Following are just a few examples of the damage that a single employment practices liability case can cause for a restaurant.

Retaliation for Health Department Complaint

A server is given a “last chance” warning about coming to work late. The disgruntled employee immediately makes a complaint to the health department about alleged unsanitary food-handling practices. Then, upon being terminated for coming in late again, he alleges he was fired in retaliation for making the complaint to the health department. This is a classic set-up by an employee who knows he or she is about to be disciplined or terminated for poor work performance.

Sexual Harassment

A restaurant franchise paid $400,000 to settle a sexual harassment claim by seven teenage workers who alleged the manager groped them, made vulgar comments and made demands for sex. Several girls complained to the assistant manager and the general manager, but remedial action was not taken immediately.

Fair Labor Standards Act

Several assistant managers formerly employed by a mid-sized restaurant chain filed a class action lawsuit against it. The suit alleged that since these employees were required on occasion to perform “non-managerial tasks” — such as bussing tables, running the cash register or serving customers — they should not have been classified as salaried employees who were not entitled to overtime pay. The court granted class action status to the group of former employees. At that point, the restaurant chain knew it could face legal fees in excess of $750,000 and an uncertain outcome if there were to be a trial. The company decided to settle for business reasons. In the end, this matter cost them more than $1,300,000 to resolve.

Gender Discrimination

A national restaurant chain paid $360,000 to settle a gender discrimination suit brought by men alleging that they were denied more lucrative server position because of their sex. The restaurant was accused of only hiring women as servers.

Third Party ADA Claim

A customer threatens to file a class action lawsuit alleging that a restaurant is not Americans with Disabilities Act (ADA) compliant, claiming that the handicapped parking spaces are too narrow, or the counters are two inches too high, or the doors are too heavy or display racks block the aisles. The customer and his or her attorney often settle for a “bargain” of $15,000 to $20,000 (knowing that defense costs could reach six figures for the restaurant) before moving on to the next restaurant down the block.