Legal Law

Worker Wellness Surcharge Lawsuit Dismissed; 52 Cent Cost Adequately Disclosed, Not Materials

Last December, I covered a lawsuit which alleged that Blue Plate Restaurant Co. in the Twin Cities engaged in consumer fraud and other malfeasance by charging customers a three percent “employee wellness surcharge.” That lawsuit has since been dismissed, and I spoke with the lawyers on both sides of it to provide an update on where things stand.

Joe Windler of Winthrop & Weinstine represented Blue Plate in the matter. Windler represents a number of bars, restaurants, and local breweries (heroic practice area, if you ask me) in addition to Blue Plate, and was obviously pleased to see his motion to dismiss granted.

According to Windler, this case wasn’t really about the Consumer Fraud Act, which he fully supports as an appropriate piece of legislation in the right contexts. Rather, Windler saw this as an important case for restaurants that operate on very thin margins to begin with, especially those in municipalities with requirements to provide employees with healthcare, sick leave, etc., so as to have the option to include small and adequately disclosed wellness surcharges on diners’ tabs.

Indeed, the plaintiff, Christopher Ashbach, only paid an additional 52 cents for the employee wellness surcharge on the order which served as the basis for the suit: a half-dozen oysters and a cup of coffee. In its own order, on the motion to dismiss, the district court found that the restaurant’s physical menu, the website, and the bill all disclosed and explained the employee wellness charge. Furthermore, the district court determined that Ashbach failed to show that the 52 cent charge was material to his own decision-making process when he asked for oysters and coffee (perhaps he was a victim of his own generosity; having left a pretty nice tip of $4.72 on a total tab of $19.28, it’s a little hard to argue that 52 cents really mattered all that much to you).

“I can’t emphasize enough how highly I think of my client,” Windler said. “I think the absolute world of Blue Plate as a company, and I think the world of the owners. This is a great client, a great employer, and I’m just grateful we were able to show the Court in relatively short order how meritless the claims were here.”

Windler is happy that his client can now move on and work on surviving through COVID-19. Since the order on the motion to dismiss, there has been a stipulation of dismissal with prejudice, so it doesn’t look like we have any appellate review to look forward to. Windler added that now is a good time to rally and support local bars, restaurants, tap rooms, and breweries, to the extent we can all do so safely and responsibly (I’m way ahead of him on that).

Jon Farnsworth of Spencer Fane was representing Ashbach, and he had a different perspective.

“Myself and my client are very supportive of making sure that cooks and waitstaff are healthy, this case was never about that,” Farnsworth said. “This case was about being sneaky, trying to bury things in small print. We’d be completely willing to pay extra knowing it was going to waitstaff, but this was a matter of not knowing what the charge was, one, and two, not knowing where the money was actually going.”

Farnsworth thinks there should be more overt disclosures about these types of surcharges, or more simply, that the best practice would be to just adjust menu prices. While he disagrees with aspects of the district court’s order to dismiss, he says at the end of the day his client is happy with the result in that there has been press around the issue to provide greater exposure to the fact that bars and restaurants are increasingly tacking on employee wellness surcharges to customers’ bills. If it’s any consolation, when I wrote about this suit in December (making light of it, mostly), I received a LOT more hate mail than usual from people who were also not big fans of employee wellness surcharges.

Both Windler and Farnsworth have my thanks for taking the time to offer me their perspectives on this case. I guess if you’re somewhere where the restaurants are open, the takeaway here is to strap on a facemask and go dine, but be sure to take a keen look at the menu beforehand if you don’t want to risk paying an employee wellness surcharge.

Jonathan Wolf is a litigation associate at a midsize, full-service Minnesota firm. He also teaches as an adjunct writing professor at Mitchell Hamline School of Law, has written for a wide variety of publications, and makes it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at [email protected]

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