Restaurant owners accused of adding illegal surcharges to customers' bills in a lawsuit have responded that the increased minimum wage is hurting their business.
Some restaurants raised prices on menu items or laid off staff. Others added a surcharge to their customers’ tabs, in an effort partially aimed at highlighting the cost of the higher wages.
City Attorney Mara Elliot has already warned restaurants the surcharge may be illegal. In response to the private lawsuits, Elliot released the following statement explaining that both her office and the private law firm are following valid tactics to address deceptive restaurant pricing:
"The law provides different tactics for addressing deceptive restaurant pricing. Our prosecutors have taken one approach, a private law firm has taken another. Both are valid and seek the same outcome, which is for restaurants to tell customers the truth about the price of a meal."
Now lawyers are suing a handful of restaurants that add on the fee, according to the Union-Tribune. The lawsuits allege the fees violate laws meant to protect consumers from false advertising and unfair competition.
The California Restaurant Association said the lawsuits are nothing more than a shakedown.
NBC 7 spoke with several restaurateurs who said the minimum wage increase is making it hard for them to balance out fairness between servers who get tips and the back of the house staff that depend only on their hourly pay.
One customer, Dan Scripps, believes the surcharge is misleading.
”Yeah, that’s kinda sneaky,” Scripps said, while dining at Jose’s in La Jolla Tuesday afternoon. Jose’s is not among those restaurants charging the surcharge.
“I mean I like the idea of servers getting minimum wage because my wife was a waitress for many years and we struggled with it,” Scripps said.
Elliot spoke out against the surcharges during a press conference last January.
Her office has filed a civil enforcement action against Barefoot Bar and Grill in Mission Bay for allegedly failing to disclose the surcharge on the menu and then doing so in tiny print.
Elliot's office stated they would like to stop restaurants using deceptive billing practices and protect consumers:
"Our strategy has forced restaurants to change their billing practices and led to a sharp drop-off in complaints. We will watch these private lawsuits with interest and hope they also lead to greater consumer protection."
A representative of the restaurant said they could not comment because of the ongoing legal matter but supported the California Restaurant Association’s stance.
One restaurant manager in Pacific Beach told NBC 7 that adding the surcharge made poor business sense because most of his customers like to relax while eating out and not worry about the minimum wage.
“They don’t want to be reminded of some complicated political matter and how much their servers and the kitchen staff make,” he said.