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Owner of IHOP restaurants settles sexual harassment lawsuit

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MILWAUKEE — The owner of 17 International House of Pancakes restaurants in the Midwest, together with a management consulting firm owned by his wife and retained by the restaurants, will pay a total of $65,000 to settle a sexual harassment lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC).

The EEOC had charged that two teenaged employees at a Racine IHOP restaurant were sexually harassed, both verbally and physically, by their assistant manager.

The EEOC’s suit, EEOC v. Management Hospitality of Racine, Inc., Flipmeastack, Inc. and Salauddin Janmohammed, was filed by the EEOC in 2006. The Racine store, operated by Management Hospitality of Racine, was one of 18 IHOP restaurants located in
Illinois, Wisconsin, Iowa, Indiana and Michigan owned by Salauddin Janmohammed, and given management consulting service by Flipmeastack, a company owned by his wife. Janmohammed had sold the Racine IHOP and was named as a relief defendant only because of the sale and his former ownership interest.

The case was tried in U.S. District Court for the Eastern District of Wisconsin in Milwaukee in November 2009, resulting in a jury verdict for $105,000 to the two claimants. Relief was awarded against Flipmeastack after a post-trial ruling that it was liable for the harassment because it had control over the employees at the Racine IHOP.

After defendants appealed to the U.S. Court of Appeals for the 7th Circuit, the case was
remanded to the District Court for a new trial on the issue of whether Flipmeastack exercised sufficient control over the employees of the restaurant to make it liable for the harassment. The parties then resolved the case without a trial on that issue.

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