November 10, 2009 / 11:31 PM / 10 years ago

UPDATE 1-Cheesecake Factory settles sexual harassment suit

* EEOC says male employees had “lived in fear”

* Company to pay $345,000, denies wrongdoing (Adds Cheesecake Factory statement)

NEW YORK, Nov 10 (Reuters) - Restaurant chain Cheesecake Factory Inc (CAKE.O) will pay $345,000 to settle a lawsuit accusing it of allowing male kitchen staffers to sexually harass other male workers in a restaurant near Phoenix.

The Equal Employment Opportunity Commission (EEOC) announced the settlement on Tuesday. It resolves charges that the company knew about and tolerated repeated sexual assaults at the Chandler, Arizona restaurant.

The settlement of the 16-month-old lawsuit also calls for Cheesecake Factory to improve training and appoint an ombudsman to address sexual harassment claims by employees.

“Beyond the lavish decor that the company boasts on its website was a horribly dysfunctional workplace where male workers lived in fear,” Mary Jo O’Neill, regional attorney of the EEOC district office in Phoenix, said in a statement.

U.S. District Judge Neil Wake issued a consent decree for the settlement on Nov. 5, in which he said Cheesecake Factory “specifically denies” the EEOC allegations.

Cheesecake Factory said in a statement that the claims in the lawsuit were without merit, and that the settlement allowed it to “avoid any further disruptions and additional expenses of litigation for a matter that has lingered on for more than three years.” It declined to discuss the specific allegations.

The company is based in Calabasas Hills, California.

The case is EEOC v. Cheesecake Factory Inc, U.S. District Court, District of Arizona, No. 08-1207. (Reporting by Jonathan Stempel; Editing by Tim Dobbyn)

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