US Department of Labor files suit against owner, operator of 3 popular North Houston restaurants who used workers’ tips illegally to pay expenses

HOUSTON – The U.S. Department of Labor has filed suit asking a federal court to require the owner and operator of three popular north Houston-area restaurants in Tomball and Spring - that allegedly used a portion of employees’ tips for business expenses, including condiments and takeout packaging - to pay back wages and damages to the affected workers.

The allegations stem from investigations by the department’s Wage and Hour Division that found Tejas Chocolate LLC and Tejas Dragon Companies LLC collected the employees’ tips to distribute among them; however, the employer diverted some of the tips for business purposes in violation of the Fair Labor Standards Act. By law, tips are the property of those who earn them, and cannot be used to pay business expenses. 

Filed by the department’s Office of the Solicitor, the suit seeks back wages and an equal amount in liquidated damages for current and former employees of two locations of Tejas Chocolate & Barbecue, operated by Tejas Chocolate LLC, and Tejas Burger Joint, operated by Tejas Dragon Companies LLC, from May 2021 to May 2023 and beyond if the division finds the employer continued to use employees’ tips improperly.

“When it comes to workers’ tips, the law is crystal clear: tips are the property of the workers who earn them,” explained Regional Wage and Hour Administrator Betty Campbell in Dallas. “The owner and operator of Tejas Chocolate & Barbecue and Tejas Burger Joint willfully deprived employees of all their hard-earned tips and used their money to illegally benefit their businesses.”

The department filed its lawsuit on July 19, 2024, in the U.S. District Court for the Southern District of Texas, Houston Division.

“The Department of Labor is determined to protect the rights of all workers when their employers shortchange them for any reason and will use all legal means necessary,” said Regional Solicitor of Labor John Rainwater in Dallas. “The operator of these businesses directly violated the law, denying employees all the tips left by their customers to recognize their good service.”

Tejas Chocolate LLC was founded in 2011 and services the north Houston area. The same employer also founded Tejas Dragon Companies LLC in Tomball in 2019. 

For more information about the Fair Labor Standards Act and other laws enforced by the division, contact the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Workers and employers can call the division confidentially with questions, regardless of where they are from, and the division can speak with callers in more than 200 languages.  

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Download the agency’s new Timesheet App for iOS and Android devices – free and available in English and Spanish – to track hours and pay.

Court: U.S. District Court for the Southern District of Texas, Houston Division

Docket Number: 4:24-cv-02695