Consumer Protection Law
Jul. 13, 2026
Service charges under fire: Navigating a new wave of hospitality litigation
Hospitality businesses are facing growing legal exposure over service charges as courts, regulators and consumers increasingly scrutinize whether mandatory fees are clearly disclosed, properly characterized and consistently applied.
Amanda K. Monroe
Partner and Labor and Employment Practice Group Leader
Michelman & Robinson
Phone: (310) 299-5500
Email: amonroe@mrllp.com
Service charges were never intended to become one of the hospitality industry's most litigated issues. For decades, hotels, restaurants, caterers and event operators have relied on mandatory service charges--particularly in banquet and group settings--to standardize pricing, offset labor costs and reduce the uncertainty inherent in discretionary tipping. What began as an operational convenience has evolved into a significant source of legal risk.
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