Jottings By An Employer's Lawyer

Tuesday, December 07, 2004

Harassment Settlement - A Million Whoppers (More or Less)

I once had a client who liked to measure proposed settlement dollars in how much he would have to sell to replace the money he was contemplating paying to make a business problem go away. Liked is probably not the right word, but you understand the concept. The EEOC press release, Burger King Franchise Pays $400,000 for Alleged Sexual Harassment of Teens detailing what it took to settle a case at one fast food restaurant made me do some rudimentary math to figure the cost out in Whoppers.

According to some very surface internet research, profit margins at fast food restaurants in the 2003 time frame were in the 15 to 20% range. (See Chicago Sun story posted at a website for McDonald's franchisees). Apply the 15% figure to a $2.50 Whopper with cheese, and divide that into the $400,000 settlement figure and if my math and theoretical concept are correct, that's a million plus Whopper settlement.

Regardless of the accuracy of either the rationale or the math, there is very little dispute that it will take a lot of burgers to make up for this problem. According to the attorney for the seven workers who brought the suit (six were in high school when the alleged harassment occurred):
The girls complained to several assistant managers who felt helpless to assist them because [the alleged harasser] was their boss, too. They finally figured out how to go over [the harasser's] head, and when they complained to headquarters, they let him resign. The question is why it took four to five months to get reported right.
Under the settlement agreement, the company will do more than pay the $400,000, in addition it:
will conduct extensive sexual harassment training for management personnel, including eight hours of training for several upper-level managers, distribute the revised sexual harassment policy and procedure to all restaurant employees, and more prominently post an 800-number hotline for reporting harassment throughout their restaurants.
Those actions are not without cost, but probably not a million whoppers worth.

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