Wednesday, December 30, 2009

Outback settlement contains interesting requirements

You may have heard that Outback Steakhouse, a restaurant chain based in Tampa, Florida, has agreed to settle a gender discrimination lawsuit for $19M. What's interesting about this isn't the size of the settlement, but rather the conditions attached.

Background: The EEOC sued Outback in 2006, claiming it systematically discriminated against its female employees by denying them promotion opportunities to the more lucrative profit-sharing management positions. In addition, they claimed that female employees were denied promotional job assignments such as kitchen management, which were required for employees to be considered for top management positions.

The settlement: Outback agreed to a four-year consent decree and $19M in monetary relief. So far, pretty standard. But there were additional settlement requirements, and here's where it gets interesting. In addition to the monetary relief, Outback has agreed to:

1. Create an online application system for employees interested in management positions. This is the first time I've seen this in a settlement (which isn't to say it hasn't happened) and seems to indicate that the EEOC views this as a more "objective" screening mechanism.

2. Create and hire someone for a newly created "human resources executive" position titled Vice President of People. Again, this is a new one for me.

3. Hire an outside consultant for at least two years who will monitor the online application system to ensure women are being provided equal opportunities for promotion and provide reports to the EEOC every 6 months.

The main thing that strikes me about this settlement is the faith that is being placed in an online application system to somehow ensure equal opportunity. Sure, having a standardized application system may cut down on some of the subjectivity of individual hiring supervisors, but it leaves me wondering:

- What will the screening criteria for management positions be?

- How will the outside consultant define "equal opportunities"?

- How will access to the online system be controlled, and who will be making screening/hiring decisions?

- What happens if there continues to be adverse impact, which you would expect if applicants continue to be screened on experience?

- What will be the duties of the Vice President of People, how will they be hired, and how will they interact with the consultant?

This will be interesting to watch.

No comments: