Federal judge allows mandatory tipping class action to proceed
Federal judge allows mandatory tipping class action to proceed

A federal judge ruled Friday that a class action lawsuit [opinion, PDF] may proceed against Applebee’s for its mandatory minimum tip policy.

US District Judge Paul Oetken of US District Court for the Southern District of New York [official website] ruled that the restaurant needs to disclose the mandatory policy to customers upfront.

Oetken opined that while “tipping is a well-accepting social norm [it] does not defeat plaintiffs’ claims. [T]he social norm is that tips are expected but subject to the customer’s discretion.”

The plaintiffs filed suit in March after eating at one of Applebee’s locations in Times Square and the computer system required them to tip at least 18 percent. The plaintiffs allege this is an illegal mandatory surcharge.

Applebee’s argues that the menu adequately disclosed on the menus, which notes that prices do not include taxes or gratuity, thereby invalidating plaintiffs’ claims. This was the same argument [opinion, PDF] they used in 2014 in the same court, resulting in a dismissal. However, according to Oetken, “the disclosure was inadequate” in this instance.

Plaintiffs allege unfair business practices, false advertising, breach of contract, negligent misrepresentation and unjust enrichment.