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Applebee’s Stays in the EEOC’s Crosshairs: This Time in New York State for $100,000.

As we previously wrote, an Applebee’s Neighborhood Bar & Grill franchisee recently reached a five figure settlement with the Equal Employment Opportunity Commission (EEOC), the federal watch dog responsible for enforcing federal anti-discrimination employment laws, in South Carolina.  It seems Applebee’s remains a target for the EEOC. In late October, Apple-Metro, Inc. and Hawthorne Apple, LLC, which are franchisees of Applebee’s in New York settled a sex harassment lawsuit with the EEOC for $100,000.   

In the case, restaurant staff in Hawthorne, New York routinely verbally harassed a transgender female employee.  Workers made derogatory comments regarding her transgender status and routinely referred to her by a male name and with male pronouns.  The employee reported the harassment to management who ultimately terminated her employment.  The EEOC brought suit on the employee’s behalf in federal court in New York asserting claims of retaliation and sex discrimination in violation of Title VII of the Civil Rights Act of 1964.  

Under the terms of the settlement, in addition to paying the former employee $100,000, the restaurant must revise its anti-harassment policy and provide training to all employees.  The restaurant also must self-report any discrimination or retaliation claims it receives to the EEOC directly.

For employers, the terms of this settlement agreement should send shivers up your spine.  Just as with the South Carolina franchisee, the terms of this agreement require the restaurant to directly report complaints of harassment and discrimination to the EEOC.  This is not a good position for any employer.  It is unclear if the EEOC will encourage those employees making the complaint to file a charge of discrimination or if the EEOC itself will initiate an additional lawsuit against the company.  Either way, a company is in a much better position if it can have the first shot of resolving internal complaints rather than immediately having involvement from a government agency.  Moreover, resolving internal complaints is the right thing for a company to do to have a culture of acceptance and tolerance of all employees regardless of gender, age, nationality, race, etc. 

Aside from these concerns, this case should serve as a wakeup call for employers with transgender and other non-gender conforming employees.  (Also see our article on the U.S. Supreme Court finally addressing the issue of whether LGBTQ employees are protected under Title VII.)  Employers must train their employees and management team on these types of diversity issues.  Moreover, employers must ensure no retaliation of employees who report allegations of harassment or discrimination.  Failure to heed these warnings can be quite costly for a company – just as this Applebee’s franchisee found out. 

Brody and Associates regularly provides training and counseling on maintaining a harassment free environment and on employment law issues in general. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.