Lexington restaurant chain agrees to pay millions for tip and wage theft class action
Some of Lexington’s most-prominent restaurants agreed to settle a class-action lawsuit alleging tip-and-wage theft from employees, court documents show.
After “arms-length negotiations” between Bluegrass Hospitality Group and several former and current employees, the company agreed to pay $9 million.
Bluegrass Hospitality Group (BHG) owns notable Lexington restaurants including Malone’s, Malone’s Prime Events & Receptions, Harry’s, Aqua Sushi, Drake’s and OBC Kitchen.
Three employees from Kentucky BHG locations were listed in the class action. Overall, the lawsuit includes employees from Kentucky, Missouri, Tennessee, North Carolina, Alabama and Illinois.
The original lawsuit was filed by the Kentucky employees in state federal court in June 2024. The settlement agreement was established in early February.
“At Bluegrass Hospitality Group, there is nothing more important than providing a workplace where team members are treated and feel like family,” attorneys for the group said in a statement.
“The foundation of our organization is built on our people, who are deeply cared for, fairly treated and appropriately compensated. The decision to settle was made allowing our team to move forward while continuing to focus on providing a positive environment for team members and guests alike.”
According to court documents, Bluegrass Hospitality Group agreed to pay attorney fees and costs for the plaintiffs.
David Garrison, one of the attorneys for the plaintiffs, did not immediately provide comment.
What the suit alleges
In the latest lawsuit, three plaintiffs were former workers at Malone’s locations in Hamburg and Palomar centers. Another worked at the Drake’s location in Owensboro.
The lawsuit claims the company violated the Fair Labor Standards Act and Kentucky Wages and Hours Act by not providing servers and bartenders with the legally required notice regarding the use of a tip credit toward their wages.
The complaint explains the restaurants owned by BHG compensated its employees below the federal minimum wage while requiring them to perform non-tipped duties for more than 20% of their work week.
Some of these duties include sweeping, mopping, rolling silverware and other side work where employees are not being tipped.
Federal law prohibits employers from taking a tip credit when an employee performs tip-supporting work and non-tip generating duties for more than 20% of their work week.
According to the suit, bartenders and servers are required to work for nearly an hour to set up and close the restaurants, clean and prepare tables and organize their sections.
The employees also were required to contribute their tips to other workers, involuntarily, the lawsuit claims.
This story was originally published March 17, 2025 at 9:19 AM.
