New York Restaurants Sued For Adding Illegal Tips

It's not legal in New York to add service charges to listed prices except for parties of eight or more, but one New Yorker says it's been happening anyway, and he's filed a class-action lawsuit to stop the practice forever.

Ted Dimond, a tennis pro who teaches celebrities like Naomi Watts and Liev Schrieber to improve their swings, says several Midtown restaurant chains, including Olive Garden, Red Lobster,  Ruby Tuesday, and Applebee's, have been illegally adding gratuities to the checks of smaller groups of diners.

Dimond's lawyer was careful to state that his client also dines at more upscale restaurants where illegal tipping happens, but that they chose to take on the big chain restaurants because they were the "most egregious violators," according to the NY Post.

Dimond's suit claims the restaurants have engaged in willful price fixing that "has jointly raised the prices of dining in restaurants while simultaneously lowering the quality of products and services."

The class-action suit seeks $50 plus $1,000 for "willful violations" where Dimond says customers are tricked into adding a second tip on top of an automatically charged gratuity.

Cathleen Duffy of the Marriott Marquis in Times Square, one of the venues named in the suit, said the hotel's Crossroads American Kitchen and Bar charges an 18 percent gratuity on parties of six or more, which is stated on the menu, but that she was unaware of the NY law specifying that automatic gratuities could only apply to parties larger than eight people.