Danny Meyer’s Union Square Hospitality Group has agreed to pay $695,000 to settle a class-action lawsuit alleging the fine-dining operation illegally shared certain tipped employees’ gratuities with other staff members, according to press reports.
The lawsuit addressed procedures that were in place before USHG dropped tipping in favor of set incomes for all employees. That move, which was copied by several other New York City restaurants, was intended to narrow the pay gap between front-of-house and back-of-house staffers. But it also lessened the company's exposure to legal actions over tip pooling. USHG began the shift to all-inclusive pricing in late 2015.
The settlement involved about 20 employees. The suit was initially filed by two bussers, but was later certified as a class action.
The agreement is subject to court approval, with a hearing set for April 6, according to the news reports.