Hooters of America, LLC, has agreed to pay $250,000 to settle a race and color discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission in North Carolina, per an Oct. 22 announcement.
The wing franchise laid off about 43 employees in the Greensboro area in response to the COVID-19 pandemic. Hooters later rehired workers in May 2020, with 92% of those rehired Hooters Girls either being White or having lighter skin tones, according to EEOC’s complaint.
“The lawsuit also alleged that Hooters Girls with dark skin tones experienced racial hostility and observed preferential treatment of White employees while employed at the restaurant,” the EEOC said.
Both instances of alleged discrimination violate Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on both race and color.
Previously, Hooters did not respond to HR Dive for comment on this case.
Precedence for workplace issues
This is not the first time Hooters has come under fire for discrimination or for allegedly mishandling layoffs.
Last April, Hooters settled with the U.S. Department of Justice regarding alleged national origin discrimination, which violated the Immigration and Nationality Act. Management at a Destin, Florida, location refused to accept a candidate’s Form I-9 documentation.
And in 2020, a U.S. District Court for the Middle District of Florida found that Hooters violated the Worker Adjustment and Retraining Notification Act or WARN Act. The plaintiffs alleged that Hooters failed to give them and 679 other employees the proper 60-day notice for mass layoffs.
At the onset of the pandemic, Hooters’ former CEO said in a statement that the companies’ dining rooms closed and the company’s “revenues more than halved.”
“We and our franchisees have had no alternative but to dramatically reduce the size of our work force in response,” Terrance Marks said. “Parting ways with friends under these conditions is incredibly painful for all involved. It is our fervent hope that conditions soon permit us to welcome our colleagues back.”
The current consent decree for Hooters
Along with paying $250,000 in damages to Hooters Girls, the three-year decree, which covers four North Carolina locations, prohibits Hooters from making decisions around layoffs and recalls or rehires based on race or color in the future. The decree also bans Hooters leadership from “using standards that allow for subjective determinations based on race or color,” EEOC said.
Annual trainings, compliance reports and moves to “reassure the public that Hooters is an equal opportunity employer” via social media posts are also a part of the agreement going forward.
A regional attorney for the EEOC’s Charlotte District Office called the $250,000 resolution “powerful” and said it “serves the public interest,” along with providing relief to affected parties.