What Is The CCG Denver Restaurant Service Charge Lawsuit About?

In Denver, a contentious lawsuit has been filed against Culinary Creative Group (CCG), a prominent restaurant group, by several former employees. At issue is a 20 % service charge automatically added to customer bills at CCG establishments — how that charge is disclosed, where the money goes, how it affects wages, and whether state laws have been violated.

For customers, workers, and the restaurant sector, the lawsuit raises serious questions about transparency, wage law, and fair treatment.

In this article, I will talk about the following things:

• Who is Culinary Creative Group, and what work do they do?
• The terms related to the Denver Restaurant Service Charge.
• Major allegations in the Denver Restaurant Service Charge lawsuit.
• CCG’s response to the lawsuit.

So, if these are some of the things that you need to know about, keep on reading this blog till the end…

Who Is CCG And What Happened?

Culinary Creative Group operates several of Denver’s trendier restaurants, including Kumoya, Tap & Burger, Fox and the Hen, Mister Oso, Forget Me Not, and others.

As CBS News Colorado reports, workers in Denver eateries are suing a cluster of restaurants in their town, saying that out of the automatically added 20% service charge, 30% went to management without their knowledge.

CCG has for some time charged customers an automatic 20 % service fee on all guest checks (bills), in addition to giving a separate line for discretionary tips. According to Denverite, the company’s stated policy is that the service fee is “distributed equitably among staff,” which includes both front-of-house (servers, bar staff) and back-of-house (kitchen) employees.

In early 2024, and in subsequent months, some employees began raising concerns. They allege that the service charge funds were not fully or fairly shared as promised.

Specifically, the lawsuit claims that ~30 % of the service charge monies have been diverted to management (rather than all “staff” as suggested) and that the base wages for certain front‐of‐house employees were reduced, effectively shifting more compensation burden onto the service fee/tips.

Additionally, the coworkers claim a lack of transparency about how the fees were calculated and distributed, and that rest breaks mandated under law were not always given.

What Are The Legal Definitions You Need To Know Under The Colorado Law?

To understand the lawsuit, it’s essential to know how Colorado law treats tips, service charges, and wage requirements. Here are some of the things that you need to know:

• Under Colorado’s wage law (INFO #3C: Tips (Gratuities) and Tipped Employees), a tip is defined as a voluntary payment from a customer above what is required, and is entirely controlled by the customer.
• By contrast, a mandatory service charge (also called a service fee) is not voluntary. Because it is automatically added, customers do not have the discretion whether or not to pay it. Under Colorado law, service charges are not “tips.” They are part of the cost of service or goods.
• Employers are allowed to use service charges to compensate employees, but those amounts are treated as wages/compensation rather than tips, for purposes of the minimum wage law. A service charge cannot be used as a “tip credit” to reduce an employer’s obligation for minimum wage if the law requires full minimum wage or a certain tipped wage.

Also, Colorado’s law provides that employers cannot keep tips or service amounts promised to employees under some representation if those were misled, or redirect them improperly (e.g., to ineligible employees or management) without proper disclosure.

What Are The Major Allegations In The Denver Restaurant Service Charge Lawsuit?

According to CBS News, “the group is facing claims from employees that it violated Colorado wage and hour laws in a recently filed lawsuit.” Here are some of the major allegations of the lawsuit that you need to know about:

Misrepresentation To Customers And Staff

Employees assert that CCG has advertised the service fee as being equitably distributed to “staff,” which gives the impression that those fees are going fully to servers, kitchen staff, etc. In reality, the suit claims, ~30 % or so is going to management.

Reduction Of Base Pay / Tipping Wage Issues

In January 2024, front-of-house employees say their base pay (hourly wages) was lowered to the tipped minimum wage. According to Moneywise, the tipping regulations that the Labour Department of Colorado provides, “Direct wages can be less than full minimum wage by up to $3.02, an amount that’s called the employer’s ‘tip credit.”

When service charges are treated more like wages, this becomes significant. That’s because workers argue that the change, combined with the misdistribution of service fee funds, left them earning less than expected under earlier representations.

Rest Breaks And Unpaid Wages

The lawsuit also claims that employees were not always allowed their legally mandated breaks (rest periods), and that wages owed for those missed breaks or duties were not paid. 

Lack Of Transparency

One of the core contentions is that neither customers nor employees were given sufficient detail on how the 20% service charge was split: how much goes to front vs back of house, how much (if any) goes to management, etc. Employees say this opacity prevented them from assessing whether they were being fairly compensated.

Read Also: Do You Understand the Terms in Your Employment Contract

How Did CCG Respond To The Allegations?

CCG denies wrongdoing. According to Moneywise, they mentioned that the service fee is clearly labeled as a “service fee” on guest checks, separate from voluntary tips.

Additionally, they state that their menu and checks include disclosures that the 20% service fee will be distributed among staff. Managers are part of “staff” in CCG’s view. Thus, Denverite reports, manager pay from service charges is defended as lawful.

Apart from that, they also assert that they have never misappropriated tips and that any service fee funds are distributed appropriately. CCG disputes the claim that 30 % of the service fee goes to management. As per what CBS has reported, the company has said that, in fact, the portion going to management is much lower (around 10 %) at certain restaurants. 

What Are The Potential Outcomes Of The Denver Restaurant Service Charge Lawsuit?

The trend toward automatic service fees is growing in the restaurant industry nationwide. Some view them as a way to more fairly share revenue with kitchen staff, which historically get fewer tips; others worry about the lack of clarity and possible unfair employer practices.

Here are some of the things that might happen depending on how the case gets resolved:

• If employees succeed, there could be an award of unpaid wages (for misallocation of service fees, rest breaks, etc.), possibly also damages, penalties, and attorneys’ fees.
• It could force CCG (and similar restaurant groups) to change how service fees are disclosed, how money is split, and avoid using service fees in ways that reduce base wages improperly.
• The case may set a precedent: Clarify how mandatory service charges must be treated under Colorado law, possibly influencing enforcement or new regulations.
• Even if the lawsuit settles, it might prompt regulators (e.g., Colorado Department of Labor & Employment, CDLE) to revisit interpretive guidance or enforcement around service fees, tip pooling, and wage law. 

Read Also: Smoothstack Lawsuit: Beware of Unlawful Wage Scheme and Employment Contracts

What Is The Current Status Of The Denver Restaurant Service Charge Lawsuit?

The CCG Denver service charge lawsuit brings into focus how restaurants label, disclose, and distribute mandatory service fees. And how those practices intersect with wage and tip laws in Colorado.

As of the latest reports, the lawsuit is ongoing. Some portions (e.g., claims for unpaid wages or rest breaks) may be under mediation or negotiation. However, according to Moneywise, formal legal proceedings are in motion.

Enforcement by state agencies might also become involved if CDLE finds systemic violations. According to Littler Mendelson P.C., the new or upcoming changes in Colorado law (including enforcement penalties) could also affect the case’s outcome.

For workers, it raises questions of fair pay, transparency, and legal protection. For diners, it underscores the importance of understanding what restaurants are charging you for. And whether your money is doing what you believe it is.

The outcome of this case may reshape how diners use service fees. It might also change the way the hospitality industry regulates these in Denver and beyond.