Defendants accused of stealing tips from Kamloops, B.C., Denny's deny wrongdoing

The three men involved in a civil suit brought by the company behind a Kamloops, B.C., Denny’s restaurant — which claims tip stealing — are denying any wrongdoing.

Northland Properties Corporation claims in a Dec. 16 five-page civil suit that two employees schemed to illicitly move $11,000 from the restaurant’s electronic tip system. Further auditing uncovered another employee, a former manager, who allegedly took nearly $495,000 in tips over a two-year period.

None of the allegations have been proven in court.

The employees, Dhruv Rana, former supervisor Brandon Billy and former manager Rob Wiehe, “denies the facts” of the civil claim from Northland in a response filed in B.C. Supreme Court on Jan. 12.

The two-page response said, "Without admitting any of the allegations pleaded in the notice of civil claim, the defendant states that he is willing to engage in good-faith discussions toward a resolution of this matter, including potential settlement.”

The response to the civil claim was filed by Wiehe as a self-represented litigant; no lawyer is listed on the document. He has not responded to requests for comment by CBC News. 

The response from Wiehe also includes Rana and Billy’s names as defendants. CBC News has not been able to contact them.

Northland is seeking damages for theft, conversion, civil fraud, breach of employment duties, breach of contract and breach of fiduciary obligations.

The relief sought includes all the monies the suit claims were illegally taken by the three men. 

Wiehe’s response to the civil claim opposes the granting of the relief sought by Northland.

Restaurant owner, other workers baffled

The suit, which includes limited information about how exactly the tips meant for employees went missing from the Denny’s in Kamloops, has others in the local restaurant industry baffled.

“It’s a humongous number and I don’t know how it could happen,” said Steve Faraday, who co-owns several restaurants, including the Earls in Kamloops.

Upon hearing of the suit, he contacted his accounting team to ensure the system used to share tips left for his restaurant workers by customers paying with credit or debit was not at risk of fraud.

“There’s, like, no way,” he said he was assured. “It just can’t happen.”

He said the system Earls uses is off limits to management and owners.

Natalya Burnett, a server and manager with Kamloops' Mittz Kitchen, said while restaurant tip systems she is familiar with rely on an element of trust and could be abused, they are easily audited by employees.

“They can track their hours. You can look at sales,” she said. “I mean, it’s easy to check if there is money missing.”

Faraday said around 90 per cent of tips coming from customers in restaurants these days are through credit cards and debit cards. Restaurants have implemented electronic systems to manage those funds and then distribute them to workers in a timely and efficient manner.

Under B.C.’s Employment Standards Act it is illegal for an employer to withhold gratuities from an employee, make a deduction from them or require an employee to return or give the employee’s gratuities to the employer.

Mikkii Dewolf, the manager of Kamloops Art We Are Cafe said its tip system works by recording hours worked by employees per week. Tips collected are then divided by that for each employee’s portion.

“I feel that we’ve done it the old fashioned way for a while here,” she said. “I feel that it works pretty well.”

Restaurants also have systems where a portion of tips given to servers are shared with other workers in the business.

When asked if more stringent controls were needed to protect workers and prevent abuse, Dewolf said a robust system is still dependent on trust and good relationships between workers and management.

“I feel like if you are in a place where you don’t fully trust then I could see those issues appearing but I’m pretty confident here, so I don’t have that issue.

Jenson Leung, an employment lawyer with firm Kane Shannon Weiler LLP, said he was surprised to read of the civil suit brought by Denny’s involving alleged tip fraud.

“It's certainly not a common scenario,” he said. “I'd say what makes this particular case so eye-popping is mostly the amount.”

Leung said if tip fraud was to happen he would expect it in small amounts within systems not well monitored.

Time to review tipping systems?

He expects restaurants, especially larger ones to have safeguards in place, such as a technology or software that would flag unusually large payments, changes made to the system by employees or how they are being accessed.

“It seems like they essentially did not see the vulnerability until someone looked back and noticed,” he said about Denny’s case based on the limited information in the company’s notice of claim.

The claim alleges that Wiehe, which the suit describes as a former manager, requested a server share her tip system verification codes with him.

The employee “later indicated that she believed she was helping Mr. Wiehe with CPO [Cash Paid Out] repayments and did not fully understand how access to the tip-distribution platform operated,” claims the Northland civil suit.

Regardless of what the court decides in the case, Leung said it and the attention it is garnering should serve as a warning to businesses and employees to review and audit their tip systems carefully to check for possible abuse.

Kamloops RCMP have confirmed they are actively investigating the allegations of the Northland civil claim.