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Clyde's Restaurant Group drops added fees on bill after being sued by consumer group

KNEAD Hospitality becomes second restaurant group sued by Travelers United over fees to offset costs of Initiative 82.

WASHINGTON — For the second time in three months, a major restaurant group in the District has been hit with a lawsuit for tacking fees onto your bill to offset cost increases required by Initiative 82, which requires restaurants and bars to raise the minimum wage of tipped workers.

The lawsuit against KNEAD Hospitality + Design, which operates nine restaurants around the city including Mi Vida., Succotash and Gatsby, accuses the restaurant group of deceptive advertising practices and violating D.C.’s Consumer Protection Act for adding a 3.5% fee on every bill to “offset the impact of D.C.’s Initiative 82.” 

The food is delicious. The service is excellent. The deceptive fees are illegal,” said Lauren Wolfe, lead attorney for the consumer group Travelers United. 

Although KNEAD group posted their fees, the lawsuit filed by Travelers United, a consumer protection nonprofit located in the District, claims the fees charged by KNEAD “functions as restaurant resort fees, a total junk fee where the consumer gets nothing other than a deceptive advertised price.”  

The same group filed a very similar lawsuit in November against one of D.C.’s oldest and most successful restaurant groups, Clyde's, for the posted fee it was tacking onto customers bill. Clyde’s called it a “2023 surcharge.”

In November, Clyde’s Chief Operating Officer Kevin Keller said he believed the surcharge explanation – which cited “high inflation, rising wages and supply chain challenges” – is clear and does not violate consumer protection laws.

The case was supposed to go to court next week, but on Friday, Clyde’s Restaurant Group President John McDonnell told WUSA9 that Clyde’s “terminated our surcharge in early December” and the suit was dropped.

McDonnell said Clyde’s would have “no further comment, based on our agreement with Travelers.”

Wolfe said these two restaurant groups are not alone in charging fees.

“We will continue to go after restaurants that do not adequately disclose that they are charging consumers to essentially lie about the advertised price,” Wolfe said.

“Travelers United has no issue with the restaurant itself,” Wolfe added “But we have a problem with these deceptive fees not just at this establishment, not just with this restaurant groups, but with the fees at all of these restaurants. We just do not think that deceptive and hidden fees is the way to run any business.”

KNEAD Hospitality and Design did not immediately respond to a request for comment sent through the company’s general inbox, and a manager at Mi Vida at the Wharf said she was not authorized to give us a better way to contact the company’s headquarters.

But Friday, WUSA9 checked the online menus for each one of KNEAD’s restaurants, and that 3.5% Initiative 82 fee no longer appeared.

Wolfe said she was unaware of the apparent change, and for now, the lawsuit stands.

The DC’s Attorney General’s Office which enforces the consumer protection act told WUSA9 it had no comment on the latest lawsuit since their office is not involved.

A spokesperson added the AG’s office continues to respond to hundreds of consumer complaints about restaurant fees, and they continue to follow up with restaurants to ensure that fees are properly disclosed.

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