NYC restaurants sued over tipping practice

Claudine Zap

Several New York City restaurants including Applebee’s, Olive Garden and Red Lobster, are being named in a lawsuit over alleged deceptive billing practices, "CBS This Morning" reports.

The network posted images of an Olive Garden check with a line for an “automatic gratuity” of 18 percent added to the price of a meal, as well as a place to add an additional tip, regardless of the number of diners. An Applebee's check added a 17 percent automatic gratuity, saying it was "payable at guest's discretion."

“They want to squeeze that extra little dollar that they can out of everybody,” Evan Spencer, the lawyer who brought the $5.5 billion class action lawsuit, told CBS, adding, “A tip and a gratuity are exactly the same thing,”

New York City law says restaurants may not add surcharges to listed prices except for groups of eight or more.

Darden Restaurants, which owns Olive Garden and Red Lobster, released a statement to CBS responding to the suit. “The automatic gratuity is a convenience for our guests," the statement said. "Our guests always have the option of adding to, reducing or completely deducting the automatic gratuity before paying their check.”

The big chains aren't the only ones adding on automatic tips. Tony restaurants like Per Se, Lavo and Morton's also work in an automatic tip, the food blog Grubstreet noted. The lawsuit could impact some 2,000 restaurants in New York City.

Ted Dimond, a tennis pro who brought the suit, told the New York Post he wants to see diners get back $50 plus $1,000 for "‘willful violations,’ where restaurants trick diners into adding a second tip when one is already included.

A Long Island man was arrested in 2004 for refusing to pay an 18 percent restaurant tip. But the local district attorney dropped the charge, Time magazine reported, saying tipping is at the diner’s discretion.