Schulte Hospitality Group Lawsuit: Johnson, Rowe, Thrash Cases

Schulte Hospitality Group, the Louisville-based hotel management company that operates more than 200 properties, has been named in a range of lawsuits over the past several years. The claims include racial discrimination by guests, employment retaliation, allegations that management at a New York hotel ignored prostitution and human trafficking, a breach-of-contract fight with a former Arkansas partner, and several labor and personal injury suits. Outcomes have ranged from dismissals in Schulte’s favor to active litigation still working through the courts.

Johnson Racial Discrimination Case at Sheraton Woodbury

The most fully litigated matter is Johnson v. Schulte Hospitality Group, brought by Larry Johnson, a Black Marriott Bonvoy “silver elite” member, over his June 4, 2020 stay at the Sheraton St. Paul Woodbury Hotel in Minnesota.¹

Johnson said he was locked out of the main entrance, greeted inhospitably, required to prove his rewards membership, given a room with dirty bedding he had to change himself, and refused a room switch. After he complained to the assistant manager, she called the police about seven minutes later, and Johnson was escorted off the property. The hotel refunded the stay in full.²

He sued under the Minnesota Human Rights Act and 42 U.S.C. § 1981, alleging racial discrimination and unlawful retaliation. Schulte responded that the June 2020 conditions explained the treatment: pandemic-era reduced staffing, locked entrances with call-the-desk signage, suspended daily housekeeping, and policies against room changes. The assistant manager said she called police because Johnson’s behavior made her feel harassed.²

The district court granted summary judgment for Schulte. On May 2, 2023, the U.S. Court of Appeals for the Eighth Circuit affirmed in a divided ruling.³ The majority found the hotel had offered legitimate, nondiscriminatory reasons tied to pandemic conditions and that Johnson had not shown those reasons were pretextual. On retaliation, the court held that Johnson’s behavior after his complaint amounted to “intervening unprotected conduct” that broke the causal link between the complaint and the police call.²

Judge Jane Kelly dissented on retaliation. She wrote that the seven-minute gap between complaint and police call was enough to suggest a causal connection, that the assistant manager had previously called police only on guests who broke the law or damaged property, and that whether Johnson’s behavior was actually aggressive was a factual question for a jury rather than a judge at summary judgment.¹

Rowe Employment Retaliation Case

Jacqueline L. Rowe, a former Guest Services Representative, sued Schulte in the U.S. District Court for the Western District of Oklahoma, alleging racial discrimination and retaliation under Title VII. She claimed a white coworker used a racial slur on July 16, 2021; that she was written up for a mistake actually made by a white employee; that she was removed from weekend scheduling after filing a grievance and pulled from Sunday shifts after Schulte received an EEOC charge; and that she was fired on August 31, 2022, the same day as an EEOC mediation session.⁴

In July 2023, Judge Scott L. Palk dismissed most claims with prejudice. He found that a single coworker slur did not amount to a hostile work environment, that the write-up was not an adverse action because Rowe kept her job for another year, and that two of the three retaliation theories failed. The termination-based retaliation claim survived, because being fired on the day of EEOC mediation was enough to plausibly suggest causation.⁴

Rowe lost a fight over her right to a jury and the case was set for a bench trial. In August and September 2024, the court denied her motions to reconsider that format.⁵ The case was terminated on October 18, 2024. Rowe moved to reopen the next month; Judge Palk granted only a short extension and warned that if closing papers were not filed by December 18, 2024, the case would be dismissed with prejudice.⁶

Elmsford Hampton Inn Trafficking Allegations

In June 2024, thirteen current and former employees of the Hampton by Hilton in Elmsford, New York, sued Schulte Hospitality Group, the Hampton Inn, Hilton Worldwide, and individual hotel managers in New York State Supreme Court. The complaint was brought under the New York State Human Rights Law and the federal Trafficking Victims Protection Act.⁷

The employees allege management “created, condoned, and tolerated” a work environment saturated with prostitution, drug use, violence, and human trafficking. According to the complaint, pimps and customers solicited employees for sex, a prostitute was chased by a man with a knife, and a male employee was attacked by a drug-affected guest. The plaintiffs say management facilitated the activity by taking rooms offline for prostitution, offering discounted rates, accepting cash payments, and directing staff to transport people involved. The complaint quotes managers as telling staff, “What happens in the hotel stays in the hotel,” and, “if it weren’t for the prostitutes, none of you guys would have a job right now.”⁷

The complaint says that in November 2022, an employee submitted a two-page whistleblower report through Schulte Hospitality’s confidential reporting system. The plaintiffs allege the report was initially ignored and that management acted only after their legal counsel contacted a regional manager. The whistleblower said she feared for her safety after a dismissed manager, reportedly claiming to own a gun, prompted warnings that she should “watch out.”⁷ The plaintiffs are represented by Murtagh, Cossu, Venditti & Castro-Blanco, LLP. No public response from Schulte Hospitality or Hilton has been documented in available reporting, and the case’s current status is not reflected in the research.

Thrash Family Breach-of-Contract Fight

In 2019, Ike Thrash and his sons filed a breach-of-contract suit in Washington County Circuit Court in Arkansas against Darryl Schulte Jr. The Thrashes said they sold their 60% interest in the Chancellor Hotel in Fayetteville to Schulte in January 2018 under an agreement that he would not sell the property to A.J. Capital Partners in “the immediate future.” Schulte then sold the hotel to A.J. Capital less than a year later, allegedly making $2.5 million more than he had paid. The Thrashes sought $1.5 million as their claimed share of the profit.⁸

Six hotel ownership groups, including one that owned a DoubleTree by Hilton in Fort Smith, also accused Schulte Hospitality Group of mismanaging their properties, using transactions to mask declining performance, and improperly moving employees to Graduate Hotels in what the suit called “theft of employees.” Claims included breach of contract, bad faith, and breach of good faith and fair dealing, with compensatory and punitive damages sought.⁸

Schulte denied the allegations, called them “unfounded and untrue,” and filed his own suit against The Thrash Group in Louisville, Kentucky, alleging the Thrashes terminated their management agreements without the required 60-day notice.⁹ No final outcome for either suit is reflected in available reporting.

Other Pending and Resolved Matters

Several additional lawsuits involving Schulte Hospitality Group appear in federal court records.

UMES National Alumni Association v. Schulte Hospitality Group (D. Md., 2023): The University of Maryland Eastern Shore National Alumni Association filed a civil rights accommodations claim under 42 U.S.C. § 1981 in August 2023. The specific hotel incident behind the suit is not detailed in available filings. As of September 2025 the case was still active, with a magistrate judge ruling on discovery disputes.¹⁰
Martinez v. Schulte Hospitality Group (E.D. Cal., 2024): A labor case filed by Nora Berenice Martinez, removed from Solano County Superior Court in October 2024. The specific violations are not detailed in public docket records, but the case is classified as “Other Labor Litigation.” A jury trial was scheduled for May 2026, with a later docket entry indicating a rescheduled trial in August 2027.¹¹
Ramirez v. Schulte Hospitality Group (N.D. Ga., 2024): A Fair Labor Standards Act claim concerning minimum wage or overtime compensation, filed by Khrissmely Ramirez. The case was closed on July 29, 2024, after the court approved a joint stipulation of dismissal without prejudice.¹²
Vasquez v. Schulte Hospitality Group (D.P.R., 2025): A personal injury suit filed in the District of Puerto Rico in June 2025. Schulte Hospitality Group, Inc. was dismissed as a defendant without prejudice in August 2025, though the case continues against Schulte PR LLC and Travelers Property Casualty Company of America, with a trial scheduled for September 2027.¹³

1
Minnesota Lawyer. 8th Circuit Rejects Discrimination Suit Against Owner of Woodbury Hotel
2
Findlaw. Johnson v. Schulte Hospitality Group, Inc.
3
Leagle. Johnson v. Schulte Hospitality Group, Inc., 66 F.4th 1110
4
Midpage. Rowe v. Schulte Hospitality Group LLC
5
Midpage. Rowe v. Schulte Hospitality Group LLC – Procedural Order
6
PACER Monitor. Rowe v. Schulte Hospitality Group LLC
7
Yonkers Times. Hampton Inn Elmsford Employees Allege Management Turned Blind Eye to Prostitution, Drug Use, and Human Trafficking in Lawsuit
8
Arkansas Business. Lawsuit Alleges Chancellors Quick Sale Didnt Check Out
9
Arkansas Business. Litigants in Chancellor Hotel Lawsuit Fighting on Two Fronts
10
GovInfo. UMES National Alumni Association, Inc. v. Schulte Hospitality Group, Inc.
11
GovInfo. Martinez v. Schulte Hospitality Group, Inc.
12
PACER Monitor. Ramirez v. Schulte Hospitality Group, Inc.
13
PACER Monitor. Vasquez v. Schulte Hospitality Group, Inc. et al