Texas Roadhouse Ends Sexual Harassment Suit for $1.4M

EEOC’s settlement with franchisee also includes hiring, training and reporting requirements

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A Texas Roadhouse franchisee in Ohio agreed to pay $1.4 million to settle a sexual harassment and retaliation lawsuit brought on behalf of female servers and hostesses, the Equal Employment Opportunity Commission (EEOC) announced on Sept. 21.

The EEOC filed the lawsuit in September 2014 against restaurant operator East Columbus Host LLC and its management company, Ultra Steak Inc.

The agency asserted that restaurant manager Eric Price subjected female employees, including teenagers, to unwelcomed touching and requests for sexual favors in exchange for employment benefits.

Despite numerous harassment complaints beginning in 2007, Price wasn't fired until May 2011 when a surveillance camera in his office showed him touching a 17-year-old female employee, the EEOC said.

The settlement was reached shortly after Judge James Graham of the U.S. District Court for the Southern District of Ohio ruled that many of the asserted claims raised questions for a jury to answer.

The key takeaway from the case is that "employers cannot sit back and wait until they catch a manager on video sexually harassing an employee before taking accusations of their employees seriously," said Ellen Toth, an attorney with Ogletree Deakins in Cleveland.

"Judge Graham came down hard on the employer for waiting three and a half years, despite receiving dozens of complaints from a variety of female employees, before finally terminating the harasser's employment," she said.

"Employers have to be able to show their employees and prove to a judge or jury that they promptly, thoroughly and honestly investigated each complaint they received," Toth added. "This lesson is magnified when an employer receives complaints of physical touching of underage women."

Training and Reporting

The settlement contains nonmonetary relief, including an agreement not to rehire Price and an offer to reinstate certain female workers who either quit or where fired as a result of the harassment.

Under a five-year consent decree, the companies will track and report all gender discrimination and retaliation complaints. They will also provide all employees with training on discrimination and retaliation.

Supervisory and HR employees will receive additional training on their duty to monitor the workplace and to investigate and respond to harassment and discrimination claims.

"The training, tracking, posting and reporting required by the consent decree should help ensure that other women and teens employed by these companies don't have to be exposed to such despicable conduct," said Debra Lawrence, a regional attorney with the EEOC in Philadelphia.

Toth noted that employers should ensure that sexual harassment training is provided on an ongoing basis.

"Training for managers is essential so they know that they must take action in response to any report or observation of sexual harassment in the workplace and that they cannot discourage their employees from reporting violations," she added. "They have to know that, in many states, they can be held personally liable to claims of harassment."

Toth said training for nonmanagement employees is also essential so they are familiar with the company's policy and know how to report claims without fear of retaliation. 

Multiple Reporting Channels

"Restaurants often have only a few managers and a staff made up of young—even high-school-age—employees," Toth noted. "It is not uncommon for employees to believe the manager of that location is at the top of the management chain."

Therefore, workers should have multiple avenues for reporting sexual harassment by a supervisory or management employee.

For retail and restaurant operations that are remote from corporate headquarters, Toth said companies may want to:

  • Provide contact information for regional and corporate human resource professionals.
  • Offer readily available and anonymous Internet and telephone hotlines.
  • Have division and regional management make unannounced visits at nonpeak hours, which can help open communication channels, establish relationships and uncover hidden issues.

"While camaraderie and teamwork are essential for business operations in restaurants," Toth said, "employers have to make sure their employees know how to reach outside their worksite to report policy violations without retaliation." 

EEOC General Counsel David Lopez said the agency hopes the Texas Roadhouse restaurant settlement can "serve as a road map to other employers seeking to prevent and eradicate sexual harassment in their workplace."

The case is EEOC v. East Columbus Host, LLC d/b/a Texas Roadhouse, S.D. Ohio, No. 2:14-cv-1696.

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