Insurers Sued for Harassment Suit Reimbursement

The Nashville City Paper reports that in the suit Cracker Barrel accuses the Cincinnati Insurance Company and the Houston Casualty Company of breaching their contracts with the store by not honoring insurance policy obligations. The complaint says repeated requests for reimbursement for defense and indemnification related to the harassment suit have been denied, according to the news report.

Last March Cracker Barrel agreed to a $2 million settlement with 51 former and current employees from three different worksites who said they were either sexually or racially harassed (See Cracker Barrel Agrees to $2M Settlement ). The harassment suit, filed in 2004 by the Equal Employment Opportunity Commission, alleged that, as early as 1998, female plaintiffs were subjected to pornographic photographs and cartoons, obscene jokes, sexual propositions, groping, and sexual assaults and black plaintiffs were subjected to racially-charged language from coworkers and managers.

Cracker Barrel says it repeatedly consulted with the insurance carriers before agreeing to the settlement. The suit says the insurance policies were designed to protect it against monetary losses due to employment lawsuits.