Steakhouse Ordered to Pay Servers $21M Over Tips

Perry's Steakhouse & Grille faces a $21 million judgment for wrongful tip pooling practices, according to documents obtained on March 24, 2026. Over 700 servers who worked at the chain's Texas locations between 2019 and 2022 were awarded back wages and damages.

The lawsuit alleged that servers, paid an hourly wage of $2.13, were mandated to contribute approximately a quarter of their tips to a pool. This pool was used to pay other staff, including employees working before the restaurant opened, which allegedly violates labor regulations.

The Department of Labor states employees tipped at a reduced rate must still earn the minimum wage of $7.25 per hour through combined tips and wages. Federal regulations permit tip pools only for employees who customarily and regularly receive tips.

Perry's Restaurants' Chief Operating Officer, Rick Henderson, announced the company's intention to appeal the judgment, stating they respectfully disagree and are confident in the appellate process. He emphasized the brand's commitment to fair employee treatment.

Legal representatives for the plaintiffs hailed the judgment as incredible, highlighting that such practices are not commonplace industry standards, despite the company's claims. They expressed commitment to supporting clients throughout the appeal process.