In 2016, Seattle celebrity chef Josh Henderson eliminated tipping from his restaurants, which, on the surface, seems like a fine idea. Restaurants took the burden of gratuity off the diners and, instead, implemented a 20% service charge across the board, with that service charge funding wages and benefits. However, this change ended up getting Henderson into some hot water. Employees felt that the service charge was still technically a “tip” and, as a tip, all of the money from that service charge should have been given to the workers, not allocated as management saw fit.
By 2018, Henderson had a lawsuit on his hands, with employees saying that, since not all of that service charge ended up in their pockets, the change qualified as wage theft. Henderson settled with the employees for $1 million, but not before he had to sell off some of his restaurants, nine in total, to other chefs in the Seattle area.