Danny Meyer Faces Lawsuit Over No-Tipping Policy

GRAMERCY, NY — A diner is suing Danny Meyer and other New York City restauranteurs who have implemented no-tipping policies in their restaurants, alleging that he has been overcharged because of the policy.

Meyer, the prolific restaurant owner behind New York City staples like the Union Square Cafe as well as the founder of Shake Shack, announced in 2015 that he would phase-out tipping from all 14 of his restaurants within the Union Square Hospitality Group. Meyer argued that the switch, which would increase the base price of menu items, would allow for servers and other restaurant employees to be paid more equitably. Since them, other restaurants have followed suit.

The policy at Union Square restaurants "is designed to compensate the entire team – in both the kitchen and the dining room – more equitably, competitively, and professionally, and provide clear paths for professional advancement," according to the restaurant group.

Last week, Timothy Brown filed suit against Meyer and other restaurants and restaurant owners. The filing was first reported by Law360. The class action suit, filed in New York and California, accuses Meyer and other restaurant owners who have switched to no-tipping prices of joining a “price-fixing conspiracy.” (For more information on this and other neighborhood stories, subscribe to Patch to receive daily newsletters and breaking news alerts.)

Brown says in the suit that the restaurant owners have “engaged in a sophisticated unlawful conspiracy to put that money into their own pockets” and that the effort was “spearheaded” by Meyer and the Union Square Hospitality Group.

“The ongoing conspiracy unlawfully transfers millions of dollars from customers and servers to restaurant owners," Brown says in the suit.

Along with Meyer, restauranteurs including David Chang of Momofuku and Tom Colicchio are named in the suit.

The Union Square Hospitality Group did not immediately respond to a request for comment from Patch. In a statement to Eater, a spokesperson said: “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.”

Image credit: Spencer Platt / Staff / Getty Images News. Image caption: Founder and Chairman of Shake Shack, Danny Meyer, visits the floor of the New York Stock Exchange (NYSE) on January 30, 2015 in New York City.