Overview
In an opinion Friday, Judge Oetken refused to dismiss a putative class action brought by Applebee’s patrons who allege that the tabletop computer tablets at the Broadway and Times Square locations force customers to leave a minimum tip of either 15% or 18%, and thereby deceive customers into believing tipping is mandatory, in violation of New York's consumer protection laws.
The defendants argued (among other things) that the social norm of leaving a tip was grounds to dismiss the case, but Judge Oetken disagreed:
It is true that diners often consider the tip to be a de facto part of the price. This being New York City, fifteen percent may indeed be a threshold beneath which no self-respecting diner would dip. Nevertheless, the social norm is that tips are expected but subject to the customer’s discretion. At least that is what the Complaint alleges. In other words, consumers expect to pay a tip, but they also expect to have the right to leave a lower tip for poor service. Forcing customers to leave a fifteen- or eighteen-percent tip defeats those consumer expectations. Moreover, Defendants’ social-norms argument is undermined by their professed reason for the mandatory tip structure: that the two restaurants are frequented by tourists unaccustomed to tipping. In many parts of the world, particularly where restaurant workers earn a living wage independent of their tips, ten percent is a generous tip. In some countries, tipping is even considered rude. The Court does not doubt Defendants’ contention that all tips go to the waitstaff and not to the restaurants. Indeed, Defendants’ intentions may be noble—to make sure that their hardworking servers are not stiffed by uninformed tourists. Nevertheless, not all of Defendants’ customers expected to be assessed a mandatory fifteen- or eighteen-percent tip. Accordingly, the fact that tipping is a well-accepted social norm does not defeat Plaintiffs’ claims.
