The Cornelia Day Resort is scheduled for formal rebranding as Spa Chakra today, but a new labor lawsuit could keep the old name, and former owners Richard Aidekman and Ellen Sackoff, on the record for some time.
This story first appeared in the May 1, 2009 issue of WWD. Subscribe Today.
Attorneys for 28 of the retreat’s current and former employees filed a suit in U.S. District Court in Manhattan on April 27 accusing the husband-and-wife ownership team of violating several federal labor laws, including flouting minimum-wage standards and stealing from employees’ benefit plans.
Aidekman and Sackoff opened the posh Fifth Avenue retreat with namesake skin care guru Cornelia Zicu in 2004. Zicu left the operation in 2007, but Aidekman and Sackoff stayed on through February of this year, when they sold the site to Mike Canizales’ Spa Chakra.
Canizales, who is also named as a defendant in the suit, plans to rename the location today and upgrade many of its treatments and back-of-the-house operations.
The suit alleges that former management’s actions, even if not criminal, were improper over the course of Cornelia Day Resort’s five-year existence.
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Among other accusations, the lawsuit charges that Cornelia Day Resort management set aside a portion of eight employees’ earnings for a phantom 401(k) plan and instead used the money to cover business and operating costs. When employees attempted to withdraw their investments, they were denied access, the suit says.
An additional five employees paid into an Aetna Health Insurance plan provided by Cornelia Day Resort, according to the complaint, a plan the plaintiffs allege that Aidekman and Sackoff let lapse sometime in the fall of 2008 because they failed to forward employees’ paycheck deductions to the insurer as well as their own employer’s premiums. The suit contends that several employees had to pay for “substantial health-related expenses” out of pocket before coverage was reinstated.
The complaint also alleges that Spa Chakra tried to convince some staff to seek unemployment insurance for periods they worked but were not paid for just prior to the departure of Aidekman and Sackoff on Feb. 5. The employees are seeking punitive, actual and other unspecified damages. Their attorneys have asked that the case be designated as a class action. If a judge grants the request, employees of the company from Jan. 1, 2004, through the present could be eligible to join as plaintiffs.
Aidekman and Sackoff could not be reached for comment.
Meredith Quarnstrom, chief operating officer of Spa Chakra, said, “While Spa Chakra does not comment on ongoing litigation, the company and its principals believe that it was erroneously named in a recent lawsuit. The company is thrilled with its acquisition of Cornelia and looks forward to a successful future with its talented team.”