LEBANON Tenn. Cracker Barrel Old Country Stores Inc. is suing two insurance carriers for allegedly refusing to reimburse the family restaurant operator for the $2 million it paid to settle a sexual and racial harassment lawsuit, according to press reports.
The 550-unit chain operator is also seeking payment by the insurers of legal costs incurred in addressing the suit, which included the U.S. Equal Employment Opportunity Commission as a plaintiff. The amount was not disclosed.
Cracker Barrel, a holding of CBRL Group Inc. here, was sued in 2004 by female employees of three branches in Illinois for alleged sexual harassment and racial discrimination. The women accused male co-workers and managers of making sexual advances and offensive sexual comments as well as inappropriate touching. They also accused management of not taking their complaints seriously. Black employees at the same Illinois restaurants allegedly endured racially charged language in the workplace.
Cracker Barrel apparently struck a deal to settle the lawsuit and asked Cincinnati Insurance Co. and Houston Casualty Co. to provide the agreed-upon $2 million. But the insurers refused, asserting that the restaurant operator's policy did not cover that situation. Cracker Barrel paid the money itself, according to the news reports.
"The filing outlines our position that two insurance companies are not honoring the contractual commitments they made with our company," said Cracker Barrel spokesman Jim Taylor. "Although we consider litigation to be a last resort, it's our responsibility to protect our business interests."