Wyndham Escapes Trafficking, RICO, and Discrimination Claims in Days Inn Labor Dispute

The case, *Timko v. NSPA Lounge LLC*, involves plaintiffs Terri Timko, Anthony Robinson, and Stephanie Darnell suing NSPA Lounge LLC d/b/a Days Inn, along with other franchise entities and individuals, as well as Wyndham Hotels and Resorts, Inc.

Judge Ranjan dismissed Counts III, IV, and VII against Wyndham regarding Plaintiff Stephanie Darnell. These counts alleged violations of the Trafficking Victims Protection Reauthorization Act (TVPRA) and Pennsylvania's statutory analog.

Darnell accused Wyndham of facilitating forced labor by allowing the franchisee to engage in "document servitude." However, the court held that the relevant federal and state statutes criminalize the destruction of travel documents, such as passports or government IDs, to restrict a person's ability to travel.

The amended complaint did not allege the destruction of such documents. Instead, it alleged that the employer failed to provide payment documents like W-2 forms and pay stubs. The court found no legal support for the argument that withholding simple wage records constitutes criminal document servitude.

Without a predicate violation of the document-servitude laws, the court held that Darnell could not hold Wyndham liable under the TVPRA or Pennsylvania trafficking statute. The court also rejected an argument that withholding wage records constituted retaining an employee's personal property as a means of coercion.

The court also dismissed Count IX, a RICO conspiracy claim, finding no plausible allegation that Wyndham conspired to violate RICO. To state such a claim, a plaintiff must allege knowledge of the enterprise's activities and an agreement to violate the law.

The amended complaint only alleged that Wyndham "should have known" of the franchisees' corrupt activities. The court distinguished this from the actual knowledge and agreement required for a RICO conspiracy claim.

Count X, a Section 1981 race discrimination claim brought by Plaintiff Anthony Robinson, was dismissed because Wyndham was not Robinson's employer. The court found no plausible basis to suggest Wyndham operated as a joint employer.

Finally, the court dismissed Counts XXVII, XXVIII, and XXIX, which were unjust enrichment claims against Wyndham. The plaintiffs argued Wyndham benefited from the franchisees' non-payment of wages through royalties and franchise payments.

The court held that this benefit was remote or incidental at best and could not state a claim for unjust enrichment under Pennsylvania law. The court noted that the plaintiffs had already submitted an expansive 143-page amended complaint and that further amendment would be futile.