Two Costly Settlements Resolve Sexual Harassment Charges

Author: Emily Scace, XpertHR Legal Editor

December 22, 2021

A pair of costly settlements in the hospitality industry - one for $1 million, and the other for $690,000 - highlight the risks to employers that fail to take proactive steps to prevent and correct sexual harassment.

According to the Equal Employment Opportunity Commission (EEOC), female applicants and employees at Hyde Bellagio, a former Las Vegas night club, were subjected to sexual harassment that created a hostile working environment, as well as unlawful retaliation, in violation of Title VII of the Civil Rights Act of 1964. Under the terms of its settlement with the EEOC, Hyde Bellagio and Spoonful Management will pay $1 million and take a number of additional steps to compensate victims and prevent future harassment.

The company has agreed to:

  • Establish a class fund to compensate female applicants and employees subjected to sexual harassment;
  • Hire an equal employment opportunity consultant or employment counsel to review and revise its sexual harassment and antiretaliation policies and review all harassment complaints to ensure they are handled appropriately;
  • Evaluate its internal investigative procedures and internal complaint tracking system;
  • Provide training to all employees on sexual harassment and retaliation;
  • Hold managers accountable for compliance with EEO policies and procedures; and
  • Conduct anonymous climate surveys to evaluate and assess the impact of these efforts.

In the second case, the EEOC claimed that a former managing partner of a Florida-based Carrabba's Italian Grill location subjected female employees to sexual harassment. To resolve the allegations, Carrabba's will pay $690,000 to be distributed among female employee victims, in addition to implementing a new sexual harassment policy and new sexual harassment investigation procedures in its restaurants across the US. The company has also agreed to train certain HR and management officials on sexual harassment.

Under Title VII, sexual harassment is considered a form of unlawful employment discrimination based on sex. Sexual harassment includes both quid pro quo harassment, in which submission to or rejection of an unwelcome sexual advance is made a term or condition of employment, and hostile work environment harassment, in which unwanted sex-based conduct is sufficiently severe or pervasive to create a work environment that a reasonable person would consider intimidating, hostile or abusive.