" 'They were receiving all of it, there was no part of it that was a profit center for us,' Henderson said. 'I will swear on a Bible on that.' "

Uh-oh. Any time they bring up the Jesus -- grab your wallet.
Or an attorney.

I think this is really interesting. Tipping is a bad/unfair/racist/sexist way to pay people. I worked in the industry for 10 years and if anyone thinks people take a 20 min break in the middle of dinner rush I have so real estate to sell them.

I’m glad the employees got the money owed, and they should not have had to sue for it.

‘"They were receiving all of it, there was no part of it that was a profit center for us," Henderson said.’

When you tell the patrons the service charge replaces the tips, that implies the service charge goes directly into the pockets of the staff, just like the tips did — that’s what “replaces” or “in lieu of” implies.

That said, I hope all restaurants do away with tipping, and go to a true service charge model. It’s not the patrons’ job to pay the restaurant’s employees.

@3:

"It's not the patron's job to pay the restaurant's employees"

So, you think you only pay for the food when you eat at a restaurant?

Using service charges to pay the employer's contribution of workers' health care premiums is bullshit.

But distributing a share of service charges to cooks and dishwashers as well as "service staff" is entirely legit.

Thus the out-of-court settlement, I suspect.

No opinion on the immediate matter at hand but - Fuck American restaurant owners and their fucking entitled servers. I own a business and pay my staff a salary and benefits. I don't add a surcharge for clients to pay and don't have a tip line. It works in Europe and Japan. Why not here? With our new 'living wage' $15.00, how dare they increase prices and add a 20% service charge line that gets taxed as well! And fuck your $12.00 for a glass of cheap wine and suggesting - demanding that we tip or pay a service charge on a costly bottle of wine that takes no more effort to serve than a glass of swill.

Here is how I deal with it - I don't go out nearly as much and when I do, it is usually to the smaller neighborhood place where I can get a beer for less than ten bucks, and a nice plate of tacos or burger with a smile, often served by the owner.

Folks, most of us have kitchens, learn to use them. And Blue Apron makes me into an average chef for ten bucks a meal. Someone needs to pull an Amazon level disruption on American restaurants. Maybe the trend in SF where the patrons serve themselves has legs. I am so done with going out, unless it is under duress to please my partner, or a true celebration where there are no alternatives.

@4: Since you claim to need every last little thing spelled out for you, and since I'm a good little liberal who likes to help the less fortunate, I'll indulge your special needs. It is not any customer's job to set employees' wages, health care benefits, or other compensation at any business the customer patronizes. That is management's job. (Hey -- it's almost like they're called "management" for a reason!!1!)

Tipping as a practice dates to guests at the mansions of landed gentry. It has no place in our modern, democratic republic, and the faster we go to service charges (or just raise the damned prices already and be done with it) the better.

@6: And yet this story tells us about a very successful restaurant owner selling some places to work on other concepts he's developing. How's that square with your doom-and-gloom story?

@7: I'm going for a beer and comfort food at my neighborhood brewpub. Thank you for staying home.

Back in the olden days, when every restaurant worth its salt was dimly lit, with loads of chandeliers, big fouffy drapes, and Muzak, you had different tip trays presented to you at the end of the evening: The sommelier, the principal waiter, and the service people. Thankfully, those days are gone.

A waiter at someplace like Canlis can make a very good living off of tips, but the folks at places like Sizzler are just scraping by.

@10. Tell me where I am wrong or ignorant. I really want to know.

@11

If we define "successful" in the restaurant world as above the 50/50 line for lifetime net profit for the business, then an unsuccessful restaurant owner only opens one restaurant, and it closes within two years.

If your business is big enough to be settling million-dollar lawsuits, it's almost certainly a successful one.

It's pretty well known in the biz that Josh Henderson is a pretty big risk-taker (though it's sometimes phrased less politely). That is not at all the same thing as "unsuccessful."