Lexington restaurant chain BHG to pay $9 million in wage theft settlement

Lexington, Ky. — Bluegrass Hospitality Group (BHG), one of Lexington’s most well-known restaurant chains, has agreed to a $9 million settlement in a class-action lawsuit alleging tip and wage theft from employees. The Lexington Herald-Leader reports that court records show that the settlement follows negotiations between BHG and several former and current workers.

BHG operates popular restaurants such as Malone’s, Malone’s Prime Events & Receptions, Harry’s, Aqua Sushi, Drake’s, and OBC Kitchen. The lawsuit, which was initially filed in June 2024 by Kentucky-based employees, includes workers from BHG locations across Kentucky, Missouri, Tennessee, North Carolina, Alabama, and Illinois.

According to court documents, the plaintiffs accused BHG of violating the Fair Labor Standards Act and Kentucky Wages and Hours Act. The complaint alleges that servers and bartenders were paid below the federal minimum wage without receiving the legally required notice regarding the use of a tip credit toward their wages. Additionally, the suit claims that employees were required to perform non-tipped tasks—such as sweeping, mopping, rolling silverware, and setting up restaurant sections—for more than 20% of their work week, which is prohibited under federal law if a tip credit is applied.

The lawsuit also asserts that workers were compelled to contribute their tips to other employees involuntarily.

In response, BHG released a statement emphasizing its commitment to providing a positive workplace. “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 stated. “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.”

As part of the agreement, BHG will cover attorney fees and other costs for the plaintiffs. The settlement was finalized in early February.