In the lawsuit, the Justice Department said that the owners and operators of Kung Fu Saloon, which has locations in Dallas, Houston and Austin, violated part of the Civil Rights Act "by engaging in a pattern or practice of discrimination against African-American and Asian-American patrons because of their race, color and national origin."
The suit said that Kung Fu denied Africa-Americans entry "in dozens of instances" based on a dress code, while similarly-dressed white guests were still granted entry.
The suit also said that Kung Fu "engaged in other practices to limit the number of African-American and Asian-American patrons at Kung Fu Saloon's locations."
As part of the agreement between Kung Fu and the Justice Department, Kung Fu must post and enforce a dress code policy that is non-discriminatory, implement a system "for receiving and investigating complaints of discrimination," follow federal law by not discriminating against patrons and monitor employees to make sure that they are not discriminating against patrons.
In 2014, a man named DeAndre Upshaw said he tried to get into Kung Fu Saloon in Uptown Dallas, but was denied admission because he did not meet the dress code.
Upshaw claimed all of his friends had the same shoes on, but because they were white, they were allowed in and he was not.
Earlier this year, Kung Fu Saloon Holdings, LLC, paid a fine and agreed to write letters of apology after the Dallas city attorney's office found that the bar violated city code.