A recent $1.9 million settlement by Rosebud Restaurants with the Equal Employment and Opportunity Commission (EEOC) is just one more example of why businesses should proactively adopt strategic hiring rules, an expert on discrimination law says.

“Employers absolutely should be aware that the EEOC is keeping a close eye on the hiring practices of businesses,” Christopher DeGroff, of the Chicago-based law firm Seyfarth Shaw, told the Cook County Record. “Employers should see red flags at the first hint of allegations of hiring discrimination raised with the EEOC, especially those that appear to have a systemic angle.”

Rosebud, which operates 13 Italian restaurants in Chicago and the surrounding suburbs, was accused by the EEOC of refusing to hire African-Americans. The EEOC also alleged Rosebud management used racial slurs to refer to blacks.  

The EEOC further asserted Rosebud violated federal regulations by failing to maintain employment applications for one year and by failing to file employer information reports providing employment data by job category, race, ethnicity and gender.

Regardless of merit, businesses should work to avoid EEOC actions, which can lead to steep settlements.

“A sympathetic jury might result in the employer paying maximum damage caps for each claimant and other monetary relief,” DeGroff said. “Although $1.9 million is certainly a lot of money for any company to pay to end a lawsuit, a trial verdict in favor of the claimants could potentially have well exceeded that figure and would by no means be a record recovery for the EEOC.”

Businesses should protect themselves with well-thought-out hiring practices in order to avoid EEOC involvement.

“A strong, uniformly applied EEO policy can be an effective shield to litigation,” DeGroff said. “The more that EEO concepts are baked in to an employer’s culture, the less likely it will be an EEOC target, and the more likely it can fend off large-scale discrimination lawsuits”

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