Compliance Blog

Chicago Restaurant Chain to Pay $1.9 Million to Settle Race Discrimination Lawsuit

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Rosebud Racial Discrimination Lawsuit

Chicago is a town known for its great restaurants, but a popular restaurant group forgot one important ingredient – training employees and managers about race discrimination.

Rosebud Restaurants, Inc., which operates Italian restaurants in the Chicago area, agreed to pay $1.9 million to settle a four-year-old race discrimination lawsuit filed by the US Equal Employment Opportunity (EEOC). The lawsuit alleged that the popular eateries violated civil rights laws by refusing to hire African-American applicants because of their race. Race discrimination in hiring violates Title VII of the Civil Rights Act of 1964.

The EEOC also charged that managers, including Rosebud owner Alex Dana, used racial slurs to refer to African-Americans. At the time the EEOC began investigating the company’s hiring practices many of its restaurants had no African-American employees at all.

Additionally, the EEOC said that Rosebud violated federal regulations by failing to maintain employment applications for one year and by failing to file employer-information reports that provide employment data by job category, race, ethnicity and gender.

Under the settlement, Rosebud will pay $1.9 million to African-American applicants who were denied jobs. The company also agreed to set hiring goals for qualified black applicants, with the aim that 11% of Rosebud’s future workforce will be African-American.  

The settlement also requires Rosebud to:

  • Recruit African-American applicants
  • Train employees and managers about race discrimination and retaliation
  • Provide periodic reports to the EEOC on complying with the decree’s terms for four years

Workers of color face barriers
EEOC Chicago Regional Attorney Gregory Gochanour said, “African-Americans have faced and still face barriers in being hired at upscale restaurants, especially in visible, and often well-paid, positions such as server. That is why the recruiting and hiring relief in this decree is so important. It will lead directly to qualified blacks being hired for front- and back-of-the-house positions, helping to remedy past discrimination by Rosebud and ensuring equal employment opportunities for future African-American applicants.” 

A 2014 report by Restaurant Opportunities Centers United found that discrimination and occupational segregation pervades the restaurant industry and prevents many workers of color and women from obtaining the industry’s living-wage positions. “Although workers of color account for almost 45% of the restaurant industry’s workforce nationwide — compared to 33% of the rest of the economy — they are largely underrepresented in the highest-paid, coveted front-of-the-house positions, known as Tier I positions,” according to the report.

Traliant Insight
Rosebud’s $1.9 million settlement and other recent cases (Sealy mattress, discussed in a previous post, and Tesla and Fox News) are strong reminders of the economic and reputational cost organizations face for allowing unlawful racial discrimination and harassment to perpetuate in the workplace. Preventing workplace discrimination doesn’t happen overnight. It’s a long-term commitment that starts with management’s support for recruiting, hiring and promoting a diverse workforce and investing in anti-discrimination policies, regular training and other resources dedicated to making employees and managers aware of behaviors including subtle and overt bias that violate the law.  

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