HOUSTON — A federal judge has ordered Houston-based Perry’s Steakhouse & Grille to pay over $21 million following a lawsuit over an illegal tip pool, marking a major legal setback for the restaurant chain.
U.S. District Judge Robert Pitman ruled Tuesday in favor of the plaintiffs, approving their proposed damages. The breakdown of the judgment includes:
- $3.44 million in unpaid wages, plus an equal amount in legal penalties
- $7.07 million in misappropriated tips, plus an equal amount in legal penalties
- $263,476 in payroll taxes
The total does not yet include interest or attorney fees.
The lawsuit, filed in 2022 by 750 servers across Perry’s Texas locations, alleged that the company took a portion of employees’ tips each week and placed them in a mandatory tip pool that was then distributed to staff who don’t typically receive tips. Plaintiffs argued this violated the Fair Labor Standards Act, which prohibits employers from using employee tips for purposes other than those explicitly allowed by law.
Perry’s attorneys argued the tip pool was legal and intended to equalize pay between morning and evening staff. Judge Pitman rejected that argument in November 2025 and reaffirmed the damages Tuesday, denying the chain’s request for a reduction.
In a statement Friday, Perry’s COO Rick Henderson said the company plans to appeal: “We respectfully disagree with the trial court’s decision. We will continue the judicial process with an appeal to the Fifth Circuit Court of Appeals and are confident the appellate process will provide a full and fair review. Perry’s Restaurants is a respected brand committed to treating employees fairly and maintaining transparent, lawful compensation practices that are commonplace in the industry. Our team members are at the heart of everything we do, and that commitment continues as we move forward.”
