Outback Steakhouse To Pay $19 Million In Sexual Bias Suit

EEOC Says Restaurant Chain Failed To Promote Women To Management

Outback Steakhouse has agreed to pay $19 million to settle a major class lawsuit alleging sexual discrimination at its hundreds of corporate-owned restaurants nationwide, the Equal Employment Opportunity Commission announced Tuesday.

According to the EEOC, Outback discriminated against thousands of female employees by not promoting them to higher-level profit-sharing management positions and denying them favorable job assignments that would help them be considered for top positions.

It is the largest EEOC discrimination settlement in state history, said Denver attorney Stephanie Struble who was a lead lawyer in the lawsuit.

According to the suit, filed in September 2006, managers allegedly made comments that disparaged women workers.

Tom Flanagan, a joint venture partner, allegedly said female managers had "let him down" and "lost focus" when they had children. He also allegedly said women managers had trouble "saying no" and that he wanted "cute girls" to work in the front as servers.

Ben Martinez, a managing partner, allegedly told another female employee she should be a teacher instead of working in the restaurant business.

The $19 million will be paid to female employees at Outback who have worked from 2002 to the present, and who have worked there for at least three years.

"We encourage women who believe they were discriminated against by Outback to come forward and complete the claims form to obtain monetary relief," Struble said.

Besides paying the $19 million, Outback must also institute an online application system and create an executive Human Resources position. According to the agreement, the restaurant chain must also hire an outside consultant who would make sure Outback is in compliance with the terms of the settlement and analyze data from the online application system to determine whether women are being provided equal opportunity for promotion.

"We are particularly pleased about Outback's commitment to a new process for employees to apply for promotion online and for hiring managers to make their selections from the online applications. We think this new process will help give women a fair opportunity to advance in the company," said Rita Byrnes Kittle, senior trial attorney for the EEOC.

OSI Restaurant Partners, LLC (OSI), the parent company of Outback Steakhouse, provided the following statement:

    "Outback Steakhouse does not tolerate discrimination of any kind and is committed to equal opportunity for all employees. The Consent Decree reflects the policies, procedures and systems that were developed by Outback to provide all employees the opportunity to express interest in and be considered for promotions. The Company is pleased that the EEOC recognizes its electronic registry as an important tool to provide and track equal employment and advancement opportunities for all employees.

    It is important to note that the settlement includes no finding of fault on the part of Outback. The Company ultimately determined that settling the lawsuit with funds provided entirely by insurance was preferable to the cost and distraction of further litigation. In the current economic climate, the Company believes it is more important than ever to concentrate all of its financial and operational resources on serving its guests, supporting its employees, and driving its business."

Liz Smith, the recently-appointed CEO of OSI, stated, "I am very pleased the Company and the EEOC have resolved this legacy issue. There is no glass ceiling at OSI, and we do not tolerate discrimination in any form. I have a profound commitment to ensuring not only equal, but very compelling and rewarding employment opportunities for all individuals and I look forward to building on the processes already in place at Outback to ensure we live up to that standard every day."

Outback Steakhouse was founded in Tampa, Fla. in 1988. There are over 950 Outback Steakhouse restaurants throughout the world.

This settlement tops a $13 million age-discrimination settlement by Martin Marietta Corporation with the Colorado EEOC in 1996, which until Tuesday, was the largest ever for the state