Actually, yes, he can.
11.50.560 - Forbidden devices. A. No person shall erect or maintain at or near a street or alley any structure, sign, light or device that is:
1. Visible from a street or alley and simulating any directional, warning, or regulatory sign or likely to be mistaken for such a sign or bearing any such words as "danger," "stop," "slow," "turn," "impound," or similar words, figures, or directions likely to be construed as giving warning to or regulating traffic;
Neither of those two items I put in bold apply here. His sign is not simulated, his sign is not likely to be mistaken for an actual traffic sign. It's a lid.
Seeing the actual ordinance, I agree with you.
Texas Penal Code Sec. 38.05. HINDERING APPREHENSION OR PROSECUTION.
(a) A person commits an offense if, with intent to hinder the arrest, prosecution, conviction, or punishment of another for an offense [...] he:
(1) harbors or conceals the other;
(2) provides or aids in providing the other with any means of avoiding arrest or effecting escape; or
(3) warns the other of impending discovery or apprehension.
(b) It is a defense to prosecution under Subsection (a)(3) that the warning was given in connection with an effort to bring another into compliance with the law.
I think the qualifiers here would have to be "simulating" or "likely to be mistaken" neither of which apply in his case. Otherwise places like a Truck Stop, or Slow Jimmy's Restaurant, or Danger Dan's Deals Used Cars would all have to come down.