L.A. eateries adopt surcharge for employee health, get charged with price fixing

Trying, they said, to be responsible employers, a group of Los Angeles restaurants banded together and adopted a 3 percent surcharge on bills to help secure healthcare coverage for their employees. Now San Francisco attorney Daniel Sterrett — who does not deny that the surcharge is going toward the announced purpose of employee healthcare — has filed an intended class-action lawsuit saying the owners have violated California law against price-fixing. [CBS Los Angeles, ABA Journal]


  • Well of course you can’t do that. Surcharges are pretty common in San Francisco, but every restaurant sets their own policy if they have a surcharge (either a percentage, with varies from restaurant to restaurant or sometimes a per-customer charge). It’s perfectly reasonable for a restaurant to do this and owners can use their judgement of their customers and the market to set prices accordingly. But if they actually all sat down and agreed to 3% at the same time, that’s very different.

    • I am missing your point here. If I want to get together with my fellow competition and form a restaurant association where recommendations on costs, charges, etc are made, but am free to adopt those recommendations or not, is that a crime as well?

      If I see an owner of another store in my restaurant and he says “what is this surcharge thing?” and I explain it to him and he adopts it, are we guilty then as well?

      Sorry, but this is a case where the government should butt the heck out. This is not price fixing where prices for items are established across the board. As the surcharge is based on a percentage, 3% on a Big Mac is going to be different than 3% on filet minion and a baked potato.

      If people band together (that ol’ pesky Constitution thing) and decide to voluntarily add a surcharge, that is none of the government’s business. Not here,. Not in this case.

      If the government wants to run businesses, let them demonstrate how well they can do it because from where I sit, they cannot run or control any market worth crap.