WASHINGTON (DC News Now) — A local D.C. restaurant group is facing a lawsuit after it was accused of charging “junk fees.”
Travelers United, a D.C.-based nonprofit, is suing Clyde’s Restaurant Group over an ambiguous “2023 surcharge.”
DC News Now talked with several customers who didn’t realize there was an extra fee until they paid. Some others didn’t notice at all.
A 3.75% surcharge is listed at the very bottom corner of the menu at all restaurants in the Clyde’s Restaurant Group.
Since Initiative 82 passed a year ago, raising the tipped minimum wage, restaurants across the district have added service fees.
“If you’re visiting a city, you shouldn’t have to face hidden fees,” said Lauren Wolfe, counsel for Travelers United.
Clyde’s Restaurant Group has a “2023 surcharge” on its menus that states, “Our restaurants have been operating with extraordinary increases in the cost of doing business. High inflation, rising wages, and supply chain challenges have continued beyond the pandemic creating a difficult operating environment. We have reluctantly chosen to implement a separate 3.75% fee for 2023 with the hope that it can be eliminated in the future as conditions improve. We appreciate your support and understanding.”
However, it doesn’t specify what the 3.75% fee is going toward.
“The D.C. attorney general’s office was very specific, saying that restaurants that are charging fees need to be extremely specific to know where that money is going,” Wolfe said.
That’s why Travelers United is suing the group for deceptive and unfair fees under D.C.’s consumer protection law.
“I think it kind of is an underhanded way to get extra money out of people,” said Rae Umlah, visiting from New Jersey.
Umlah and her family visited the Old Ebbitt Grille. She said she didn’t see the fee before she paid. She’s OK with higher prices if it means workers get paid more.
“So I know if I’m ordering a steak and it’s $50, it’s $50. Or I’m ordering a steak that’s $75 it’s $75, not $75 plus 3.75% for a fee,” Umlah said.
According to Restaurant Business, in 2020, Old Ebbitt Grill ranked as the third highest-grossing restaurant in the country with more than $29 million in annual sales. Restaurant Business noted a 2019 renovation cut into dining room capacity and eroded sales — and Old Ebbitt Grill didn’t make the top 100 list in 2022.
“When you have one price on the menu but in reality, a consumer is going to be charged another price with a hidden fee that’s not clear,” Wolfe said. “It’s a junk fee. And we don’t think that that’s legal under D.C. law.”
Travelers United has also filed a complaint that the surcharge violates alcohol licensing requirements.
DC News Now reached out to Clyde’s for comment. A spokesperson said they were working on a statement earlier Thursday afternoon, but did not respond by air time.