Brittney Kaylee Tran filed a collective action complaint in a Texas federal court on January 3, 2025, against Houston-area restaurant BMB Dining Services Katy Inc. d/b/a Bombshells Restaurant and Bar (“Bombshells”), accusing it of violating the Fair Labor Standards Act (FLSA).[1] Tran worked as a server for Bombshells at its Katy, Texas, location from August 7, 2024, until August 17, 2024. She claimed the company took advantage of the tip credit and paid her and other servers $2.13 per hour while forcing servers to purchase their own uniforms. Tran alleged Bombshells charged her and other servers for their work uniforms and deducted the $75 cost of the uniforms from servers’ paychecks without notifying servers they were required to purchase their uniforms from the company. Tran complained that, because of the pay servers lost out on as Bombshells recouped the costs of its uniforms, servers were not compensated at the federally-mandated minimum wage.

Under the FLSA, employers can pay tipped workers as low as $2.13 per hour, as long as tips make up the difference between that amount and the federal minimum wage of $7.25 per hour.[2] While the FLSA permits an employer to claim this “tip credit,” an employer forfeits its right to the tip credit and must compensate employees at the federal minimum wage if it retains any portion of an employee’s tips.

This is what Tran claims is what Bombshells did when it charged workers for uniforms. Tran relies on an opinion of the Fifth Circuit Court of Appeals that affirmed a judgment in favor of wait staff when a restaurant required the staff to share tips with ineligible employees.[3] Tran argues the illegal tip-sharing in the current case stems from illegal charges assessed to all Bombshells servers for uniforms, that Bombshells lost its right to rely on the tip credit, and that therefore Bombshells must compensate her and other servers at the full minimum wage rate. She contends that all of Bombshells’ servers performed similar duties and were paid according to the same policies, so collective treatment is appropriate. Tran seeks to represent a collective of all servers who worked for Bombshells in Katy during the last three years. Tran’s lawsuit seeks compensation for the cost of uniforms she and other servers were forced to purchase, compensation for the hours for which they were not paid at the federally mandated minimum wage rate, liquidated damages, and attorney fees.

On March 14, 2025, Bombshells filed a motion to dismiss and argued Tran’s lawsuit should be tossed for lack of jurisdiction because it had offered $1,000 to Tran to settle, which would have been enough to cover her claimed damages.[4] Bombshells argued that, during the 10 days that Tran worked for Bombshells, she worked approximately 30 hours, reported $319 in tips, and Bombshells deducted $75 for her uniform. Bombshells claimed that of the $1,000 offered in settlement, Tran would receive $75, representing the amount she would receive if she were to prevail on her wage claim, plus $925 to cover attorney fees and costs. Bombshells claimed Tran’s lawsuit is moot and should be dismissed because the offer of judgment to Tran would provide full satisfaction of her claims by offering her full recovery of her damages, plus her reasonable attorney’s fees and costs.

In response, Tran argued that not only did she not accept the offer, but the offer did not provide full statutory relief.[5] On April 29, 2025, U.S. District Judge Lee H. Rosenthal denied Bombshells’ motion to dismiss the suit on the basis that Tran did not accept the offer of judgment; therefore, her claims were not moot.[6]

On June 16, 2025, Bombshells filed a motion for summary judgment on the basis that the putative collective action members signed valid and enforceable arbitration agreements and collective and class action waivers.[7] Bombshells argued the collective and class action waivers are enforceable and therefore preclude collective action treatment.

Further, Bombshells pointed out that Tran and other servers signed valid arbitration agreements. Tran and the putative collective action members contended the arbitration agreements and waivers were unconscionable and unenforceable. The court has yet to rule on the pending motion for summary judgment.

Takeaway

Any employer taking advantage of the tip credit provided in the FLSA must ensure it is in full compliance with all the delineated requirements, or it will lose the tip credit. If an employer loses the tip credit, it has lost the ability to take the credit at all for the period in which the violation occurred, as to those employees affected by the violation. This means the employer would need to pay to all employees affected the difference between the tip credit wage and the federal minimum wage for that period as damages. This could result in an employer having to pay $5.12 per hour for every hour the affected tipped employees worked during the limitations period, plus liquidated damages, leading to Bombshell consequences.

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Sources

[1] Plaintiff’s Original Collection Action Complaint Summary of Suit, Case 4:25-cv-00033, (S.D.Tex., Jan. 3, 2025).

[2] See 29 US.C.A. § 203(m) (West).

[3] Roussell v. Brinker Intern, Inc. 441 F. App’x 222 (5th Cir. 2011).

[4] Motion to Dismiss for Lack of Subject Matter Jurisdiction, 2025 WL 2050772 (S.D.Tex.).

[5] Plaintiff’s Response to Defendant’s Motion to Dismiss, 2025 WL 2050773 (S.D.Tex.).

[6] Order, Case 4:25-cv-00033, (S.D.Tex., April 29, 2025).

[7] Defendant’s Motion for Summary Judgment Against The Opt-ins, The Putative Collective Action and Its Putative Member, 2025 WL 2050774 (S.D.Tex.).