Judge hits Texas steakhouse with $21M judgment for illegal tip pool
Chron • • business
Key Points:
- A federal judge ordered Perry's Steakhouse & Grille, a Houston-area chain, to pay over $21 million for operating an illegal tip pool, including unpaid wages, misappropriated tips, legal penalties, and payroll taxes.
- The lawsuit involved 750 servers who claimed Perry's pooled their tips to pay non-tipped staff, violating the Fair Labor Standards Act which prohibits employers from keeping employee tips.
- Perry's argued the tip pool was legal and intended to equalize pay between morning and evening shifts, but Judge Robert Pitman rejected this defense and upheld the damages in November 2025 and again on Tuesday.
- Perry’s COO Rick Henderson stated the company disagrees with the ruling and plans to appeal to the Fifth Circuit Court of Appeals, emphasizing their commitment to lawful compensation and employee fairness.
- The total $21 million judgment does not include additional interest and attorney fees, and the legal process is ongoing.
