Ryan's Steakhouse Settles on Charges of Race, Gender Discrimination

June 15, 2009 (PLANSPONSOR.com) - The U.S. Equal Employment Opportunity Commission (EEOC) has announced a class litigation settlement under Title VII of the Civil Rights Act for one half million dollars with Fire Mountain Restaurants LLC, doing business as Ryan's Family Steakhouse (Ryan's).

According to the announcement, the EEOC claimed in a lawsuit that a Paducah, Kentucky, Ryan’s subjected black and female employees to a sex-based and race-based hostile work environment, as well as adverse terms and conditions of employment. In some instances, black workers were terminated because of their race, the EEOC charged.

In addition, the agency said white employees were also harassed because of their association with black coworkers and family members. The mistreatment included being referred to “race traitors” and other hostile names by white managers.

The EEOC also asserted that female workers were harassed because of their gender, and all complainants suffered retaliation for reporting the discrimination. The sex-based hostile work environment included male managers physically intimidating women, making sexual advances, and calling them gender-related epithets.

Under the consent decree, and as compensation for pre-petition harm, three claimants will each receive $25,000 as allowed unsecured non-priority claims, while three others will each receive $50,000 as allowed unsecured non-priority claims – all to be paid pursuant to a confirmed bankruptcy plan ofBuffets Holdings, Inc. and all of its subsidiaries, including Fire Mountain. A seventh claimant will receive two separate allowed unsecured non-priority claims, one for $25,000 and one for $200,000, both to be paid pursuant to the confirmed plan. As compensation for post-petition harm, four of the claimants will also receive a portion of a $50,000 cash settlement fund for compensatory and punitive damages, the announcement said.

In addition, the decree provides that the Paducah restaurant is enjoined from engaging in harassment on the basis of race and sex and from retaliating against employees who complain about it. The employer also agreed to monitoring by the EEOC, training its managers on anti-discrimination laws, and posting a notice stating its commitment to maintaining an environment free of racial and sexual harassment and retaliation.