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Owners can’t dodge liability ‘simply by closing a business,’ EEOC reminds employers

Ginger Christ

3 min read

This story was originally published on HR Dive. To receive daily news and insights, subscribe to our free daily HR Dive newsletter.

  • ‘Murica LLC and its owners agreed to settle for $100,000 a sexual harassment and retaliation lawsuit filed by the U.S. Equal Employment Opportunity Commission in the U.S. District Court for the District of Colorado, according to a news release issued by the agency Monday.

  • The lawsuit, EEOC v. ‘Murica, LLC, alleged that the owner of Western-themed Starlite Station bar and dance hall in Greeley, Colorado, created a sexually hostile environment for workers by frequently touching female employees without their permission, seeking out sexual relationships with female employees, pressuring female employees to let him sleep at their homes, and having sex with an intoxicated worker at the bar, among other actions.

  • In a five-year consent decree, ‘Murica LLC agreed to give monetary relief to the affected individuals, to require equal employment opportunity training for managers and employees, to send an apology letter to those affected, and to have its EEO policies reviewed by a SHRM-certified professional.

“This case demonstrates why owners should not think that they can escape liability simply by closing a business and filing retaliatory defamation lawsuits in an attempt to silence victims,” Mary Jo O’Neill, regional attorney for EEOC’s Phoenix District Office, said in a statement. “The EEOC will vigorously litigate against retaliatory defamation lawsuits and private settlements that seek to prevent communication with the EEOC and obstruct our enforcement of civil rights laws.”

‘Murica LLC closed in November 2021 and has not operated or had employees since, according to the consent decree.

The lawsuit alleged that the owner and his mother, a co-owner, were individually liable because they both used the company for their own personal interests, such as by using corporate funds to pay a home mortgage, a personal loan and personal credit cards. Because of the alleged misappropriation of funds, EEOC argued it could “reach beyond the closed bar and satisfy any judgment with the two owners’ personal assets,” per the release.

According to the complaint, the owner of Starlite Station, a “country restaurant, dancehall, and bar,” allegedly made sexual comments about female applicants, such as stating that they were “too ugly” to be hired or that he had already had sex with them. The owner also allegedly frequently commented on female employees’ weight and appearance and said that female workers who were thin and wore revealing clothing would not be in danger of losing their jobs, while those who didn’t fit his ideal risked discharge or being scheduled for fewer hours, per the complaint.