Lawsuit Claims Danny Meyer’s No-Tipping Movement Is a Plot to Overcharge Customers

More hassle for the no-tipping club. Photo: Tetra Images/Getty Images

Several of New York and San Francisco’s top restaurateurs have been hit with a class-action lawsuit that argues that their no-tipping policies are actually part of a “conspiracy” to charge higher prices for food. Filed in a California court, the plaintiffs’ complaint says Danny Meyer’s Union Square Hospitality Group, David Chang’s Momofuku restaurants, and other high-profile spots adopted an anti-competitive practice that amounts to price-fixing and collusion. Besides Meyer and Chang, the complaint also names Tom Colicchio, Eleven Madison Park’s Daniel Humm and Will Guidara, Brooklyn restaurant mogul Andrew Tarlow, and Gabriel Stulman, who eliminated tipping at Fedora at the beginning of 2016, only to reinstate it four months later. (Chang and others have made similar moves.)

The plaintiffs include several pages of quotes by Danny Meyer — the no-tipping movement’s ringleader — where he tells reporters and TV hosts that diners should expect his restaurants’ menu prices to be “the exact same” as what they used to pay before with tip (so: the meal costs plus about 20 percent). The suit then mentions how he met with 15 “top” New York restaurateurs in 2015 to “solicit participation by the attendees,” many of whom followed his lead. The plaintiffs see a plot being hatched, and are sore because it turns out prices actually increased by a lot more than Meyer had promised. For instance, Eleven Madison raised its prices by 31 percent, and a three-course dinner at Meyer’s Modern went from $98 to $122, “an increase of 24.5 percent.” The plaintiffs note the coincidence of Modern’s profits one month later being “the highest ever.”

Essentially, the suit conjures a conspiracy out of the generally agreed-upon idea that the no-tipping movement can’t succeed unless “everyone does it,” as it makes a point of quoting Colicchio saying. To pad their pocketbooks — versus the movement’s more angelic self-professed notion of instituting fairer wages — it argues Meyer and his co-conspirators colluded in a “horizontal price fixing” scheme by eliminating tips all at the same time. (This way, no lone-wolf restaurant got penalized by consumers.)

The complaint wants the lawsuit thrown open to anyone who ate at one of the defendants’ restaurants while a no-tipping policy was in place. It demands restaurants repay plaintiffs an amount equal to three times their gratuity-included bill, plus interest and legal fees, and “withdraw from the conspiracy.”

Danny Meyer Accused of Using No Tips to Overcharge Customers