A restaurant group that owns two restaurants in the hi-desert is facing a class-action lawsuit alleging service charges added automatically to customer bills may have been withheld from servers.
The Los Angeles-based restaurant group Last Word Hospitality, serves as the parent company for a number of LA area restaurants, including Red Dog Saloon in Pioneertown and The Copper Room in Yucca Valley.
LA Eater reports that a lawsuit filed in Los Angeles County Superior Court by a former server employed by the restaurant group alleges that the service fees added to customer bills should have been considered as gratuities and tips. The lawsuit alleges that the fees should have been distributed only among servers, rather than to all employees and managers at the restaurant. The lawsuit also questions whether the fees were properly distributed.
When asked by Z107.7 for comment, Adam Weisblatt, co-founder of Last Word Hospitality provided a statement saying, “Deciding to enact a service charge was an ethical decision of how to run a restaurant that equitably pays staff. We want to create meaningful careers and see this as an important aspect of being good employers. Dishwashers are as important to us as managers. We will address the lawsuit with the same good intentions we hold ourselves to in all forms of business. We have not not yet seen the complaint, and will comment more in due time.”
In July, one of the partners of Copper Room and Red Dog Saloon, Eric Michel Alperin, spoke with Z10.7.7’s Hilary Sloane about the 20% service fee charged at the restaurants. He said then that 12.5% of the service charge at Red Dog goes directly to staff and is calculated by hours worked. Management labor costs and healthcare premiums get 3.5% of the service charge, and that Red Dog also offers a 401K contribution plan.
According to California law, tips cannot be used to compensate managers, supervisors, or owners.
Z107.7 spoke with a former employee of one of the restaurant group’s hi-desert restaurants, who spoke on condition of anonymity. The former employee said that the lack of transparency surrounding the service fee, specifically how it was collected and then distributed, was a major factor in their decision to leave the restaurant. “It never made sense to me, and a lot of people who work there feel that way.”
“They told us what to say to people when we explained the service charge to customers, but it made me feel like I was lying to people. If you’re leaving a fat tip for your server, you think it’s going to your server. I wasn’t happy with what they were doing.”