Love them or hate them, employee wellness surcharges have begun sprouting at restaurants across the Twin Cities. Typically, it’s a 3 percent fee tacked on the end of the bill. Restaurateurs say the surcharges are needed to offset growing health care costs and mandatory minimum wage increases.

“You can only take so much pain,” says Kim Bartmann, owner of Bartmann Group, which operates Barbette, Tiny Diner, and a handful of other restaurants in the area. “Health care costs have been rising for years in double-digit percentages.”

In 2017, she began instituting an employee wellness surcharge at her restaurants, following in the footsteps of several restaurants on the West Coast.

Bartmann was the first to implement the surcharge in the Twin Cities, but she’s missed a second distinction—the first lawsuit challenge. That honor now belongs to Blue Plate Restaurant Group. Late last month, Minnesota resident Christopher Ashbach filed a class action suit against Blue Plate over its employee wellness fee. In a Nov. 25 filing in Hennepin County District Court, Ashbach’s lawyer argues that the surcharge constitutes “fraud, misrepresentation, and deceptive practices.”

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Ashbach’s attorney Jon Farnsworth says his client doesn’t take issue with Blue Plate offering health care coverage for employees. It’s simply a matter of how the wellness surcharge is disclosed. The placement of the surcharge near the end of the bill “creates a likelihood of confusion or misunderstanding,” the complaint says.

“We are very supportive of businesses offering health care and other wellness benefits to employees,” says Farnsworth, an attorney with law firm Spencer Fane LLP. “But in this particular instance, I think it’s deceptive. I don’t think it’s disclosed properly. And on top of that, there’s a fundamental lack of disclosure about who’s getting the benefits and where that money is going.”

As a result, Farnsworth is asking to “recoup the fee that’s been paid by consumers.” He’s also asking for an injunction against the fee.

For its part, Blue Plate notes that it prints information about the employee wellness surcharge on its menus. The company began instituting the fee in June.

“Blue Plate restaurants are proud of the benefits we provide our valued employees and their families,” the company said in a statement. “We respect the legal process and will continue working under the direction of legal counsel.”

Marshall Tanick, a Twin Cities lawyer who’s not involved in the suit, says the case will likely hinge on the timing of the disclosure of the fees. For him, the main question is: Did the restaurant group disclose the surcharge before the customer made the purchase?

“Businesses do not have to disclose components of charges for goods or services,” Tanick notes. “However, there may be an obligation to properly disclose surcharges that are above and beyond the quoted price. The key issues here are the degree of disclosure and the timing of disclosure.”

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“I think it’s going to be hard to win, but not impossible,” Schultz says. “The deception is possibly there. It could be unethical. But I don’t think, under the current Minnesota law, it would cross over into illegal behavior.”

Meanwhile, other Twin Cities restaurants that have implemented the charge say complaints have been few and far between. Brent Frederick, owner of Jester Concepts (Parlour, PS Steak, Borough), says many people have shown support for the fee. His company began implementing the surcharge in January 2018.

“It lets people know that we’re taking care of our employees, which I think a lot of people in Minnesota value and appreciate,” he says. “I would say 99 percent of our guests that have mentioned it to us love that we’re doing it.”

There has been the occasional complaint, he says. And in those cases, the restaurant will simply waive the fee. Ditto at Bartmann’s restaurants. (Blue Plate, however, says its surcharge can’t be waived.)

Kip Clayton, VP of marketing at Parasole Restaurant Group, says the feedback he’s heard about Parasole’s surcharge has been generally positive, too.

“We communicate it on every menu,” he notes. “What we state on the menu is that in order to maintain quality benefits for our employees, we add a 3 percent employee wellness surcharge to guests’ checks. All of our staff is trained on how it works.”

It’s worth noting that minimum wage has been steadily increasing in the Twin Cities. In Minneapolis, the minimum wage now sits at $11 an hour for employers with less than 100 people. For companies that employ more than 100 workers, the minimum wage is $12.25. It’s a similar story in St. Paul, where the minimum wage is now $9.86. Each city has already authorized a $15 minimum wage.

Undoubtedly, the costs of running a restaurant have been growing. But one question lingers among many restaurant-goers: Why not just raise prices like other retail businesses? Bartmann says that’s a “lot more difficult than it sounds.” She points to her Red Stag Supper Club as an example. In 2008, she charged $24 for a chicken dish. Now, the same dish costs around $26, a roughly 10 percent increase.

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And, of course, there are some general expectations for the cost of entrees. (“You don’t want to pay more for a hamburger. That’s the bottom line,” Bartmann says.)

“This is just mostly independent restaurant people trying to survive and still offer benefits in a competitive labor market,” Bartmann says.

I don’t know how the lawsuit will play out, but frankly this surcharge looks like more like an attack employee wages than a promotional campaign. Restaurants don’t have to itemize their expenses on their bills so why is THIS expense highlighted? Wages ARE intrinsically health and wellness expenses and if 3% actually covers health care expenses Blue Plate is getting a great deal from someone.

This is just a way of complaining that they have to raise their prices in order to pay their employee’s wages. Like any other business they could simply raise their prices and more than likely no one would notice. Are YOU going to notice that your BLT costs 3% more than it did the last time you ordered it? By making this “expense” explicit on the bill their telling their customers that they’re being forced to raise prices. They’re inviting complaints and scrutiny.

SMH. Consumers want transparency and then when they get it, the result is a lawsuit. If Ashbach doesn’t like it, eat elsewhere. Frivolous lawsuits need to end. The fee was disclosed, end of story.

I think the lawsuit is silly and a cheap form of “gotcha” by a lawyer who needs better things to do with his time. The surcharge is on the menu, at least at restaurants I go to. Are they going to sue restaurants that have to pay entertainment taxes to the city here or elsewhere?

Why not sue auto dealers for adding delivery charges? Those also are not secret to anyone who looks at fine print, and they are listed on purchase agreements–but they are not featured in price advertising.

This, along with the high taxes already added on to bills in Minneapolis are the reason I stopped going out to eat there. I’ll bet 10 to one a lot of good restauranteurs move to the suburbs. White Bear has a couple of really nice high end places that do well.

You say you don’t like it go somewhere else the restaurant will eventually move to the suburbs how are the city council members going to get their free meals if there’s no more restaurants in the Twin Cities

Speaking for myself, I’d have to see the disclosure on the menu to make a determination of deceptive business practices. I’ve often seen signs placed prominently above larger tables that disclose a 15% gratuity will be added to the bill for groups larger than “x”.

Most people understand the rationale for that. However, if the “wellness fee” is placed at the bottom of the menu in small print, the message people are getting is not letting them “know that we’re taking care of our employees”, it’s sneakily filching the cost of doing business from unwitting patrons.

Additionally, it must be said that 3% may not sound like much, but we must remember it is in addition to the 6.875% state sales tax, 2.5% gross receipts tax on liquor, 0.15% Hennepin County sales tax, 0.25% Transit Improvement sales tax, the 0.5% Minneapolis sales tax….and (we are not done) the 3% restaurant tax which applies to food and beverages sold by downtown restaurants.

I don’t believe the lawsuit has much merit. That said, I agree with Paul when he asks why is this particular expense highlighted? If you are going to highlight health care costs, why not highlight the electric bill, and why we are at, let’s highlight how much is profit.

Frivolous lawsuit. Super lame that the restaurants are doing this and they deserve all the bad publicity they can get, but what a waste of time. When I tell clients it will take a long time to get their cases to court, I’m going to point to this as an example of the crap clogging up the system.

They might consider adding an attorney fee surcharge to menus so their “guests” can discover how much they are paying to defend against this anti-employee stunt.

Just add the costs to the price of the meal and quit trying to pretend that restaurants are “special businesses” that deserve consumer sympathy. You are either worth what you’re charging or you are not, the market will make that decision for you.

More class-action nonsense. What next, a class action claiming customers never read the menu’s disclosure of mandatory service charges for groups of X or more?

Assuming this idiocy goes anywhere, each member of the class should be limited to one bite at the apple. You can’t claim to have been defrauded after paying the fee once before, particularly if it was itemized on the check .

Ms. Bartmann has chosen to set up shop in a lefty dominated city. Her customers (and perhaps she) voted for the people that are piling taxes on and, unlike her wellness fee, the people running for office in the TC say what they plan to do right up front; everyone knows they’re gonna get taxed real hard. But her experience tells her these same folks are not willing to pay the tab for all that progressiveness when given the option.

She must know it’s only going to get worse when the $15 minimum wage kicks in. Good time to scout a new space in a less progressive municipality, in my opinion.

This is part of the hidden costs of our healthcare system. With Medicare 4 All, this wouldn’t be a problem.

On Thanksgiving, we enjoyed a buffet at the restaurant at Edinburgh Golf Course. Our bill came with this surcharge. We asked the server about it. She had been with a the previous catering company for 18 years at this location and when they lost the contract, she opted to stay at the golf course because the original employer didn’t have any other jobs in that part of town. She said that while D’Amico collects the charges employees must work for ONE YEAR before they are even eligible for health benefits. Yes, even those that were put in her position of a contractor at a public facility being changed, going to the same place for nearly two decades. I’d like D’Amico to open the books and show what they are doing with this money and who it is benefiting.

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