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Case Name EEOC v. Management Hospitality of Racine, Inc., d/b/a IHOP EE-WI-0033
Docket / Court 2:06-cv-00715-LA ( E.D. Wis. )
State/Territory Wisconsin
Case Type(s) Equal Employment
Special Collection EEOC Study -- in sample
Attorney Organization EEOC
Case Summary
On June 26, 2006, the Equal Employment Opportunity Council's (EEOC) Milwaukee District Office filed suit in U.S. District Court for the Eastern District of Wisconsin on behalf of two female employees and a class of similarly situated employees of the Defendant companies. The three Defendants were: 1 ... read more >
On June 26, 2006, the Equal Employment Opportunity Council's (EEOC) Milwaukee District Office filed suit in U.S. District Court for the Eastern District of Wisconsin on behalf of two female employees and a class of similarly situated employees of the Defendant companies. The three Defendants were: 1) Management Hospitality of Racine, doing business as International House of Pancakes (IHOP); 2) the company's former president; and 3) Flipmeastack, Inc (Flip), an Illinois corporation doing business in Illinois and Wisconsin. The Plaintiff sued under Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e) and Title I of the Civil Rights Act of 1991 (42 U.S.C. § 1981a). Specifically, the Plaintiff alleged that the Defendants engaged in unlawful employment practices on the basis of sex and retaliation, and that the Defendants had subjected female employees to a sexually hostile work environment. It also alleged that at least one female employee had been fired in retaliation for complaining about the way she was being treated. EEOC sought permanent injunctive relief, monetary damages (backpay, benefits, and compensation for emotional pain, suffering, and humiliation), and punitive damages. The case was assigned to Judge Lynn Adelman.

The parties' initially held a settlement conference on January 18, 2007, but the efforts proved futile. EEOC subsequently filed an amended complaint on July 2, 2007 only to add the third Defendant, Flip. After the settlement efforts fell through, the parties focused their efforts on the discovery process, which went on between January 2007 and November 2009.

At the close of discovery, jury trials were finally held in four-parts from November 16 to 19, 2009, and the verdict was for the Plaintiff. The jury ordered the Defendant to pay two claimants $5,000 in compensatory damages and $100,000 in punitive damages. In February 2010, the EEOC subsequently moved for damages and injunctive relief. The Defendants in turn also moved for judgment as a matter of law or in the alternative a new trial or a remittitur (lowering of the damage amount by the judge).

On August 31, 2010, when Judge Adelman ruled in favor of the EEOC and granted its motion while denying the Defendants' motion. He ordered the Defendants to pay the $105,000 in damages the jury had awarded. He did not order payment of attorneys' fees and costs. He also ordered that Flip comply with the following injunctions:

- Prohibit a sexually hostile work environment.
- Create a new sexual harassment program for all employees.
- Provide the EEOC with a proposal for creating the above program.
- Post a written notice informing employees of this order.
- Report to the EEOC of any sexual harassment complaint.
- Maintain records of its compliance with this injunction.
780 F.Supp.2d 802 (E.D.Wis. 2010).

This decision led the parties to cross-appeal: the Defendant appealed on September 24, 2010, while the EEOC cross-appealed on November 1, 2010 to dismiss the case.

While the appeal was pending, the parties encountered further problems. Flip had allegedly failed to comply with three specific parts of the injunction. Judge Adelman held a Contempt Hearing on May 20, 2011 regarding this noncompliance. He held in favor of the EEOC, finding Flip and IHOP's president guilty of civil contempt for violating the injunction entered on August 31, 2010. In addition to ordering that the Defendants abide by the previous injunction order, Judge Adelman added another requirement-- that the EEOC shall be allowed to conduct random inspections of the seventeen restaurants during business hours to ensure that the notices have been posted in accordance with the injunction and this order. 794 F.Supp.2d 921 (E.D.Wis. 2011).

On March 2, 2012, the U.S. Court of Appeals for the Seventh Circuit (Chief Judge Easterbrook, Circuit Judge Bauer, and District Judge Young) made its decision on the parties' cross appeals. The Court of Appeals:
- Affirmed the district court’s denial (from August 31, 2010) of the Defendants’ motion for judgment as a matter of law and motion for new trial with respect to Defendants.
- Reversed the district court’s grant of the EEOC’s Post-Trial Motions.
- Reversed and remanded the judgment against Flip, thereby dissolving the injunction.
- Remanded the decision on punitive damages.
- Confirmed no award of costs.
666 F.3d 422.

Because USCA dissolved the injunction, the parties strived to reach a settlement. On August 14, 2012, the parties submitted to the court a Proposed Settlement Agreement. Judge Adelman approved a Consent Decree a week later, which included all the details of the Agreement. The Decree was set to continue in effect for 2 years. The terms of the Agreement were as follows:

Monetary relief:
- Flip shall pay a combined $65,000 to two female claimants.

Injunctive relief:
- Flip shall not allow a sexually hostile work environment to exist at any of its seventeen restaurants at which it provides restaurant management consulting services. Restaurant management consulting services refer to sexual harassment, diversity and discrimination training, prevention, compliance, and investigation services. Flip shall advise EEOC in writing if any restaurants are added or deleted from that list during the term of the Consent Decree.
- Flip shall provide sexual harassment training for all employees at any restaurants.
- In a conspicuous location in its restaurants, Flip shall post a written notice that explains this lawsuit and employees' rights to complain to the EEOC about sexual harassment.
- Flip shall report to the EEOC within 30 days of any complaint of sexual harassment at any of its restaurants.

Judge Adelman closed the case in 2012.

Jason Chester - 06/02/2008
Sean Mulloy - 02/19/2018
Lisa Koo - 05/27/2019

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Issues and Causes of Action
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Affected Gender
Content of Injunction
Develop anti-discrimination policy
Discrimination Prohibition
Implement complaint/dispute resolution process
Provide antidiscrimination training
Required disclosure
Retaliation Prohibition
Discharge / Constructive Discharge / Layoff
Harassment / Hostile Work Environment
Sex discrimination
Direct Suit on Merits
No EEOC Final Resolution Type
Disparate Treatment
Plaintiff Type
EEOC Plaintiff
Causes of Action 42 U.S.C. § 1981
Title VII (including PDA), 42 U.S.C. § 2000e
Defendant(s) Flipmeastack, Inc
Management Hospitality of Racine Inc (IHOP)
Plaintiff Description Equal Employment Opportunity Commission, on behalf of two former female employees and similarly situated female employees of the two Defendant companies.
Indexed Lawyer Organizations EEOC
Class action status sought No
Class action status outcome Not sought
Filed Pro Se No
Prevailing Party Plaintiff
Public Int. Lawyer Yes
Nature of Relief Damages
Injunction / Injunctive-like Settlement
Source of Relief Settlement
Form of Settlement Court Approved Settlement or Consent Decree
Order Duration 2012 - 2014
Filed 06/26/2006
Case Closing Year 2014
Case Ongoing No
Additional Resources
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Court Docket(s)
E.D. Wis.
EE-WI-0033-9000.pdf | Detail
Source: PACER [Public Access to Court Electronic Records]
General Documents
E.D. Wis.
Complaint [ECF# 1]
EE-WI-0033-0001.pdf | Detail
E.D. Wis.
First Amended Complaint [ECF# 37]
EE-WI-0033-0002.pdf | Detail
E.D. Wis.
Decision and Order [ECF# 184]
EE-WI-0033-0003.pdf | Detail
Source: PACER [Public Access to Court Electronic Records]
U.S. Court of Appeals
Opinion (666 F.3d 422)
EE-WI-0033-0005.pdf | WESTLAW| LEXIS | Detail
Source: Westlaw
E.D. Wis.
Consent Decree and Order [ECF# 236]
EE-WI-0033-0004.pdf | Detail
Source: PACER [Public Access to Court Electronic Records]
show all people docs
Judges Adelman, Lynn S. (E.D. Wis.) show/hide docs
EE-WI-0033-0003 | EE-WI-0033-0004 | EE-WI-0033-9000
Young, Richard L. (S.D. Ind.) show/hide docs
Plaintiff's Lawyers Hendrickson, John C. (Illinois) show/hide docs
EE-WI-0033-0004 | EE-WI-0033-9000
Kamp, Jean P. (Illinois) show/hide docs
EE-WI-0033-0004 | EE-WI-0033-9000
Monahan, Camille A. (Wisconsin) show/hide docs
Pladson, Nicholas J. (Minnesota) show/hide docs
Reams, Gwendolyn Young (District of Columbia) show/hide docs
EE-WI-0033-0004 | EE-WI-0033-9000
Tyndall, Brian C. (Wisconsin) show/hide docs
EE-WI-0033-0004 | EE-WI-0033-9000
Defendant's Lawyers Mihelich, Robert M. (Wisconsin) show/hide docs

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