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Short Summary
A Denver server's lawsuit against Culinary Creative Group over its 20% mandatory service charge was dismissed in March 2026 and moved to binding arbitration, after both sides agreed on a proposed legal standard for how such charges must be disclosed. The case never produced a court finding of wrongdoing. Colorado's new statewide fee-disclosure law, effective January 1, 2026, now sets the baseline rules restaurants statewide must follow when adding mandatory charges to a bill.
The Denver restaurant service charge lawsuit that drew national attention involved server Marianna White and the Culinary Creative Group (CCG), owner of Kumoya, Tap & Burger, Bar Dough, and other popular Denver restaurants. White alleged CCG's automatic 20% service charge was misrepresented to customers and employees, and the case was formally dismissed in March 2026 after both sides agreed to resolve the dispute in binding arbitration. Below is what the lawsuit actually alleged, what Colorado law says about mandatory service charges, and what to do if you believe you have been affected.
Key Takeaways
• The core Denver restaurant service charge lawsuit, White v. Culinary Creative Group, Inc. (Case No. 2025CV30630, Denver District Court), was filed on February 19, 2025, and dismissed in March 2026 after moving to arbitration.
• The lawsuit alleged CCG's 20% mandatory service charge was marketed as going to "staff," while roughly 30% of the charge allegedly went to management instead.
• The case ended without any court finding of misconduct against CCG; both parties jointly agreed to dismiss it and pursue the dispute privately.
• Mandatory restaurant service charges remain legal in Denver and across Colorado. They are not classified as tips, and businesses may direct them to management unless they explicitly promise otherwise.
• Colorado's House Bill 25-1090 (C.R.S. § 6-1-737), effective January 1, 2026, now requires restaurants statewide to clearly disclose the amount and distribution of any mandatory service charge.
• No refund program, settlement fund, or class action has been publicly announced for CCG customers or workers as of this writing; the underlying dispute is proceeding through confidential arbitration.
What Is the Denver Restaurant Service Charge Lawsuit About?
The case most people mean when they search for a Denver restaurant service charge lawsuit is White v. Culinary Creative Group, Inc., filed February 19, 2025 in Denver District Court under Case No. 2025CV30630, before Judge Sarah B. Wallace. Plaintiff Marianna White, a former server at CCG's high-concept Japanese restaurant Kumoya in the LoHi neighborhood, filed suit through HKM Employment Attorneys LLP (attorneys Adam M. Harrison and Cynthia J. Sánchez).
White's complaint alleged violations of the Colorado Wage Act (C.R.S. § 8-4-101 et seq.) and the Colorado Minimum Wage Act (C.R.S. § 8-6-101 et seq.). It centered on CCG's automatic 20% service charge, which CCG's menus described as "distributed to staff in an equitable manner." The suit claimed roughly 30% of that charge was instead paid to management, and that in January 2024, CCG cut front-of-house employees' direct hourly wages by about $3 per hour, shifting them onto the lower tipped minimum wage. White's complaint also alleged CCG failed to provide state-mandated paid rest breaks.
Other former CCG staff, including Faith Lindstrom and Hailey Jamieson, publicly described similar experiences at CCG-owned restaurants such as Fox and the Hen, though they were not named plaintiffs in the White complaint. CCG operates more than a dozen Denver dining concepts, among them Kumoya, Tap & Burger, Bar Dough, Señor Bear, Forget Me Not, Mister Oso, and Ash'Kara.
Why Are Denver Restaurants Facing Service Charge Lawsuits?
Mandatory service charges have spread across Denver's restaurant scene as owners look for a way to raise back-of-house pay without raising menu prices outright. Casa Bonita, for example, adds a 15% surcharge on top of its admission cost. Supporters say the model lets dishwashers, line cooks, and other non-tipped staff share in revenue traditionally reserved for servers and bartenders.
The model has also drawn resistance. Colorado Restaurant Association CEO Sonia Riggs has said that in some cases, adopting a service charge led restaurants to lose the large majority of their front-of-house staff, as tipping dropped once customers assumed the charge already covered gratuity. Because Colorado law treats a mandatory service charge as separate from a voluntary tip, workers who expected tip-level income have increasingly turned to wage-and-hour lawsuits when they believe the charge was not distributed the way it was advertised.
Restaurant Service Charge vs. Tip in Colorado
Colorado law draws a sharp legal line between a tip and a service charge, and that distinction was central to the CCG dispute. Under the Colorado Department of Labor and Employment's INFO #3C guidance, a tip is a voluntary payment above the required bill amount, and the customer alone decides whether to leave one and how much.
A mandatory service charge is different: it is set by the business, added automatically, and not optional for the customer. Colorado law does not treat it as a tip, even if a restaurant calls it a "gratuity" or "hospitality fee." If a business chooses to pass service-charge money to staff, that money is legally treated as wages, not tips, meaning it is subject to payroll tax withholding and must be included in overtime calculations.
Critically, current state guidance allows employers to direct service-charge funds to management, unlike tips, which by law belong entirely to employees. CCG's legal position rested on this rule; White's suit argued CCG's marketing language promised something narrower than what the law technically permitted.
Critically, current state guidance allows employers to direct service-charge funds to management, unlike tips, which by law belong entirely to employees. CCG's legal position rested on this rule; White's suit argued CCG's marketing language promised something narrower than what the law technically permitted.
Is a Restaurant Service Charge Legal in Denver? Can Restaurants Add Mandatory Service Charges in Colorado?
Yes. Mandatory service charges are legal in Denver and across Colorado. Neither the city nor the state bans restaurants from adding an automatic charge to a bill, and Colorado has not adopted the kind of presumption used in some other states, where an undisclosed automatic fee is treated as belonging entirely to employees by default.
What Colorado law regulates is disclosure, not the existence of the fee itself. A restaurant must clearly explain, before the customer pays, that a charge is mandatory, how much it is, and in general terms, where the money goes. Failing to disclose this, or misrepresenting how the money is distributed, is what exposes a restaurant to wage-and-hour claims from employees and, since January 2026, deceptive-pricing claims from customers.
Denver Restaurant Fee Transparency Laws
The most significant recent change for Denver diners is House Bill 25-1090, Colorado's "Protections Against Deceptive Pricing Practices" law, which added a new section, C.R.S. § 6-1-737, to the Colorado Consumer Protection Act. The law took effect January 1, 2026, and applies statewide, not just in Denver.
For food and beverage establishments, the law does not ban mandatory service charges. Instead, restaurants can comply by clearly disclosing the amount or percentage of any mandatory service charge, explaining how it is distributed, and, under one compliance path negotiated by the Colorado Restaurant Association, distributing mandatory charges exclusively to non-managerial employees. Disclosure must appear wherever pricing is communicated, including menus, receipts, phone orders, and online ordering platforms.
Violations are treated as deceptive, unfair, or unconscionable acts under the Colorado Consumer Protection Act. A consumer who believes a mandatory fee was not properly disclosed can send the business a written demand for reimbursement; if the business does not correct the issue within 14 days, the consumer may sue to recover the illegally charged fees, actual damages, and attorney's fees. As of early 2026, the Colorado Attorney General's Office confirmed it had begun receiving junk-fee complaints under the new law, though it has not publicly disclosed complaint volume or specific case counts. It's worth noting that HB 25-1090 postdates the CCG lawsuit and was not the statute White's complaint was filed under; her case relied on existing Colorado wage law.
Current Status of the Denver Restaurant Service Charge Lawsuit (as of July 2026)
Here is the verified timeline based on court filings and contemporaneous news coverage:
• February 19, 2025: Marianna White files her complaint in Denver District Court, Case No. 2025CV30630, assigned to Judge Sarah B. Wallace.
• Spring 2025: The case is publicly reported and CCG founder Juan Padró defends the service-charge model, stating it allows back-of-house staff to "participate in the upside" of the restaurants.
• 2025: The case is stayed while White's attorneys challenge the enforceability of CCG's mandatory employee arbitration agreements.
• January 1, 2026: HB 25-1090's statewide fee-disclosure requirements take effect, separate from and not retroactive to the CCG case.
• March 2026: CCG names Richard Flaherty, former head of Punch Bowl Social, as its new CEO; founder Juan Padró moves into an ownership and advisory role.
• March 20-25, 2026: White and CCG jointly file to dismiss the lawsuit. Judge Wallace dismisses the case without ruling on the merits, citing a possible lack of jurisdiction to issue the legal determination White had requested. The dispute moves to binding arbitration.
Notably, court filings show both sides agreed on a proposed three-part standard for a lawful service charge going forward: the charge must be mandatory and non-removable on request, the employer must clearly communicate to customers and staff that it is not a tip, and the employer cannot use the charge to justify a lower "tip credit" wage. CCG's attorneys agreed the company met that standard as of March 2026, though the court did not formally adopt it as binding legal precedent.
Separately, a federal unfair-labor-practice charge involving Culinary Creative Group, Inc. was also filed with the National Labor Relations Board (Case No. 27-CA-366023). Details of that filing are not fully public, and its outcome should not be assumed to be connected to or resolved by the White arbitration.
As of this writing, no settlement amount, refund program, or class action has been publicly disclosed in connection with the CCG dispute. Because the matter is now in private, binding arbitration, any resolution reached may not be publicly reported at all.
Who May Be Affected by Denver Restaurant Service Charges?
Two distinct groups may be affected by this issue:
• Current and former hourly employees, particularly servers, bartenders, and hosts, who worked at CCG restaurants under the 20% service charge policy, especially between 2023 and early 2026.
• Diners who paid a mandatory service charge without a clear, upfront explanation of how much it was or how the money would be used.
• More broadly, any Colorado restaurant customer or worker who has encountered an undisclosed mandatory fee at any establishment, not just CCG locations, is now covered by the statewide protections in HB 25-1090.
What to Do If You Believe You Were Affected
This section is general information, not personalized legal advice. If you think you may have a claim related to a restaurant service charge in Colorado, consider the following steps:
• Keep documentation. Save receipts, menus, or photos showing how a service charge was described and disclosed at the time of your visit or employment.
• For employees: request copies of pay stubs or wage statements that show how service-charge distributions were calculated, and keep notes on any denied meal or rest breaks, including dates.
• For consumers: if a mandatory fee was not clearly disclosed before you paid, you may send the business a written demand for reimbursement under C.R.S. § 6-1-737. The business has 14 days to resolve the issue before you can pursue a claim for the fee, damages, and attorney's fees.
• File a complaint. Consumers can contact the Colorado Attorney General's Office; workers with wage concerns can contact the Colorado Department of Labor and Employment's Division of Labor Standards and Statistics.
• Consult an attorney. An employment attorney or a consumer-protection attorney can evaluate whether your specific situation may support an individual claim; eligibility depends on facts this article cannot assess for you.
Frequently Asked Questions
Denver restaurant hidden service fee lawsuit explained
The term generally refers to White v. Culinary Creative Group, Inc. (Case No. 2025CV30630), in which a former server alleged CCG's 20% mandatory service charge was described as going to "staff" while roughly 30% allegedly went to management. The lawsuit was dismissed in March 2026 without a court finding against CCG and moved to private, binding arbitration.
Can restaurants add mandatory service charges in Colorado?
Yes. Colorado law permits restaurants to add mandatory service charges to a bill. These charges are legally distinct from tips and, under current state guidance, can be distributed at the business's discretion, including to management, as long as the charge and its purpose are clearly disclosed to customers before payment.
How to dispute restaurant service charges
If you believe a mandatory service charge was not properly disclosed, you can request an itemized explanation from the restaurant directly, and if the business is unresponsive, send a written demand for reimbursement under Colorado's HB 25-1090 (C.R.S. § 6-1-737). If the business does not resolve the issue within 14 days, you may be eligible to pursue a claim for the fee, damages, and attorney's fees. Employees who believe wages were mishandled can file a wage complaint with the Colorado Department of Labor and Employment.
Consumer rights for restaurant service charges
Colorado consumers have the right to know, before paying, whether a service charge is mandatory, how much it is, and generally how it will be used. Under C.R.S. § 6-1-737, effective January 1, 2026, failing to disclose this clearly can be treated as a deceptive trade practice, giving consumers a path to demand reimbursement and, if unresolved, pursue a legal claim.
Denver restaurant pricing and service fee regulations
Denver restaurants are governed primarily by Colorado state law rather than a separate Denver-specific pricing ordinance. As of January 1, 2026, HB 25-1090 requires restaurants statewide, including in Denver, to disclose mandatory service charges clearly across menus, receipts, phone orders, and online platforms, and to explain how the charge is distributed between staff and management.
Sources
1. Andrew Kenney, "Where is that restaurant 'service charge' going? Not where you think, a lawsuit says," Denverite, March 19, 2025.
2. Andrew Kenney, "Lawsuit about Denver restaurants' service charges dismissed, moves to arbitration," Denverite, March 25, 2026.
3. CBS News Colorado, "Denver restaurant group faces lawsuit from former employees over 20% service charge misuse," April 2025.
4. Legal Reader, "Colorado Waitress Claims Local Company Gives Service Charge to Management," April 2025.
5. Denver District Court, City and County of Denver, Colorado — Docket for White v. Culinary Creative Group, Inc., Case No. 2025CV30630 (complaint and summons filed February 19, 2025; case dismissed March 2026), accessed via Trellis.law.
Disclaimer: This article provides general information about a matter of public legal record and is not legal advice. Facts are drawn from court filings and news coverage cited above; where a specific figure could not be independently verified, this article says so rather than estimating.
Disclaimer: This article provides general information about a matter of public legal record and is not legal advice. Facts are drawn from court filings and news coverage cited above; where a specific figure could not be independently verified, this article says so rather than estimating.