Il Fornaio will pay $3 million to settle a federal sexual harassment and retaliation lawsuit covering at least 100 female workers, many of them teenagers, the U.S. Equal Employment Opportunity Commission announced.

The EEOC filed the suit in 2022 on behalf of a class of female employees who said supervisors harassed them across the Italian casual-dining chain's restaurant locations. The alleged conduct included forceful groping in restaurant bathrooms, repeated grabbing of the women's private parts, requests for sexual favors and explicit references to sexual activities, according to the agency.

When the workers complained, Il Fornaio failed to stop the harassment and retaliated against many of them. Several employees had "no choice but to resign," the EEOC said.

The 15-unit chain is based in Corte Madera, California, and owned by Tokyo-based Create Restaurant Group. The group's U.S. portfolio also includes the Wildflower bakery-café chain and, as of earlier this year, Nova Restaurant Group of Minneapolis.

What does the settlement mean for operators?

The figure at the center of the case: 100 women. "Sexual harassment continues to be a widespread issue in the restaurant industry, and during this case, we learned of at least 100 women negatively affected by Il Fornaio's work environment," said Beatriz Andre, acting regional attorney for the EEOC's Los Angeles district. "Through this settlement, we hope Il Fornaio will take meaningful steps to prevent sexual harassment and respond promptly and effectively when complaints arise."

For multi-unit operators, the case is a reminder of the financial exposure that supervisor-level misconduct and weak complaint response can create — exposure that travels up to the ownership group, in this case a Tokyo-based company with expanding U.S. holdings.

The company's position

Il Fornaio denies the allegations. Matt Foley, the chain's director of marketing, said in a statement that the company took steps to prevent and correct harassment and that there was no companywide pattern or practice of discrimination, harassment or retaliation. The settlement, he said, should not be read as an admission of guilt.

"Il Fornaio takes harassment seriously and will continue to do everything possible to prevent and eliminate harassment in the workplace against all workers," Foley said. "The company prides itself on fostering a positive working environment for its employees, which is reflected in the high number of long-term employees and the low turnover rate for the industry."

He said the chain settled "to avoid the burden, expense, and uncertainty of continued litigation, and has increased its efforts to prevent and eliminate harassment and discrimination of all kinds in the workplace."

The settlement closes a three-year federal case that began in 2022, and Create Restaurant Group will now carry the compliance obligations — and the reputational math — across its growing U.S. portfolio.