Danny Meyer Settles Tipping Lawsuit Suit for $700K

Danny Meyer, the hospitality guru who garnered worldwide attention when he announced that he’d eliminate tipping at all of his restaurants so that he can better compensate his workers, has agreed to settle a class action tipping lawsuit at Gramercy Tavern, one of his most heralded establishments, for $695,000, court documents show. It was filed in 2015, before the restaurant switched to no tipping.

The class action suit, brought on behalf of two ex-bussers, alleged that “non-service employees” like expeditors, silverware polishers, and wine managers wrongfully participated in the restaurant’s tip pool, and that Gramercy Tavern wrongfully retained all or part of a service charge during private events.

These are the type of scenarios that no-tipping restaurants are more or less immune to. Gramercy Tavern switched to gratuity-free dining last December.

The full settlement amount goes not just to the workers but the lawyers representing them. The three plaintiffs attorneys and their paralegals are set to collect $143,000 in fees; They’ve also claimed $2,143 in expenses, which include $289 in meal expenses and $135 in taxi charges. The full settlement amount will be further lowered when a claims administrator is appointed (in a recent Roberta’s wage suit, that administrator claimed $25,000).

So let’s say that $550,000 or so will be divided among the 219 current and former Gramercy Tavern staffers, including waiters, captains, bartenders, and bussers, who are eligible to join the settlement. That works out to about $2,510 per employee, before taxes (though a handful of the lead plaintiff staffers could receive at least $6,000-$7,000 under the agreement).

Any unclaimed portion of the settlement will be donated to City Harvest, a hunger relief charity that rescues food waste from restaurants. Meyer’s Union Square Hospitality Group admits no wrongdoing as part of the settlement.

The settlement is set for final approval before a judge on 6 April 2017.