyatt Corp. The allegations involved a security guard employed by the hotel who sexually assaulted a female guest in her room.
The security guard, identified as D.W., had a documented history of arrests related to sexual misconduct, which was not uncovered during Hyatt’s hiring process. The hotel guest had not responded to a co-worker’s call and knock on her door, so security was called. According to the hotel’s policies, whenever a welfare check was being conducted, two security guards were to respond. D.W. entered the room while a colleague waited in the hallway. Several hours later D.W. returned with his master key and entered the room alone and was caught by the Plaintiff while he was sexually assaulting her. Later that morning the plaintiff asked for a record of entry into her room to share with the police and was told by the hotel’s security director she would need a subpoena.
Even though Hyatt policy required them to help the victim of a crime and to report alleged crimes to the police, security did not do those steps. Hyatt confirmed that it had video footage of a person resembling D.W. entering the room and had the key log but refused to provide that information (without a subpoena) even when the police requested that information. The security department further did not tell the police that D.W. had called and said he was heading out of town.
When D.W. was hired he had a brief interview, and they examined his prior seven year criminal history rather than the policy which required an entire criminal history check. During the hiring process D.W.’s references were not checked, nor did they check his employment history. D.W. had prior sexual abuse investigations and lied about his employment history on his job application. A jury heard the facts and awarded $28 million in compensatory damages and $149 million in punitive damages.
Hyatt appealed the verdict, contesting the punitive damages awarded by the jury. The Missouri Court of Appeals rejected Hyatt’s claims, emphasizing that substantial evidence demonstrated the company’s “conscious disregard” for guest safety.
The appellate panel noted that Hyatt hindered police investigations and failed to assist the victim effectively. As highlighted by the court, Hyatt’s actions included denying the victim access to electronic key records and obstructing law enforcement’s inquiries. The court found that Hyatt’s behavior during the investigation and trial illustrated a corporate priority of self-preservation over guest welfare.
“In our judgment, Hyatt’s conduct in this regard epitomizes a conscious disregard for the rights and interests of its own hotel guest who suffered a sexual assault in her hotel room at the hands of Hyatt’s own security guard. Instead of following its policies and putting Dugan’s (the Plaintiff) interests first, the jury appears to have concluded that Hyatt, from the top of its corporate governance, prioritized its own interests,” the court said. “This evidence supports the conclusion that the trial court properly submitted punitive damages to the jury.”
Evidence at trial revealed that Hyatt violated its policy to assist crime victims and delayed police access to critical information, such as surveillance footage and key records. When Hyatt learned D.W. was leaving town, the company failed to notify authorities. The appellate court found these actions indicative of corporate misconduct, which undermined both the victim’s case and police efforts.
The verdict sends a strong message to the hospitality and sport industry regarding the repercussions of failing to prioritize guest safety. When something bad happens, there is often a tendency for self-preservation. However, policies and procedures should never be compromised as that is something an expert, court, and jury will always examine. Furthermore, venue related employers need to make sure they cooperate as much as possible with authorities to protect others, but also it is the ethically right thing to do.
This decision, along with a recent punitive damages award in 2024 against a Los Angeles Dodgers’ security officer, shows that juries are now going to punish those who fail in their mission to protect others. I can foresee more of these cases in the future and sport venues and security providers need to critically screen their front-line personnel and train all managers to carefully follow adopted policies.
Here is an article about the decision: https://www.law.com/2024/12/05/state-appellate-court-upholds-149m-punitive-damages-award-against-hyatt-/?slreturn=20241211175846
Here is the appellate court’s decision: https://assets.alm.com/47/5f/b9c54f1e4d49932df9910e9bdc7b/opinion-ed111485.pdf
