Danny Meyer Plans To Pay $700K To Settle Tipping Lawsuit

GRAMERCY, NY — Danny Meyer plans to shell out nearly $700,000 to settle a lawsuit from two former employees who said the famous restaurateur stiffed them out of tips.

Meyer, who launched Shake Shack and operates multiple restaurants in New York City, later controversially announced that all of his properties would ban tipping of employees and instead increase menu prices.

But before that decision, made in October 2015, two bussers claim he incorporated a system of sharing gratuities that left them out of payments.

The class-action suit, filed in 2015, accused Meyer of "nickel and diming employees out of wages and tips they are lawfully entitled to receive."

The Tavern employees said in the complaint that tips were distributed to managers and other tip-ineligible employees, reducing the overall wages paid to service employees like them.

They said that because of this tip policy, they and other service employees were not paid the minimum wage.

The suit also claimed that the Michelin-starred restaurant, at 42 E. 20th Street, kept all or part of the service charge on bills from private events instead of distributing it to servers.

Meyer's Union Square Hospitality Group will pay out $695,000 to the Tavern's service employees who opted into the suit under the proposed settlement.

The group admits no wrongdoing as part of the settlement, which is scheduled for a final hearing in April. A spokeswoman for the group did not immediately respond to an email from Patch seeking comment.

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