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Frederick restaurant operator settles EEOC harassment claim

The operator of an IHOP restaurant in Frederick will pay a total of $125,000 to two waitresses whose boss allegedly sexually harassed them, under an agreement the company reached with the U.S. Equal Employment Opportunity Commission on Wednesday.

Koerner Management Group Inc. also agreed to retain a neutral attorney or human resources consultant to serve as an ombudsman the next four years to ensure the company’s compliance with laws banning sexual harassment and sex discrimination at KMG’s 13 International House of Pancakes locations in Maryland and Virginia.

KMG has denied the alleged harassment and admitted no wrongdoing in agreeing to the settlement with EEOC, the terms of which are in a consent decree approved by U.S. District Judge George L. Russell III.

“As you can see from the consent decree, KMG denies the allegations of sexual harassment that were raised by the two employees being represented by the EEOC,” the company said in a statement released Friday through its attorney, K. Nichole Nesbitt,  of Goodell, DeVries, Leech & Dann LLP in Baltimore.

“Nonetheless, in order to avoid the costs and business disruption of protracted litigation, KMG worked closely and cooperatively with the EEOC to resolve the matter, including by taking policy actions that are consistent with KMG’s existing employment practices,” the company added. “KMG takes its anti-harassment obligations seriously and is glad to move forward with the EEOC’s approval of its training program, policy materials, and complaint handling. Providing excellent customer service requires a healthy work environment, and KMG appreciates the EEOC’s support.”

EEOC regional attorney Debra M. Lawrence said in a statement announcing the settlement Thursday that “all employers have an obligation to protect their employees from sexual harassment.”

“This obligation is especially acute in the food service and similar industries where employees – and for that matter, managers – are often young and inexperienced,” Lawrence added. “For many it’s their first job. In such an environment, it is critical that employers take proactive steps to train and educate staff, ensure oversight and promptly correct any harassment.”

In its lawsuit, EEOC claimed that 17-year-old waitresses Sarah Perez and Brenna McCauley endured unwelcome touching, sexual advances and vulgar comments about their appearance, attire and bodies by general manager Max Trinidad, who had authority over their compensation, shifts, table assignments, job duties and continued employment at the restaurant on Buckeystown Pike.

The harassment in 2016 and 2017 became so intolerable that Perez and McCauley were compelled to quit, the commission alleged.

KMG knew or should have known of the harassment but “failed to prevent, address or correct” it, EEOC claimed in the lawsuit filed March 15, 2021, in the U.S. District Court in Baltimore.

The consent decree calls for KMG to pay McCauley $75,000 and Perez $50,000.

The ombudsman will have the authority to “promptly and thoroughly” investigate allegations of sexual harassment and sex discrimination at KMG’s IHOP restaurants, as well as any claims that management retaliated against an employee who complained of harassment or discrimination. The ombudsman will also report all completed investigations to EEOC.

In addition, the ombudsman will conduct an annual audit of each KMG IHOP location to ensure restaurant managers and staff are aware of the prohibition on sexual harassment and the protections in place for employees, the consent decree stated.

KMG agreed to provide two hours of in-person or livestreamed training to all managers on preventing sexual harassment and the prohibition on retaliating against employees who report harassment. The training will instruct managers to report all allegations of harassment to the ombudsman.

The company will also notify all employees of their right to be free of sexual harassment and the availability of the ombudsman and other legal recourse if they have a complaint.

“Unfortunately, sexual harassment remains prevalent in the restaurant industry,” Jamie R. Williamson, EEOC’s district director, said in the commission’s statement announcing the settlement. “It’s critical to remind victims that sexual harassment is against the law, they do not have to tolerate it at work, and they are protected when they complain.”

The settled case was docketed at the U.S. District Court as U.S. Equal Employment Opportunity Commission v. Koerner Management Group Inc. d/b/a IHOP, No. 1:21-cv-00652GLR.