Restaurants’ High Employee Turnover Demands Vigilance Against Offensive Speech

employee turnover
Article contributed by Paul P. Rooney, Ellenoff Grossman & Schole LLP

This was, to say the least, a watershed year for sexual harassment in the workplace. In the restaurant industry in particular, it was impossible to ignore the many reports of sexual harassment. The repeated high-profile allegations have highlighted that the restaurant industry has a harassment problem, and the fallout has been significant.

Now, as if restaurants needed any more reasons to maintain a workplace free of sexually provocative or other harassing comments, recent trends highlight one more: such comments can turn almost any employee discharge into an expensive retaliation claim. Considering that the average restaurant turns over 70% (seventy percent) of its workforce each year, that is a risk restaurants cannot afford.

It is a scenario that is common in the American workplace: a few inappropriate comments by one employee, generate a complaint by another employee, who the employer then terminates not long after his or her complaint. How common? The EEOC’s recent analysis of 45,000 sexual harassment complaints found that over two-thirds of complainants reported being retaliated against. Restaurants’ high employee turnover makes that statistic particularly problematic for them.

In industries with low employee turnover, such as finance and insurance where it is less than 2% annually, an employee who makes a discrimination complaint about inappropriate comments is unlikely to be terminated in any given year, let alone within a short time after making a discrimination complaint. By contrast, in a restaurant, where, according to the U.S. Bureau of Labor Statistics, the average turnover is 70%, and about 17% of employee turnover results from involuntary terminations, an employee who has made a complaint about inappropriate comments has a reasonable likelihood of being fired soon after his or her complaint.

What this means, in practical terms, is that the more a restaurant tolerates inappropriate comments or conduct, the more complaints of discrimination or harassment it will receive, and the higher risk of a retaliation claim it will face when it terminates employees, because some of them will have made discrimination complaints not long before their terminations. It is not difficult to find examples of restaurants being hit with retaliation lawsuits because they failed to adequately protect their employees from offensive speech and other conduct.

For example, in July 2018, a $425,000 verdict was rendered against a New York Subway franchisee that fired a store manager the day after she filed a sexual harassment charge with the New York State Division of Human Rights over “crude and vulgar comments” to her by an area manager. Before filing her charge with the state division of human rights the store manager had complained to a variety of executives at the franchisee, which took three weeks to interview her over the harassment allegations.

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Similarly, in August 2018, the EEOC and a West Virginia restaurant agreed to settle, for over $66,000, a lawsuit for sexual harassment and retaliation brought on behalf of two former employees, a female hostess/cashier, and a female server. The EEOC claimed that the women were subjected to unwelcome and offensive sexual remarks and lewdness by male supervisors and coworkers. The EEOC further claimed that in retaliation for her complaints, the restaurant fired the server and reduced hostess/cashier’s hours and the sexually hostile work environment escalated, which led to her resignation.

In October 2018, a company that manages over 30 Applebee’s restaurants in New York paid $100,000 to settle a sexual harassment/retaliation claim brought by the EEOC. The complainant was a transgender individual employed at an Applebee’s who alleged harassment in the form of crude and derogatory reference to the individual’s transgender status, as well as repeated and intentional references to the individual (who identified as female) with a male name and male pronouns. The defendant allegedly failed to stop the harassment and fired the employee. Regardless of the merits of the underlying sexual harassment claim, firing the employee clearly made matters much worse and more expensive for the restaurant than they would have been otherwise.

Importantly, it is unlawful to retaliate against employees who make even meritless complaints, if the employee reasonably believed that they were the victim of sexual harassment. For example, a New York federal court held that four vulgar statements made to an employee did not rise to the level of “sexual harassment,” but that the employer could still be liable for retaliation for firing the employee over her complaint and her efforts to convince fellow employees to be witnesses for her.

Moreover, termination is not the only form of retaliation employees can sue over. In fact, any negative action that would cause a reasonable employee to be deterred from bringing a discrimination complaint, could be considered unlawful retaliation. That could include things like changing shifts, changing duties, reprimands, negative evaluations, or even yelling at the employee in the presence of others. That means that all such actions, which should be routine (except for, perhaps, the yelling) could become potential landmines.

Unquestionably, no restaurant, or other employer for that matter, can realistically be expected to eliminate all inappropriate, vulgar, sexist, racist, or otherwise discriminatory speech. So why even try to do so? Restaurants need to try harder than other businesses because their high employee turnover makes it far more likely that a termination will tee up a retaliation claim than in other businesses.

Practical steps restaurants can take to minimize their risk include the following:

  • Emphasize to managers the need to police inappropriate comments;
  • Warn anyone whose behavior generates a discrimination complaint not to retaliate against the employee who complained, even if the complaint lacks merit. Again, if the employee reasonably believed discrimination laws were broken, their complaint is protected under the law;
  • Keep a record of all complaints of discrimination; and
  • Ensure you have documented evidence to support termination of any employee, but especially any employee who recently made a complaint.

Policing speech is challenging in any workplace, especially those like restaurants where youth and irreverence are the rule not the exception. But it is even more challenging to have routine employee discharges and other actions, turned into unnecessarily risky and potentially costly ordeals for no good reason.


EGS LLC Paul RooneyPaul P. Rooney is a Partner at Ellenoff Grossman & Schole LLP.  He specializes in employment law and civil litigation, and advised clients about their legal rights and responsibilities, drafts employment agreements, handbooks, and policies, and performs employment-related corporate due diligence. His cases have included numerous collective actions under The Fair Labor Standards Act, and claims under Title VII of the Civil Rights Act of 1964, and The New York State and City Human Rights Laws. Mr. Rooney has also litigated cases involving covenants not to compete, claims of breach of contract and breach of fiduciary duty, and defamation. Mr. Rooney can be reached at (212) 370-1300 or prooney@egsllp.com.