Clyde’s Restaurant Group in Washington, D.C., has been sued by a travelers’ advocacy group for tacking a 3.75% service fee onto guests’ checks.
The group, Travelers United, says the fee is a violation of local rules governing the disclosure of menu prices. The suit alleges that the surcharge prevents customers from accurately comparing Clyde’s prices to what competing restaurants charge since the listed prices for entrees, appetizers and drinks will be kicked up by 3.75%.
“This is a price deception case,” the complaint states.
The suit solely targets Clyde’s, the operator of such landmark local dining establishments as Old Ebbett Grill, 1789 and six bar-and-grills that operate under the name Clyde’s. It is one of the city’s oldest multi-concept operators and is known for generating high volumes within its holdings. All eight of the company’s restaurants within the district are charging the service fee and have done so for about a year, the suit states.
The action notes that surcharges have become common in the District, though under a variety of names—from Restaurant Recovery Charge to Administrative Fee. They proliferated rapidly after residents voted in a ballot referendum last November to phase out the tip credit, an employer concession that allows restaurants to count tips toward the wages serves and bartenders are due.
“These function as restaurant resort fees, a total junk fee where the consumer gets nothing other than a deceptive advertised price,” the complaint states. It was filed late last month in the Superior Court of the District of Columbia.
In announcing the action, Travelers United did not say why it chose to sue Clyde’s rather than other restaurants that charge a service fee, though it indicated that two members of the advocacy group had recently dined in Old Ebbett Grill, a favorite of visiting out-of-towners.
In an email to Restaurant Business, Travelers United Counsel Lauren Wolfe said lawsuits against other restaurants could follow. In addition, "We are interested in the issue of junk fees nationally so we could take action elsewhere," she wrote.
"We will also be pursuing legislative solutions to the junk fee problem both on the state and federal level," Wolfe stated.
The suit asks the court to halt Clyde’s from levying the surcharge. It also seeks a suspension of the group’s license to sell alcoholic beverages until the service fee is dropped.
Travelers United describes itself as a non-profit group devoted to improving the experiences of travelers. As part of that mission, Travelers has pushed for outlawing hotel resort charges and other so-called “junk fees,” or surprise charges that are added to guests’ final bills.
Clyde’s had not responded to a request for comment by the time this story was posted.
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