Is it legal to hold a server financially responsible for a customer not paying?
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UPDATED: Jul 16, 2021
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It seems like a simple question: whether it is legal to hold a restaurant server financially responsible for a customer not paying, such as when they “dine and dash.” But there are really two different questions to ask:
• First, are there legal grounds to hold the server financially liable?
• Second, if the server is liable, how can the restaurant get the money from them?
Is server legally liable for a customer who skips?
The answer: “It depends.”
Specifically, it depends on whether the server was at-fault in allowing the customer to skip. With a few exceptions—and this is not one—liability, or an obligation to pay, depends on fault. Fault is based on an intentional wrongful act or on negligence, which is unreasonable carelessness.
The easy case is an intentional wrongful act. If there is evidence or reason to believe the server colluded with the customers—maybe let his friends eat and dine, then skip out without paying—the server is clearly liable.
Negligence is more of a judgment call. The server is not negligent, for example, while he or she were going to get the customer’s coffee, the diners dashed out the door and into the night. That could happen to anyone, particularly on a hectic night, or where there is outdoor seating. The server is not liable for the customers’ bad act (or the tab).
On the other hand, say that, instead of sneaky or fast customers, the server had a table where one-by-one, the customers filtered out the front door over time. In that instance, a server paying a reasonable amount of attention should have noticed that his or her table was drifting away and done something (i.e, tell the manager).
Or say that server disappears for an unreasonably long time—to call a significant other; to take a smoke break—and during that extended absence, the customers skip out without paying; that too, could give rise to liability. If the server was sufficiently—that is, unreasonably—careless, he or she can be responsible for the check.
Generally, it takes pretty egregious carelessness to support liability, and the vast majority of dine-and-dashes will not rise to this level, but it is worth bearing in mind that a sufficiently careless server could be liable for the meal.
How can the restaurant recover the dine and dash tab?
The answer is almost always not by deducting from the server’s pay (wages or tips). The law only allows an employer to withhold pay with employee consent or agreement (or if there is a valid court order, such as for wage garnishment).
The restaurant can ask the employee to pay via wage deductions; but if the employee refuses, the restaurant cannot simply take the money. Rather, their only legal option to recover the funds would be to sue the employee for the cost of the meal and prove in court that he or she was at fault in allowing the customers to escape without paying. As you can imagine, the approach generally is not cost effective.
Of course, there are other ways an employer may punish or take action against a server for the unpaid tabs of walkouts, should it believe an employee is costing it money. Employment in the United States being “employment at will,” The restaurant could terminate (fire) an employee who let customers walk out without paying. Or the restaurant could do anything “less than” or “short of” termination: suspension, cutting hours, giving the server less desirable shifts or tables, etc. The fact that it is difficult for the restaurant to get the money from the employee does not mean that there are no potential consequences for an employee/server.