The Legal Battle Between Lockhart Smokehouse and Crossbuck BBQ

The owners of Lockhart Smokehouse, which opened in Bishop Arts and has locations in Plano and Arlington, have filed a trio of lawsuits against the owner of Crossbuck BBQ in Farmers Branch and multiple current and former employees who shared ties to the two barbecue restaurants. Lockhart Smokehouse is a well-known local barbecue spot, earning an honorable mention in Texas Monthly’s guide to where to eat barbecue in the Metroplex.

After working at Lockhart since 2011, Tim McLaughlin, a limited partner and former pitmaster at Lockhart, opened Crossbuck BBQ with Lockhart Smokehouse’s former director of operations. According to filings by Jill and Jeff Bergus, McLaughlin left in 2020 after a decade with the barbecue group; he, his wife, Elizabeth, and his mother-in-law, who is an investor in Lockhart, are being sued by the Berguses for between $250,000 and $1 million in damages on allegations of “defamation, disparagement, in conjunction with Timothy McLaughlin’s breach of his fiduciary duties owed to Lockhart.”

McLaughlin’s filing requests financial records, information on Lockhart ownership

On March 9, 2023, McLaughlin, his wife, and his mother-in-law, who was included on behalf of the Forst living trust, which invested in Lockhart, filed a pre-trial petition requesting that representatives from two of the Lockhart LLCs appear at a pre-suit deposition to answer questions relating to the family’s investment in the business. The trio also hopes to answer various questions about how the intellectual property (IP) and branding of Lockhart are being used beyond the Bishop Arts and Plano restaurants. The petition seeks clarity on the ownership of Lockhart’s location at Texas Live! in Arlington: It asserts McLaughlin was promised 20 percent of yearly net proceeds as an investor in the company, which were paid twice before the lawyer representing Lockhart LLC informed him that it was not part of the existing Lockhart properties, and further payments would be withheld — despite its branding as Lockhart’s third location. The petition further seeks clarity into a Lockhart location in Huntsville, Alabama, at a PBR Cowboy Bar, about which entity licensed the Lockhart name and likeness, and if it was moved out of Lockhart LLC, the entity they invested in, improperly. Additionally, it seeks to discern if McLaughlin and his family were improperly left out of investing in the Lockhart properties in Arlington and Alabama per existing agreements. It also raises questions around the nature of expenses charged to the company that encompass food and travel.

The petition alleges that in August of 2020, Jeff Bergus told McLaughlin that he was settling a family lawsuit involving his deceased father’s estate and alleges that he may have been hiding money from step-family members, according to the DMN. McLaughlin alleges that Lockhart did not properly pay dividends to investors at the time, and he claims he asked Jill Bergus if the two circumstances were related in December 2020. As detailed in the suits filed by Lockhart Smokehouse, McLaughlin was suspended days later and fired two weeks later.

“I’d like to reiterate that any insinuation that I am trying to ‘destroy’ Lockhart Smokehouse is insane, as I co-founded/created the concept and am still an owner of it,” McLaughlin says to Eater Dallas in an email, referencing allegations made in the lawsuit filed on behalf of Lockhart LLC. “The last two and a half years have been hell, and now Jill and Jeff Bergus have just sued me, my new business, my wife and my recently widowed mother-in-law with frivolous allegations in response to attorneys filing a petition to gather information about Lockhart Smokehouse.”

Lockhart files a lawsuit alleging defamation, tortious interference, and breach of contract

The filing on behalf of Lockhart LLC from June 9, 2023, asserts that dividend payments were suspended in the pandemic so the restaurant could prioritize employee salaries, and resumed early in 2021. It further alleges that McLaughlin’s exit from the group was related to his behavior toward Jill Bergus and the staff.

“To be clear Mr. McLaughlin was not fired for asking about the financials. He had full and unfettered access to all financial records during his role at Lockhart Smokehouse from 2011 until he was fired,” the Berguses say, via their attorney, in an email to Eater Dallas.

In legal filings on behalf of Lockhart LLC, the Berguses characterized McLaughlin’s treatment of Jill as “belligerent, offensive, confrontational, and threatening communications,” including an allegation that he was “misogynistic” and referred to her as a bitch, which ended with the decision to fire him. The filing alleges that after his employment was terminated, McLaughlin withheld keys and keycards to the business, credit cards, checkbooks, information about logging into its website and email accounts, its mailing list login and information, and other assets. It further alleges that McLaughlin has been secretly upcharging Lockhart for barbecue sauce, from which it says he was to make no profit, and withholding information about the sale of Lockhart barbecue sauce to Buc-ee’s. McLaughlin denied those allegations to Eater Dallas and suggested his lawyer would be filing a countersuit in the near future.

“He did not request information about financials before he was fired. He was mad that a decision was made to give bonuses to employees rather than make a shareholder distribution which was paused during Covid,” the attorney for Lockhart told the DMN in a statement, adding that Lockhart has provided investors with quarterly updates, yearly K-1 documents, and made its financial records available to all shareholders. “Additionally, the McLaughlins were provided records to review and actually did review them when they requested them at the end of 2022.”

McLaughlin disputed that characterization to Eater Dallas, denying that he was abusive or threatening towards Jill, and that, “I don’t even think I saw Jill Bergus once in 2020, she did not come to the restaurants.” He reasserted that he was told “very little” about why he was fired following a request for information about the financial status of the company. The filing by Lockhart includes a copy of the written notice McLaughlin received from its attorney, that was sent to McLaughlin and dated December of 2020, outlining the reasons for his termination.

Lockhart files additional lawsuits against former employees for breaking noncompete contracts

Following McLaughlin’s departure, the former director of operations at Lockhart Smokehouse left the restaurant to start his business renovating homes. He was sued in 2021 by the Burgesses for breach of a noncompete contract and tortious interference (the act of willfully and intentionally interfering with a contract that causes damage or losses), the DMN reports. At the request of the former director’s legal team, that suit went to arbitration. “While we do not believe they are entitled to an arbitration, as a courtesy, we agreed,” Lockhart’s attorney told Eater Dallas in an email. “We have since filed the arbitration.”

McLaughlin and the former director opened Crossbuck BBQ in Farmers Branch in April of 2022. In the same year, the Berguses sued another former Lockhart employee, a pitmaster at Crossbuck, also for alleged breach of a noncompete contract and tortious interference, according to the DMN. McLaughlin tells the DMN that he didn’t recruit either man to work for him and that the pitmaster also allegedly did not understand the contract — it’s unclear if he spoke to the paper directly. That lawsuit is still ongoing.

Lockhart’s lawyer and McLaughlin declined to tell Eater Dallas if McLaughlin signed a do not compete agreement.

“Lockhart Smokehouse has not sued all employees for leaving or going to work for Crossbuck,” the Berguses tell Eater Dallas through their lawyer. “As a matter of fact other employees who formerly worked at Lockhart Smokehouse have worked for Crossbuck. The only ones sued were [the pitmaster] and [the former director] because they were high level management and had employment agreements of confidentiality and non-solicitation clauses.”

The Berguses in an email to Eater Dallas asserted that their countersuit was filed because that pre-trial petition forced their hands. “This [lawsuit] is after they made continued threats and [sent] demanding letters from multiple attorneys over the years. They have made the decision to start and continue with litigation.”

The Bergus lawsuit asserts that by opening a competing business, McLaughlin and his family attempted to “destroy” their business. It also contends that McLaughlin interfered with contracts between Lockhart and its employees by hiring them away to work at Crossbuck, and interfering with existing relationships with vendors and customers, the DMN reports. That report also asserts that the suit claims McLaughlin acted with malice by speaking in a defamatory nature about Lockhart in public. However, no specific comments made by McLaughlin and the Berguses are reported on, and their lawyer declined to elaborate further to the DMN. McLaughlin told the paper that he and his family have only sought information regarding the finances of Lockhart to protect their investment.

McLaughlin asserts to the DMN that he’s attempted to sell his minority shares in the business, and the Berguses have not “come to the table” with a response. When asked about the validity of that statement, the Berguses tell Eater Dallas, “The answer is unequivocally no. We have repeatedly asked if they want to engage in discussion surrounding the shares, however, they have never made an offer or engaged in negotiations.”

McLaughlin tells Eater Dallas he believes that statement to be inaccurate, adding, “I do know that both my attorneys and the trust’s attorneys have struggled to get access to the financial data, clarity on all of the LPs and LLCs [started by Lockhart Smokehouse], and the ownership of the IP that would allow them to better determine the value of the shares.”