On the morning of March 24, 2026, in a federal courthouse in Austin, Texas, United States District Judge Robert Pitman entered a final judgment that, by any reasonable measure, is one of the largest federal wage judgments ever entered against a Texas restaurant group. The defendants are Perry’s Restaurants Ltd., the parent company of the Perry’s Steakhouse and Grille chain, and Christopher V. Perry — the company’s owner — held personally and individually liable.
707 current and former servers who worked at Perry’s Steakhouse locations throughout Texas make up the plaintiff class. The verdict totals more than $21.2 million, plus costs and legal fees that will be calculated separately. The case, captioned Paschal v. Perry’s Restaurants Ltd., Case No. 1:22-CV-27-RP, has been working its way through the Western District of Texas since the original complaint was filed by Herrmann Law, PLLC, on January 11, 2022. After four years and a bench trial, the decision has been made. The ruling is harsh.
| Category | Detail |
|---|---|
| The Final Judgment | March 24, 2026 — United States District Judge Robert Pitman entered a final judgment exceeding $21.2 million in Paschal v. Perry’s Restaurants, Ltd., Case No. 1:22-CV-27-RP (W.D. Tex.); judgment entered jointly and severally against Perry’s Restaurants Ltd. d/b/a Perry’s Steakhouse and Grille and Christopher V. Perry, individually |
| Plaintiff Class | 707 current and former servers who worked at Perry’s Steakhouse locations across Texas; lead counsel Herrmann Law, PLLC; original lawsuit filed January 11, 2022 |
| Bench Trial Findings | November 10, 2025 — Court issued Findings of Fact and Conclusions of Law after bench trial; ruled that AM Bussers, AM Hosts, AM Server Assistants, AM Service Wells, and AM Food Runners were not “customarily and regularly tipped” employees; Court found Perry’s tip pool unlawful under the Fair Labor Standards Act |
| Willfulness Finding | Judge Pitman determined Perry’s FLSA violations were willful — meaning Perry’s either knew its tip pool was illegal or acted with reckless disregard; doubled the damages award and extended the limitations period from two to three years; finding partly informed by prior Department of Labor investigations against Perry’s |
| Parallel Colorado Ruling | Green v. Perry’s Restaurants Ltd., No. 21-cv-0023-WJM-NRN (D. Colo. Feb. 3, 2026) — U.S. District Judge William J. Martínez granted partial summary judgment to plaintiffs Lance Green and Anderson Khalid; ruled Perry’s distributed tip pool funds to AM employees in violation of FLSA tip credit provisions and Colorado state wage laws |
| The Tip-Pool Mechanics | Servers contributed 4.5% of all sales to a mandatory tip pool; pooled tips distributed weekly to hosts, food runners, bussers, server assistants, bartenders, and service well bartenders; Perry’s data analyst identified more than 3,400 instances where AM employees clocked in under tip share job codes before 2:00 PM and clocked out before 5:00 PM the same day |
| The New 2026 Lawsuit | January 8, 2026 — Herrmann Law filed a new federal collective action against Perry’s Steakhouse for the same alleged unlawful tip pool practices; eligible class includes anyone who worked as a server at Perry’s at any time since December 31, 2023; consent forms and information at PerrysSteakhouseLawsuit.com |
| Perry’s Response | Chief Operating Officer Rick Henderson issued statement: Perry’s “respect[s] and value[s] their employees and strongly disagree[s] with the recent filings”; the company indicates it will continue to vigorously defend its position; Perry’s has not yet announced whether it plans to appeal the March 24 final judgment |
Anyone who has worked in a tipped restaurant can probably sum up the case’s legal basis in three terms. Restaurants are permitted by the Fair Labor Standards Act to pay tipped employees a “subminimum” cash rate, which can be as low as $2.13 per hour federally, provided that the employees retain all tips or only give them to other employees who are “customarily and regularly tipped.” Servers were required to donate 4.5% of their revenues to Perry’s mandated tip pool. Hosts, food runners, bussers, server assistants, bartenders, and service well bartenders were among the other staff members assigned “tip share job codes” to receive the pooled gratuities on a weekly basis.
The problem, the court found after a full bench trial, was that some of those tip-pool recipients did not actually qualify as customarily and regularly tipped under federal law. Specifically, employees who clocked in under AM job codes — AM Bussers, AM Hosts, AM Server Assistants, AM Service Wells, AM Food Runners — were working morning shifts when the restaurant was effectively closed to guests, and were therefore receiving tip-pool money for shifts during which they had no meaningful customer interaction.
The data analyst evidence presented at trial documented more than 3,400 instances where AM employees clocked in under tip-share job codes before 2:00 PM and clocked out before 5:00 PM on the same day, excluding Friday and holiday lunch shifts. Judge Pitman’s November 10, 2025 Findings of Fact ruling addressed this directly. The court determined that Perry’s tip pool was illegal, that the FLSA breaches were deliberate (i.e.,
Perry’s either knew the tip pool was illegal or acted with reckless disregard), and that the damages period was extended from two to three years. The damages were increased by the willfulness finding. It is rarely made in FLSA cases without a strong evidentiary basis, and the Court in this instance had one: a recorded history of previous Department of Labor investigations into Perry’s, previous litigation pertaining to tips, and an internal understanding of the pertinent FLSA framework within the corporation.
There are other rulings besides the Texas one. U.S. District Judge William J. Martínez granted partial summary judgment to plaintiffs Lance Green and Anderson Khalid on February 3, 2026, in the parallel case Green v. Perry’s Restaurants Ltd. in the District of Colorado. The judge concluded that Perry’s distribution of tip pool funds to AM employees violated both Colorado state wage laws and the FLSA tip credit provisions.
Judge Martínez was adamant that “as a matter of law and logic, employees who work morning shifts at a restaurant while it is closed to guests cannot have more than de minimis customer interaction sufficient to qualify them as customarily and regularly tipped employees.” Although the Colorado ruling is not precedential outside of its district, the legal reasoning is nearly identical to the Texas trial findings.
Perry has responded to all of this with the kind of disciplined corporate defense that most businesses use when they are exposed to nine-figure risks. Perry’s will continue to forcefully defend its stance, according to Chief Operating Officer Rick Henderson, who said the company respects and cherishes its employees and vehemently disagrees with the recent filings. It is yet unclear if Perry will appeal the March 24 final ruling.
The new collective action that Herrmann Law filed on January 8, 2026, encompassing servers who have worked at any Perry’s Steakhouse since December 31, 2023, is no longer pending. It is a separate lawsuit that alleges the same illegal practices that the courts have now twice determined violate federal wage law.
As this litigation progresses, it seems likely that the Perry case will be included for years in employment-law training programs for restaurants. The lesson is fairly simple. Tip pools are permitted. The makeup of tip pools is strictly controlled. Furthermore, the ultimate cost of being incorrect is real when a restaurant operates one for years in defiance of official federal guidelines.
