U.S. Equal Employment Opportunity Commission v. Red One Plaza, LLC

Background

The Equal Employment Opportunity Commission (EEOC) sued Red One Plaza, LLC, doing business as Lucy’s Cantina Royale, Host Restaurants, Imian Partners, LLC, Camp 1382, LLC, doing business as Campagnola, Host RG 40, LLC, doing business as Printer’s Alley, Host RG 54, LLC, doing business as Bill’s Townhouse, Local West, LLC, doing business as Local NYC, 45 Mercer Restaurant, LLC, doing business as Galli, Host RG Mercer, LLC, Host RG 74, LLC, and Host 1373, LLC. The EEOC brought the action under Title VII of the Civil Rights Act of 1964 and Title I of the Civil Rights Act of 1991, alleging unlawful employment practices based on sex, specifically pregnancy, and seeking relief for Charging Party Miccol DeGracia.

The EEOC alleged that the defendants collectively fired DeGracia because of her pregnancy. The defendants denied the material allegations of the complaint and the related discrimination charge. The parties agreed to resolve the case through a consent decree, without findings of fact or conclusions of law.

Consent Decree Requirements

The decree applies jointly and separately to the defendants and remains in effect for two and a half years from its effective date. It binds specified present and future directors, officers, managers, agents, successors, and assigns of the named defendants, and requires notice to potential purchasers or successors before certain business or asset transfers.

The named defendants are barred from terminating employees because of pregnancy. They are also barred from retaliating against current or former employees who complain about discrimination, oppose allegedly unlawful practices, file discrimination charges, provide information or testimony, or otherwise engage in protected activity. The decree specifically prohibits negative job reviews or references because of such activity.

The restaurant defendants—Lucy’s Cantina Royale, Host Restaurants, Campagnola, Printer’s Alley, Bill’s Townhouse, Local NYC, and Galli—must adopt and distribute nondiscrimination policies and complaint procedures. The policies must address sex and pregnancy discrimination, retaliation, complaint reporting, investigations, corrective action, workplace accommodations, and employees’ rights to file charges with the EEOC. They must provide accessible complaint options, including options involving Spanish-language assistance, allow anonymous complaints, and explain how accommodation requests are handled.

The restaurant defendants must provide at least 90 minutes of annual training to managers, supervisors, and human-resources employees, and at least one hour of annual training to nonsupervisory employees, throughout the decree’s term. The training must cover federal employment-discrimination laws, pregnancy discrimination, workplace accommodations, retaliation, complaint procedures, and disciplinary consequences. The decree requires training records and gives the EEOC an opportunity to review training materials.

The restaurant defendants must post a notice about the lawsuit and resolution, give employees a letter and the new policies, maintain required equal-employment-opportunity posters, and provide policies to newly hired employees and employees returning from furlough. The EEOC may inspect premises and records and interview employees on reasonable notice. The defendants must provide certifications and periodic reports concerning compliance, training, complaints of pregnancy discrimination or retaliation, and requests for pregnancy-related accommodations. Required records must generally be maintained during the decree’s term and for one year afterward.

If a potential employer requests a reference for DeGracia, the named defendants may provide only her job title and dates of employment at Lucy’s Cantina Royale, with no other statement.

Monetary Relief

The named defendants must pay a total gross sum of $45,000 into a qualified settlement fund administered by Settlement Services, Inc. The fund must distribute $22,500 designated as compensatory damages and interest on back pay, and $22,500 designated as back wages. Required withholdings apply to the back-wage portion. The defendants must also pay their employer payroll-tax obligations and the administrator’s fee without deducting those amounts from DeGracia’s payments.

Court’s Action and Disposition

Judge Lorna G. Schofield stated that the consent decree was fair and reasonable. The court approved, ordered, adjudged, and decreed the settlement. The action was dismissed without costs, pending motions were denied as moot, conferences and deadlines were canceled, and the Clerk of Court was directed to close the case. The court retained jurisdiction to enforce the decree. Because the parties settled and the decree could be entered without findings, the opinion does not decide whether the alleged pregnancy discrimination occurred.

Practical Effect

The defendants must comply with the decree’s restrictions, policy, training, notice, reporting, recordkeeping, monitoring, and payment requirements. The EEOC may seek enforcement if a defendant fails to perform the decree’s terms. The decree does not prevent the EEOC from processing other pending or future charges against the defendants or bringing actions based on those charges.