Bluegrass Hospitality Group (BHG), a restaurant chain in Lexington, Kentucky, US, has reached a $9m settlement in a lawsuit accusing the company of wage and tip theft from its employees. The agreement was finalised in early February 2025.
The Lexington Herald-Leader reports that court records indicate the settlement resulted from negotiations between BHG and several past and present employees.
Go deeper with GlobalData
BHG runs well-known dining establishments such as Malone’s, Malone’s Prime Events & Receptions, Drake’s and OBC Kitchen.
The class-action lawsuit, filed in June 2024 by employees based in Kentucky, expanded to include workers from BHG locations in Missouri, Tennessee, North Carolina, Alabama and Illinois.
The plaintiffs alleged that BHG violated the Fair Labor Standards Act and the Kentucky Wages and Hours Act by failing to pay federal minimum wage and improperly handling tip credits.
Court documents reveal that servers and bartenders were paid below the minimum wage without the required legal notice about the use of a tip credit.
Employees were reportedly made to perform non-tipped duties such as sweeping, mopping, rolling silverware and setting up restaurant sections for more than 20% of their work week, a practice restricted under federal law when a tip credit is applied.
The lawsuit also claimed that employees were forced to share their tips with other staff members against their will.
BHG responded: “At Bluegrass Hospitality Group, there is nothing more important than providing a workplace where team members are treated and feel like family.
“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.”
BHG will bear the costs of attorney fees and other expenses for the plaintiffs.
