San Diego Restaurants Sued Over Minimum Wage Surcharges

[Toliver]

"Lawsuits claim top San Diego restaurants defrauding consumers with minimum wage surcharge"

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Lawsuits have been filed against more than a dozen San Diego restaurants and dining groups claiming they are defrauding their patrons by illegally tacking on a surcharge to customers’ bills that many operators have been using to defray increasing labor costs.

Named in the suits, which have been filed over the last eight months by a local consumer rights law firm, are some of San Diego’s highest profile dining venues, from George’s at the Cove and Mister A’s to Sammy’s Woodfired Pizza & Grill and the Cohn Restaurant Group, which has close to a couple dozen restaurants in the county.

The surcharge was mentioned in another eGullet discussion (which I can't find).

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The lawsuits allege that the surcharges violate multiple statutes of the state business code, among them false advertising and unfair competition. A section of the California Consumers Legal Remedies Act is also cited in some of the complaints to bolster their claim that the surcharges are unlawful.

Specifically, the complaints assert that the restaurants are deceiving customers by not reflecting the surcharge in the pricing of the individual menu items. The suits, in addition to seeking class action status, are asking for a court order to halt the practice and that consumers be refunded.

So instead of raising prices to cover the minimum wage increase, the restaurants just tack on a surcharge to the customer's bill. In many cases the surcharge was unannounced/not advertised. "Here's your bill...Surprise!" 

How any business person/owner would think this was legal is beyond me. 

[Smithy]

Is this the eG discussion to which you referred, @Toliver?

[IndyRob]

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“We’re saying, just be up front with people. Don’t be deceptive. If the steak is $50, say it’s $50, don’t say it’s $50 plus 3 percent. Otherwise, they find out at the end of the meal that the steak is really $51.50. They shouldn’t have to sit there and figure out how much it costs.”

 

If I'm going to be angry about paying $51.50 for a steak, it's not the 1.50 part that's going to inspire the rage.

 

On the one hand, why not just build it into the menu price?  On the other hand, I looked at the online menu for Sammy's Woodfired Pizza and Grill and disclaimers are clearly visible on their 'select location' page as well as at the top of the menu itself.  This isn't fraud.  What about something on the menu that says 'a 15% gratuity will be added to orders of 8 or more'?  I see that all the time.

 

It looks like some restaurants want to say "Here's your share of the fallout from the new minimum wage law (which we [ahem] support entirely)." While the other side is either trying to suppress that message, or, um what?  Trying to protect their rather dimwitted $50 steak consumers?

 

C'mon man, a surcharge may not be very consumer friendly, but do we need to get the courts involved?

 

[edit]And, BTW, if I pay a $1.50 surcharge, should I subtract that from the tip?

Edited November 25, 2017 by IndyRob (log)