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Suit against Outback grows

By SCOTT BARANCIK
Published April 5, 2007

A federal labor investigation that began when two former Outback Steakhouse employees complained of alleged sex discrimination has ballooned into a nationwide lawsuit with more than 150,000 potential plaintiffs, including nearly every woman who has worked at one of the Tampa chain's 700 U.S. restaurants since 2002.

The scope of the legal battle wasn't immediately apparent in September when the Equal Employment Opportunity Commission filed suit against Outback on behalf of two Colorado women and others "adversely affected." Outback, which denies the EEOC's allegations of discrimination, says the federal agency initially planned to limit the potential plaintiffs to a 20-store, tristate area run by the same regional manager.

But the EEOC says it always meant to pursue a national claim against Outback, the oldest and largest of eight chains owned by Tampa's OSI Restaurant Partners Inc. And last month, a federal judge in Colorado agreed. If Outback's appeal of the ruling fails, it will have to fork over the name, address, gender, job description and salary history of more than 300,000 current and former U.S. employees. Roughly half are women and will be invited to join the discrimination suit.

EEOC lawsuits are rare. In fiscal 2006, the agency received 75,768 separate discrimination charges nationwide but filed only 403 lawsuits, or about one for every 190 complaints. Only a small fraction targeted Fortune 500 corporations like OSI.

"We file relatively few suits, so we take it pretty darn seriously when we do," said Mary O'Neill, the managing attorney within a six-state EEOC region that includes Colorado.

Moreover, the timing could hardly be worse for Outback. The steak house chain is battling an image problem among turned-off female diners and saw its president resign last week after just three months on the job. And parent company OSI is just weeks away from a shareholder vote on a controversial $40-per-share offer to convert from a publicly traded to a privately owned corporation.

The complaints

A national class-action lawsuit seemed unlikely back in 2003, when Jennifer Turner-Rieger filed an EEOC complaint against her former employer of more than 10 years. According to court filings, Turner-Rieger began her Outback career as a waitress in the Denver area. She eventually was promoted to a management position overseeing servers, hostesses and the bar - one of three top positions at the store level. But the promotion came only after she assured regional manager Tom Flanagan, who allegedly had told staff that "cute girls" should remain servers, that she wasn't planning to have children.

Kelly Altizer experienced a similar career arc at a nearby Outback. But like Turner-Rieger, she says she was paid less than her male colleagues and finally quit after repeatedly being denied the chance to become a store manager. Both women sought hundreds of thousands of dollars from Outback during initial settlement talks.

Only three of the 64 management positions within Flanagan's region were held by women, the EEOC says. All kitchen managers were men, and only one store manager was female.

Though an Outback spokesman declined to comment Wednesday, the company says each of its 58 regional managers makes hiring, training and promotion decisions based on merit, not gender. Outback says the EEOC is merely on a "fishing expedition," and the company is seeking to have the lawsuit dismissed.

EEOC wants records

The intensity of the fight may only increase.

After receiving data on the roughly 3,500 women who currently or formerly worked at an Outback in Flanagan's region, the EEOC sent each an invitation letter. So far, 95 have said they want to join the suit. The EEOC projects that several thousand women would choose to join the suit nationwide if asked.

Recently, in response, Outback began asking some of the 95 women to sign releases for their medical, prescription and mental health records, last seven tax filings and employment and education histories.

The EEOC is seeking personnel files for many women, as well as detailed information on Outback's internal human resources policies.

More suits ahead

Last week, the EEOC filed suit against Fleming's Prime Steakhouse & Wine Bar, an Outback affiliate, after a married male chef-owner in Scottsdale, Ariz., was accused of harassing male employees.

Class-action lawsuits against Fortune 500 companies are likely to increase, thanks to a year-old EEOC decision to focus on bigger targets, said O'Neill, the EEOC's regional managing attorney. "You can really be more effective with your resources if you take on large organizations that seem to have problems."

Times staff researcher Carolyn Edds contributed to this report. Scott Barancik can be reached at barancik@sptimes.com or 727 893-8751.

Q&A 

The lawsuit 

Why is the EEOC pursuing Outback?

The Equal Employment Opportunity Commission recently decided to focus more energy on bigger targets, and the agency says it has evidence of a pattern of sex discrimination at Outback Steakhouse.

How many women could be affected?

More than 150,000 current or former Outback employees will likely be invited to join the suit.

What happens next?

The court will reconsider Outback's argument that only employees within a 20-store region should have the option to join.

[Last modified April 5, 2007, 06:29:42]