Fast Food Franchisee to Pay $1.6M in Harassment and Retaliation Case

The U.S. Equal Employment Opportunity Commission (EEOC) recently announced that a Vermont McDonald’s franchisee, Coughlin Inc., has agreed to a $1.6 million settlement in a sexual harassment and retaliation case. The lawsuit alleged that the employer created a sexually hostile work environment against a mostly teenage workforce. In brief, the five-year consent decree settling the case includes lost wages, compensatory damages, and civil penalties. In March 2022, another fast-food franchise paid $200,000 to settle a similar harassment and retaliation case.

Background of the Harassment and Retaliation Case

According to the lawsuit, the employer subjected the workers to a hostile working environment at their McDonald’s location in Randolph, Vermont. A male manager allegedly touched the workers inappropriately, hit and groped them, made sexually explicit comments directed at them, and threatened them with physical harm. Additionally, the manager retaliated against at least one of the workers. In that case, he revoked her disability-related reasonable accommodation and forced her to quit after she complained.

Title VII of the Civil Rights Act of 1964 and Harassment

Under Title VII of the Civil Rights Act of 1964 (Title VII), harassment is a type of illegal employment discrimination. The law defines harassment as unwelcome conduct based on one or more protected classes. In detail, these classes include race, color, religion, sex (including sexual orientation, gender identity, or pregnancy), national origin, age, disability, or genetic information (including family medical history). Markedly, harassment is illegal when:

1. Enduring the harassment becomes a condition of continued employment, and
2. It is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive.

Finally, Title VII also protects employees who object to discrimination from retaliation or any adverse employment action against an employee engaged in protected activity under their rights. Protected activities include complaining about sexual harassment. Meanwhile, retaliation can consist of actions like demotion or firing.

Settlement in the Harassment and Retaliation Case

The U.S. District Court for the District of Vermont reached a five-year consent decree in settling the harassment and retaliation case. The settlement includes $1.475 million in wages lost and compensatory damages. In addition, the employer will pay $125,000 in civil penalties to the state of Vermont. Non-monetary relief under the consent decree includes:

• an injunction to prevent future discrimination,
• anti-discrimination and harassment training for managers and human resources personnel,
• mandatory revisions to the employer’s equal employment opportunity policies and procedures,
• the hiring of an independent monitor to ensure the employer complies, and
• required complaint reporting in future sexual harassment and retaliation cases.

Finally, the employer must prevent the manager accused of harassment from entering the premises. Under the consent decree, the EEOC will monitor the employer’s compliance obligations for five years.