Pennsylvania Unjust Enrichment Requires a Benefit Conferred by the Plaintiff (Not a Third Party): Limits on Employee Claims to “Gratuity Fees”

I. Introduction

In Chelsea Henkel v. Highgate Hotels, LP (3d Cir. Jan. 20, 2026) (not precedential), resort employees brought a putative class action against Highgate Hotels and Cove Haven (the “resorts”), alleging that guests were charged “gratuity fees” for all-inclusive stays but that the resorts failed to share those proceeds with servers and housekeepers. The operative complaint included federal and state wage theories and several common-law claims; on appeal, the dispositive issues centered on two common-law theories:

  • Intended third-party beneficiary contract: whether employees could sue on guest–resort contracts as intended beneficiaries of any promise to distribute “gratuity fees”; and
  • Unjust enrichment: whether employees could recover “gratuity fee” proceeds as an inequitable benefit retained by the resorts.

The District Court granted summary judgment to the resorts on the intended third-party beneficiary theory, allowed unjust enrichment to proceed to trial (with certified server and housekeeper classes), but later granted the resorts’ renewed motion for judgment as a matter of law after a jury verdict for the employees. The parties cross-appealed. The Third Circuit affirmed across the board and dismissed the resorts’ conditional cross-appeal as moot.

II. Summary of the Opinion

The Third Circuit affirmed two key rulings:

  1. Intended third-party beneficiary (summary judgment affirmed): Employees produced no evidence of the guests’ intent regarding any distribution of the “gratuity fee,” and they did not identify the specific guest contracts at issue. Without proof that recognizing employee beneficiary rights would “effectuate the intention of the parties,” the claim failed.
  2. Unjust enrichment (judgment as a matter of law affirmed): Under Pennsylvania law, unjust enrichment requires that the benefit be “conferred on defendant by plaintiff.” Because resort guests—rather than employees—paid the “gratuity fee,” the employees could not satisfy the first element. The court also approved the District Court’s authority to revisit its earlier summary-judgment reasoning notwithstanding law-of-the-case concerns, and found no prejudice requiring reversal.

III. Analysis

A. Precedents Cited (and How They Shaped the Outcome)

1. Third-Party Beneficiary Doctrine

  • Guy v. Liederbach, 459 A.2d 744 (Pa. 1983)
    The court treated Guy as controlling on intended third-party beneficiary status: recognition of the beneficiary’s right must be “appropriate to effectuate the intention of the parties.” Applying that requirement, the panel held that employee testimony about workplace understandings did not establish guest intent—especially where the record suggested many guests did not even perceive the fee during booking. Absent evidence of the contracting parties’ intent (guest and resort), employees could not be elevated to intended beneficiaries.

2. Summary Judgment and Appellate Review Standards

  • Road-Con, Inc. v. City of Philadelphia, 120 F.4th 346 (3d Cir. 2024)
    Cited for de novo review and the Rule 56 standard. It provided the procedural frame for affirming summary judgment on the third-party beneficiary claim: the employees failed to raise a genuine dispute of material fact as to the contract parties’ intent and even which contracts governed.

3. Unjust Enrichment Elements Under Pennsylvania Law

  • Shafer Elec. & Constr. v. Mantia, 96 A.3d 989 (Pa. 2014)
    This was the fulcrum of the unjust enrichment holding. The panel read Shafer as “unambiguously” requiring that the benefit be “conferred on defendant by plaintiff.” Because the alleged benefit (the “gratuity fee”) was paid by guests, the employees could not satisfy element one—regardless of any asserted inequity.
  • Mark Hershey Farms, Inc. v. Robinson, 171 A.3d 810 (Pa. Super. Ct. 2017)
    Cited consistently with Shafer for the three-element formulation. It supported the panel’s view that Pennsylvania courts state the elements uniformly and that the “conferred by plaintiff” requirement is not optional or merely semantic.

4. Judgment as a Matter of Law (JMOL) Standard

  • McKenna v. City of Philadelphia, 649 F.3d 171 (3d Cir. 2011)
    Used to frame de novo review of JMOL while viewing evidence in the light most favorable to the verdict winner. Even under that plaintiff-favorable lens, the absence of proof that employees conferred the “gratuity fee” benefit compelled judgment for the resorts.

5. Law-of-the-Case and Reconsideration of Prior Rulings

  • Roberts v. Ferman, 826 F.3d 117 (3d Cir. 2016)
    Cited for the proposition that a court may revisit an earlier denial of summary judgment where, among other reasons, the earlier decision was clearly erroneous and would create manifest injustice.
  • Schultz v. Onan Corp., 737 F.2d 339 (3d Cir. 1984)
    Quoted for the principle that law-of-the-case is not a barrier to correcting judicial error, reinforcing the District Court’s ability to correct its earlier, imprecise articulation of unjust enrichment.
  • Thompson v. U.S. Airways, Inc., 717 F. Supp. 2d 468 (E.D. Pa. 2010)
    Functioned as the “contrast” authority. The District Court initially relied on Thompson’s broader phrasing (“benefits have been conferred on one party by another”), but later rejected it as unsupported by Pennsylvania authority. The Third Circuit endorsed that correction, emphasizing that Pennsylvania cases “uniformly” require the plaintiff to be the conferrer.
  • Williams v. Runyon, 130 F.3d 568 (3d Cir. 1997)
    Supported the requirement that a court explain its reasons for reconsideration on the record—something the District Court did when it clarified the correct unjust enrichment standard.
  • In re Energy Future Holdings Corp., 904 F.3d 298 (3d Cir. 2018)
    Provided the cautionary principle: when reconsidering, courts should take steps to prevent prejudice from reliance on the prior ruling. The panel found no reversible prejudice here because the earlier summary-judgment reasoning affected only whether there should have been a trial, not how the claim was tried.

B. Legal Reasoning

1. Intended Third-Party Beneficiary: Intent Must Be Shown, Not Assumed

The court’s reasoning is notably concrete: it did not accept the framing that “gratuity fee” labeling, or employee expectations about tipping norms, sufficed to show the contracting parties’ intent. Under Guy v. Liederbach, the inquiry is whether recognizing third-party rights effectuates the intent of those who made the contract (here, guests and resorts). The panel found two evidentiary failures decisive:

  • No evidence of guest intent about how any fee would be distributed; and
  • No identification of the “specific contracts” governing the alleged promise (the record contained “numerous documents” but “none written contracts” governing the stay).

The opinion therefore reinforces an evidentiary discipline: third-party beneficiary claims rise or fall on proof of the contracting parties’ intent, not on the would-be beneficiary’s expectations or industry custom absent contractual grounding.

2. Unjust Enrichment: The Plaintiff Must Be the Source of the Benefit

The unjust enrichment holding is the decision’s sharpest doctrinal move. The panel treated Pennsylvania’s first element as a gating requirement: the plaintiff must have conferred the benefit on the defendant. Because the “gratuity fee” proceeds were paid by guests (a third party), employees could not satisfy element one as a matter of law. This analysis forecloses a common rhetorical move in service-fee disputes—arguing that employees “earned” the fee through labor and therefore “conferred” it—unless the applicable law recognizes that kind of indirect conferral (the panel read Pennsylvania law as not doing so here).

3. Reconsideration After Trial: Correcting the Legal Standard Was Permissible

The panel also endorsed the District Court’s post-trial correction of its earlier summary-judgment rationale. It emphasized that law-of-the-case yields where a prior ruling was clearly erroneous, and that the court adequately explained its correction on the record. It further concluded that any reliance interest did not warrant reversal because the earlier ruling did not shape trial conduct in a way that created cognizable prejudice; it merely affected whether the case should have gone to the jury.

C. Impact

1. Service-Fee / “Gratuity Fee” Litigation in Pennsylvania

Although designated “NOT PRECEDENTIAL,” the opinion is likely to be cited as persuasive authority in Pennsylvania-focused federal litigation involving:

  • “gratuity fees,” service charges, resort fees, or “automatic gratuities” paid by customers; and
  • employee attempts to recharacterize customer payments as employer-held benefits recoverable in equity.

The practical message is that unjust enrichment may be a poor vehicle for employees seeking redistribution of guest-paid charges, unless plaintiffs can plead and prove that they conferred the benefit on the employer (or that Pennsylvania law recognizes an exception not credited here).

2. Contract Drafting and Disclosure Practices

The third-party beneficiary analysis underscores the litigation significance of the underlying guest contract and disclosures. Employers operating “all-inclusive” models may reduce exposure by ensuring guest-facing terms clearly define whether any fee is a gratuity, a service charge retained by the resort, or a discretionary tip—and by retaining the documents that form the contract. Conversely, employees seeking third-party beneficiary status will need the actual contracting instruments (booking terms, confirmations, resort policies incorporated by reference) and evidence of shared intent.

3. Class Actions and Trial Strategy

The decision illustrates a structural risk in class cases that proceed to verdict on a legally fragile theory: even after certification and trial, a claim can fail on a clean element-of-the-cause-of-action defect via JMOL. Plaintiffs’ counsel in similar matters may prioritize statutory wage/tip frameworks or direct contractual promises to employees, rather than rely on equitable theories keyed to customer payments.

IV. Complex Concepts Simplified

  • Intended third-party beneficiary: A non-party can sue on a contract only if the contracting parties meant to give that non-party enforceable rights. It is not enough that the non-party would benefit incidentally.
  • Unjust enrichment: An equitable claim requiring (1) a benefit conferred by the plaintiff on the defendant, (2) the defendant’s appreciation of the benefit, and (3) circumstances making it unfair to keep the benefit without paying for it. This case turns on element (1).
  • Summary judgment: A pretrial ruling that ends a claim when there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law.
  • Judgment as a matter of law (JMOL): A post-evidence (often post-verdict) ruling that the law requires a particular outcome because a reasonable jury would not have a legally sufficient basis to find for the non-moving party on an essential element.
  • Law-of-the-case doctrine: A prudential practice discouraging relitigation of earlier rulings in the same case, but it does not prevent courts from correcting clear errors or applying new controlling law.

V. Conclusion

Chelsea Henkel v. Highgate Hotels, LP reinforces two disciplined, element-focused constraints in Pennsylvania-adjacent employment fee disputes: (1) intended third-party beneficiary status requires evidence of the contracting parties’ intent—here, the guests’ intent regarding fee distribution—and (2) unjust enrichment requires that the plaintiff, not a third party, conferred the alleged benefit on the defendant. The opinion also confirms that district courts may correct earlier legal misstatements despite law-of-the-case concerns, particularly where the correction goes to whether the claim should have been tried at all. Even as non-precedential, its reasoning is poised to shape how “gratuity fee” cases are pleaded, proven, and defended in future litigation.