Lawsuit alleges 3 Denny’s workers in Kamloops, B.C., misappropriated $500K in tips

A civil suit filed in the Supreme Court of B.C. accuses three Denny's workers of misappropriating more than $500,000 in tips from the restaurant chain while working at a Kamloops location between 2023 and 2025.

Kamloops RCMP have confirmed they are actively investigating the allegations.

According to the claim from Northland Properties Corporation — the hospitality group behind Denny’s in Canada — a recent audit discovered $11,000 had been illicitly moved from the restaurant’s electronic tip system in a scheme involving two employees. A third employee is accused of inspiring those two by allegedly previously stealing more than $494,000.

The five-page notice of claim does not offer many details about the scheme itself or how exactly the tipping system was allegedly abused.

It says Denny’s “maintains a digital tip distribution platform known as Tips Today, used to collect, hold, and distribute funds to employees.”

The suit was filed on Dec. 16 after the plaintiff discovered multiple unauthorized digital transfers from its electronic tips system, between Nov. 10 and Dec. 1, to an account belonging to one of the defendants.

CBC News is not naming the three defendants in the suit until it is able to seek comment from them or their lawyer. None of the allegations have been proven in court and no response to the civil claim has been filed.

Northland claims the first two employees it discovered transferring tips did it by working together. It says one man would use access codes to get onto the tip platform and send money to the second man. That man, according to the suit, would keep some money for himself and then e-transfer a portion back to the first man.

‘Unjustly enriched’

During a meeting with one of the defendants, the Northland claim says, he divulged that the scheme was replicating that of another, former employee.

The suit says a review of records indicate that third defendant, who resigned on Nov. 3, “may have misappropriated approximately $494,533.01 between 2023 and 2025.”

Another former employee of the Kamloops restaurant, who has no connection to the lawsuit, told CBC News that cash tips from diners went directly to servers, while credit card or debit ones went into the online system and servers would receive a kind of credit card with the tips owed to them on the card.

The suit does not specify if the amounts listed as misappropriated were meant to be shared with other servers or how those funds may have been divided up.

“At all material times, the defendants owed the plaintiff duties of honesty, fidelity, confidentiality, and lawful use of employer property and systems,” says the suit. “The defendants breached those duties.

“The defendants were unjustly enriched through the misappropriation of funds belonging to the plaintiff.”

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.