Several top restaurateurs in New York are being sued after dropping tipping in favor of a "service included" format.

According to news reports, Shake Shack king Danny Meyer, who operates popular places such as Union Square Cafe, Gramercy Tavern and Marta, joined with several other "pricey" New York restaurants to change tipping policies to a "service included" format. The restaurateurs claim their goal is to pay workers more equitably and make customers’ lives easier by raising menu prices and overall wages by the same percentages.

Now, they are facing a class-action lawsuit that alleges the restaurateurs were really out to illegally line their own pockets because the "service included" places raised menu prices by higher percentages than tips typically given by customers. The lawsuit accuses Meyer of ringleading a price-fixing “conspiracy” that “unlawfully transfers millions of dollars from customers and servers to restaurateurs."

The suit demands damages for every supposedly overcharged customer based on “credit card records and other evidence of purchases.”

Meyer maintains that the “service included” is fairer to workers. A spokesman for Meyer told news sources, “We intend to vigorously contest the suit.” It would be a big mistake to laugh it off. Although the case was filed in California, it’s only a matter of time before ruthless New York barristers get into the act."

—Source: nypost.com