A federal judge has entered final judgment in a sexual harassment lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC) against Flipmeastack, Inc., an Illinois-based restaurant company that manages a group of IHOP restaurants, the agency announced today.  The restaurants were owned by franchisee Salauddin Janmohammed.  Flipmeastack is owned by Salauddin’s wife, Victoria Janmohammed.

The August 31 decision by U.S. District Judge Lynn Adelman ordered the company to create a new sexual harassment training program; post a toll-free number in its restaurants for employees to make sexual harassment and discrimination complaints; and report to the EEOC any complaints of sexual harassment for the next four years.  

The August 31 decision also affirmed the jury verdict in the EEOC’s original case, rendered in November 2009, which awarded $105,000 to two teen servers who, the jury found, were harassed by their manager at an IHOP formerly operated by Flipmeastack in Racine, Wis., in 2005.

The decision and order in Equal Employment Opportunity Commission v. Management Hospitality of Racine, Inc., et al., Case No. 06-C-0715 (E.D. Wis.), stated that Flipmeastack was the employer of the two teens for purposes of federal sex discrimination law, along with the company that held the franchise, Management Hospitality of Racine, Inc. (MHR).  Flipmeastack had argued it was not responsible for the harassment.   The EEOC argued otherwise, and the court agreed, finding that  Flipmeastack’s control over the restaurant’s workers made it liable even though they were paid by MHR.  

The court also found that Salauddin Janmohammed was responsible for damages up to the amount of cash he received when he sold Management Hospitality of Racine in 2006, $15,000.

“This case demonstrates that liability for employment discrimination is not limited to just one part of a larger business, if that larger business has control of the workplace,” said John Hendrickson, regional attorney for the EEOC’s Chicago office, which oversees the Milwaukee Area Office.  “Discontinuing a business also may not bar liability later.  Businesses need to understand that employees are protected, and employees need to understand that the EEOC will pursue that protection in today’s world of complex business arrangements.”