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Outback Steakhouse settles class-action sex discrimination case for $19M

Outback Steakhouse has agreed to pay $19 million to settle a long-looming class-action lawsuit alleging discrimination against thousands of women at hundreds of its restaurants.

Women who have worked at the Tampa chain's corporate-owned restaurants at any point since 2002 and have at least three years of tenure could be eligible for a piece of the settlement. At one point during the case, attorneys estimated more than 150,000 potential plaintiffs.

The settlement with the U.S. Equal Employment Opportunity Commission was an outgrowth of an EEOC complaint filed in Colorado in 2003. In 2006, the EEOC ratcheted the complaint to the next level, filing suit alleging that Outback denied women equal opportunities for advancement and discriminated against female workers in the terms and conditions of their employment.

Women were denied favorable job assignments, such as kitchen management experience, which is required for workers to be considered for higher-level, profit-sharing management positions, the EEOC maintained.

"There are still too many glass ceilings left to shatter in workplaces throughout corporate America," EEOC acting chairman Stuart J. Ishimaru said in announcing the deal. "The EEOC will continue to bring class lawsuits like this one against employers who engage in gender discrimination on a systemic scale."

OSI Restaurant Partners, the parent company of Outback Steakhouse, has repeatedly denied the allegations.

The company stressed Tuesday that the settlement includes no finding of fault on Outback's behalf. Rather, OSI said it determined that settling the suit with funds provided entirely by insurance was preferable to the "cost and distraction" of further litigation.

OSI's restaurant chains are working their way out of a deep sales swoon affecting the casual dining industry. Revenue was down 10 percent through the first half of 2009.

"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," OSI said.

The settlement comes less than two months after former Avon Products executive Liz Smith was appointed chief executive of OSI, becoming the first woman to hold the company's top job. Smith said she was pleased to resolve the "legacy issue" with the EEOC.

"There is no glass ceiling at OSI, and we do not tolerate discrimination in any form," she added. "I have a profound commitment to ensuring not only equal, but very compelling and rewarding employment opportunities for all individuals."

As part of the claims process, an administrator will send letters to all female workers employed at corporate-owned Outback restaurants from 2002 to the present who have at least three years of tenure.

"We encourage women who believe they were discriminated against by Outback to come forward and complete the claims form to obtain monetary relief," said Stephanie Struble, an EEOC Denver trial attorney who helped lead the litigation.

In its consent decree, Outback also agreed to bring in an outside consultant, create a new job called "vice president of people" and monitor the success of an online application system for current workers seeking managerial jobs.

"Much of what is in this settlement are things we had already done or were in process of doing anyway," OSI spokesman Joe Kadow said.

For instance, Outback created the vice president of people job and enlarged its staff in human resources more than a year ago.

It also had already rolled out its online application system for management jobs in the company in early 2009. But now employees will have direct access to apply and test for job openings.

The company said it was pleased that the EEOC recognized the electronic registry as an important tool to track equal employment and advancement opportunities.

Jeff Harrington can be reached at or (727) 893-8242.

.Fast facts

Outback's agreement

As part of a four-year consent decree over alleged discrimination against female employees, Outback Steakhouse has agreed to:

• Pay $19 million into a fund to reimburse current and former female workers at corporate-owned restaurants. The EEOC and Outback parent OSI Restaurant Partners did not specify the scope of eligible candidates Tuesday. Earlier, attorneys had estimated there could be more than 150,000 potential plaintiffs.

• Institute an online application system for employees interested in managerial and other supervisory positions.

• Employ a human resource executive in the recently created position of "vice president of people."

• Employ an outside consultant for at least two years who will determine compliance with the decree and analyze data from the online application system to determine whether women are being provide equal opportunities for promotion.

• Report every six months to the EEOC.

Outback Steakhouse settles class-action sex discrimination case for $19M 12/29/09 [Last modified: Tuesday, December 29, 2009 9:24pm]
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