Cracker Barrel Sues its Insurance Companies
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Cracker Barrel Old Country Store has sued two of its insurance companies for failing to reimburse the restaurant chain for the cost of defending itself against a federal lawsuit which led to a two million dollar settlement.
Cracker Barrel claims that, before it agreed to the settlement, it repeatedly consulted with the insurance companies it had hired to defend it against the claims raised in the federal lawsuit.
The claim against Cracker Barrel involved sexual and racial harassment claims. The EEOC filed a lawsuit against Cracker Barrel in August 2004 after its investigation revealed multiple incidents of sexual harassment of female employees in three Illinois restaurants. In addition, the EEOC found harassment and other discrimination against black employees.
The EEOC claimed that the harassment of women at the Cracker Barrel facilities included circulation of pornographic photographs and cartoons, obscene jokes, sexual propositions, groping, and sexual assaults.
The EEOC investigation found that the managers of Cracker Barrel not only refused to investigate or act upon the complaints of harassment but also "became personally involved in it by grabbing female employees, propositioning them, and laughing at their complaints."
Cracker Barrel settled the claims of fifty-one employees and agreed to pay them a total of two million dollars collectively.
In the recent suit brought by Cracker Barrel for failure to honor insurance policies it purchased, Cracker Barrel claimed that the Cincinnati Insurance Company and the Houston Casualty Company breeched their contract by refusing to honor the obligations called for in their insurance policies.
Cracker Barrel now has over five hundred twenty-five stores in more than forty states. In 2005, Cracker Barrel took in revenues of over 2.6 billion dollars.