A federal judge has ordered Perry's Steakhouse & Grille to pay more than $21 million to over 700 former and current servers after finding the restaurant chain used an unlawful tip-pooling system that diverted money to employees who were not legally eligible to receive tips.
The ruling stems from a lawsuit involving workers at Perry’s Texas locations between 2019 and 2022. According to the judgment, which was obtained by People, servers earning the tipped minimum wage of $2.13 an hour were required to contribute roughly 25 percent of their tips into a shared pool each week.
That money was then distributed to other staff members, including workers who performed duties before the restaurant opened and who did not regularly interact with customers.
The court awarded more than $3.4 million in unpaid minimum wages, approximately $7 million in improperly distributed tips, and more than $10.5 million in damages.
The decision lands at a difficult moment for Perry’s, a company that built its reputation on upscale dining and its famous pork chop lunch special. The chain traces its roots back to 1979, when the Perry family opened Perry’s Butcher Shop and Deli in Houston.
By 1993, Chris Perry had expanded the business into Perry’s Steakhouse & Grille, which now operates restaurants in cities including Denver, Chicago, Miami, Nashville, Raleigh, Birmingham, and throughout Texas.
Even as the company grew into one of the country’s best-known steakhouse brands, the court noted that Perry’s has been involved in Fair Labor Standards Act litigation for years.
Perry’s says it plans to fight the ruling. Rick Henderson, the company’s chief operating officer, said in a statement that the chain “respectfully disagree[s] with the trial court’s decision” and will appeal to the Fifth Circuit Court of Appeals.
Henderson also said Perry’s remains “committed to treating employees fairly” and described its compensation practices as common within the restaurant industry.
The plaintiffs’ attorneys sharply rejected that argument. Pamela Hermann, who represented the servers, said the size of the judgment reflected how long the practice had continued unchecked.
“It’s just astonishing that for this long of a time, [Perry’s has] been able to just [say], ‘oh, it’s normal. It’s normal.’ It’s not,” Hermann told People.
She added that workers should question pay practices that seem unfair because “there are people out there that are willing to help.”
Federal law allows restaurants to pay tipped workers less than the standard minimum wage only if their tips make up the difference and only if those tips are shared with employees who “customarily and regularly receive tips.”
In this case, the judge found that Perry’s failed to prove its morning bussers and other pre-opening staff qualified under that standard.
The court also pointed to evidence that the company had faced similar labor complaints since 2009, including a prior case involving tip-sharing and employee uniforms.
