A customer dining at D.C.’s Oceanaire restaurant noticed an unusual line at the bottom of his receipt: “Due to the rising costs of doing business in this location, including costs associated with higher minimum wage rates, a 3% surcharge has been added to your total bill.” Brian, who asked The Washington Post to use only his first name to avoid conflicts with his employer, was surprised to see the additional charge. He snapped a picture and sent it to local blog Popville, which posted a picture of his receipt. The outraged comments started rolling in.
“Just raise prices if you need to, don’t try to slip this in under the radar and then pretty much blame [it] on employees who need to make a living!” wrote one commenter. “I have no problem paying high prices to support better wages, but I do have a major problem with this sort of deceptive business practice,” said another. A third put it succinctly: “Take your political statement and shove it.”
The Oceanaire is owned by Landry’s, a company whose chief executive, Tilman Fertitta, stars on CNBC’s “Billion Dollar Buyer” and has been called “America’s richest restaurateur.” The company owns other chains, including Bubba Gump Shrimp Co., Mastro’s, McCormick & Schmick’s and the Rainforest Cafe, plus Morton’s, where readers have spotted a similar charge in the D.C. area. Fertitta has spoken out numerous times about increases to the minimum wage.
“I have no issue with raising minimum wage,” Fertitta said to CNBC in 2014, “but then the customer can’t say to us, ‘Why are you raising your prices?’ ” He called the minimum wage a “training wage” on Fox Business. (He also told CNBC last month that he thinks President Trump is doing “a great job.”)
But instead of raising menu prices, Fertitta’s restaurant appears to have tacked on the 3 percent surcharge — along with language that some interpret as shifting the blame to employees. It’s not the first time a receipt has been used to communicate a political position — this spring saw several restaurants posting messages about immigration on their receipts. Some restaurants have also instituted a similar surcharge, but with a different aim: AOC in Los Angeles has a 3.5 percent surcharge “to cover a large portion of full health care benefits for our full-time employees,” a notice on the menu reads. A group of Minneapolis restaurants recently instituted a 3 percent surcharge for health insurance, too.
The surcharge is noted on Oceanaire menus for San Diego and Boston, in very fine print at the bottom. As of Thursday, it was not noted on the D.C. menu, and Brian said he didn’t see it noted on the menu during his meal, although a statement from the restaurant said it was communicated via “signage in the restaurant.”
“I didn’t see signage either, as we were seated in the back right of the restaurant. Also, nothing on the hostess stand,” noted Brian, who dined there for D.C.’s restaurant week.
The representative did not respond to a question asking how long the surcharge had been in effect.
But it’s now been removed, at least in Washington. When contacted by The Post, Landry’s issued a statement from Tim Whitlock, senior vice president of operations and chief operating officer of the Oceanaire:
Due to the restaurant industry’s competitive market, we decided this was a temporary and nominal surcharge. The Oceanaire is committed to being transparent with our patrons and noted the surcharge on our menu, the customer’s bill and signage in the restaurant. In response to recent feedback, we have chosen to remove this surcharge effective immediately and will explore more traditional means to address the industry’s rising costs, such as raising menu prices.
An Oceanaire representative said the surcharge would be removed in all locations of the restaurant.
One day after this story was published, Landry’s reached out with a second statement, this one from Fertitta:
With more than 500 properties, I rely upon the decisions of others to help run my day to day operations for Landry’s. Unfortunately, I was not made aware of the surcharge that was put in place at my Oceanaire restaurants and the management team has been reprimanded. I ask that all customers who still have their receipt, please return to their nearest location and we will happily refund the surcharge amount. This additional cost has been removed from all Landry’s restaurants effective immediately.
The minimum wage in Washington is $12.50 and will rise to $15 by 2020, according to legislation from the D.C. Council approved last year. The minimum wage for tipped workers in D.C. is $3.33, and will reach $5 by 2020.
A study earlier this year found that minimum wage hikes can force restaurants to close, as restaurateurs have been warning us for years — but typically only bad restaurants. “Among 3.5-star restaurants, every $1 increase in the minimum wage increases the restaurant’s chances of closing by 14 percent,” wrote The Post’s Caitlin Dewey. The Oceanaire currently has 3.5 stars on Yelp.