Will Darden Restaurants (DRI) Stock Be Impacted After Judge Dismisses Customer's Lawsuit?

NEW YORK (TheStreet) -- Darden Restaurants Inc. (DRI) won their motion in court on Thursday when a Manhattan U.S District Judge dismissed a lawsuit brought against the parent company of the Red Lobster and Olive Garden restaurants, alleging the company overcharged for tips.

The lawsuit suggested Darden's restaurants were illegally adding an 18% tip to customers' bills, CNBC reported.

The plaintiff claimed it was "deceptive" for Darden to impose a mandatory tip, when such an action is usually voluntary.

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The judge dismissed the case saying the 18% tip is clearly stated on the company's menus, which gives diners the opportunity to leave the restaurant if they don't want to have it added to their checks.

Shares of Darden Restaurants are lower by -0.96% to $44.33 at the start of trading on Friday.

Separately, TheStreet Ratings team rates DARDEN RESTAURANTS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate DARDEN RESTAURANTS INC (DRI) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its reasonable valuation levels, considering its current price compared to earnings, book value and other measures. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."

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