McDonald's franchise settles agencies' sexual harassment case for $1.6 mln

(Reuters) - The operator of 10 McDonald's Inc franchises in New England will pay $1.6 million to settle claims by a federal agency and the state of Vermont that a restaurant manager routinely groped and made sexual comments to workers, including many teenagers.

U.S. District Judge William Sessions in Burlington, Vermont, on Thursday approved a consent decree that also requires the franchisee, Coughlin Inc, to overhaul its anti-harassment policies. Coughlin denied wrongdoing.

The U.S. Equal Employment Opportunity Commission in a lawsuit filed last year said the manager of a Coughlin-owned McDonald's in Randolph, Vermont, harassed male and female workers over a five-year period, including grabbing and biting their buttocks and breasts and making lewd comments.

The manager was fired in 2019 after a male employee's parents told police that the manager had hit him in the genitals, according to court filings.

The Vermont Attorney General's office joined the case last year and accused Coughlin of violating state anti-discrimination laws.

Lawyers for Coughlin did not immediately respond to a request for comment. McDonald's was not involved in the case.

In a statement, EEOC Chair Charlotte Burrows said combating workplace harassment is a top priority for the agency, particularly in cases involving vulnerable teenage workers.

Vermont Acting Attorney General Joshua Diamond in a statement said "this settlement sets the tone for employers to recognize their duty to keep workers safe, respect their dignity and provide a workplace free of discrimination."

The AG's office said the settlement is the largest in its history involving sexual harassment claims and one of the largest in an employment discrimination case. It is also significant for the EEOC, which typically announces only a handful of seven-figure settlements each year.

The settlement requires Coughlin to pay up to $1.2 million to workers who were harassed by the manager and $125,000 in penalties to the state. An EEOC spokesman said the agency has identified at least 10 people eligible for payouts and expects more to come forward.

The company will also pay $275,000 to the estate of Jennie Lumbra, a former employee whose EEOC complaint triggered the lawsuit. Lumbra died while the case was pending.

In April, a McDonald's franchisee in Michigan agreed to pay $1.5 million to about 100 female workers who claimed they were harassed by a single manager.

McDonald's has been accused of failing to prevent sexual harassment at its franchise locations and corporate-owned stores. The company has said that it requires franchisees to comply with anti-harassment policies and that it is not liable for legal claims by franchise workers.

The case is Equal Employment Opportunity Commission v. Coughlin Inc, U.S. District Court for the District of Vermont, No. 2:21-cv-00099.

For the EEOC: Cara Chomski and Katie Linehan

For Vermont: Emily Adams of the Vermont Attorney General's office

For Lumbra: Jim Levins of Tepper Dardeck & Levins

For Coughlin: Karen McAndrew and Haley Peterson of Dinse

(NOTE: This article has been updated to include a comment from an EEOC spokesman.)

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