It happened just before 6:00 Wednesday evening at Brint's Diner near Lincoln & Oliver.
Workers at the diner say they confronted the man after they saw him taking tips from tables. The man grabbed a butter knife and approached one employee.
No one was hurt, and customers and employees pushed the man out of the restaurant then held the door to keep him from coming back inside.
Officers caught up with the 20-year-old man, who said he was just playing around with employees. Officers arrested him and booked him on aggravated assault charges.