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Danny Meyer, David Chang, Others Sued Over No-Tipping ‘Conspiracy’

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A lawsuit claims restaurant owners are profiting from zero-gratuity policies at the expense of servers and diners

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The no-tipping movement has widely been praised as a way to improve the lives of restaurant workers, but a new lawsuit claims restaurant owners are really the ones profiting from zero-gratuity policies.

A proposed class-action lawsuit filed in California federal court names several Bay Area and New York restaurants — including those owned by no-tipping pioneer Danny Meyer’s Union Square Hospitality Group — as defendants, and claims that no-tipping policies are “part of a conspiracy to charge [diners] more for their food,” Law360 reports.

The suit argues that restaurant owners, including Meyer and Momofuku boss David Chang, colluded to establish no-tipping policies in “secret meetings,” and that the real aim of such policies was to line their own pockets by raising menu prices.

According to the suit:

The ongoing conspiracy unlawfully transfers millions of dollars from customers and servers to restaurant owners in violation of federal and state antitrust laws. Participating restaurants and a compliant media have portrayed the no-tipping/higher prices movement as intended to promote social justice and equality, while the real aim and effect is greater profit at the expense of workers and consumers.

Other defendants named in the suit include Will Guidara and Daniel Humm of Eleven Madison Park, Tom Colicchio and his Crafted Hospitality restaurant group, and NYC restaurateurs Andrew Tarlow and Gabriel Stulman.

Momofuku, EMP, and Stulman all had no comment, while a USHG spokesperson provided the following statement via email:

We undertook the challenging and lonely journey of introducing Hospitality Included to create clear and transparent growth paths for our people, while beginning to address the decades-long growth of inequality among restaurant professionals. We believe hospitality can and should be a viable career with competitive wages, and we are more committed than ever to Hospitality Included getting us there.

Asked to comment on the validity of the lawsuit, Michael Whiteman, president of NYC-based restaurant consultancy group Baum & Whiteman, said, “There is no law that requires front-of-house personnel to be tipped nor one that says they can’t be made to work on salary. And there are so few restaurants that have gone no-tipping that I doubt one could make the case for collusion, which one certainly could do with airline pricing structures or the new hotel cancellation policies.”

“I’m all for restaurants scrapping tipping and building wages into their pricing,” Whiteman continued. “That’s up-front and honest. And unlike the surchargers, these restaurants now legally can distribute some of the incremental revenue to their back-of-house staff, all of whom are vastly underpaid.”

Check out the full text of the lawsuit, below:

No Tipping Lawsuit by Eater on Scribd

Restaurants Sued Over No-Tipping Policy 'Conspiracy' [Law360]
Danny Meyer Says Tipping Is a Hoax That Fosters Inequality [E]