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A civil lawsuit filed in the Supreme Court of British Columbia accuses three Denny's workers of embezzling more than $500,000 in tips from the restaurant chain while working at a Kamloops restaurant between 2023 and 2025.
Kamloops RCMP confirmed they are actively investigating the allegations.
According to a statement from Northland Properties Corporation, the hospitality group behind Denny's in Canada, a recent audit found that $11,000 was illegally transferred from the restaurant's electronic tip system in a scheme involving two employees. A third employee is accused of inspiring the two by allegedly stealing more than $494,000 earlier.
The five-page notice of claim does not provide details about the scheme itself or exactly how the tip system was allegedly abused.
It says Denny's “maintains a digital tip distribution platform known as Tips Today, which is used to collect, store and distribute tips to employees.”
The lawsuit was filed on December 16 after the plaintiff discovered numerous unauthorized digital transfers from its electronic tips system between November 10 and December 1 to an account belonging to one of the defendants.
CBC News is not naming the three defendants in the lawsuit until it receives comment from them or their lawyer. None of the allegations were proven in court, and no response to the civil lawsuit was filed.
Northland says the first two employees it found passing on tips did so while working together. It says one person used the passcodes to get onto the tip platform and send money to a second person. According to the lawsuit, the man was supposed to keep some of the money for himself and then electronically transfer some of it back to the first man.
“Unjustly enriched”
According to Northland's lawsuit, during a meeting with one of the defendants, he said that the scheme copied that of another, former employee.
The lawsuit says a review of records shows the third defendant, who resigned Nov. 3, “may have embezzled approximately $494,533.01 between 2023 and 2025.”
Another former employee The Kamloops restaurant, which has no connection to the lawsuit, told CBC News that tips from customers went directly to the servers, while tips from credit cards or debit cards went into an online system and the servers received some sort of reward.credit card withh tips due to them on the card.
The lawsuit does not specify whether the amounts reported as misappropriated were intended to be transferred to other servers or how the funds might have been divided.
“At all material times, defendants owed plaintiff a duty of honor to honesty, fidelity, confidentiality, and lawful use of the employer's property and systems,” the lawsuit states. “The defendants violated these duties.
“Defendants unjustly enriched themselves by misappropriating funds belonging to plaintiff.”
Northland is seeking damages for theft, conversion, civil fraud, breach of employment, breach of contract and breach of fiduciary duty.
The compensation sought includes all the money the lawsuit alleges was illegally taken by the three men.
