NEW YORK (WABC) -- A Manhattan bar agreed Wednesday to pay $500,000 to current and former employees who claimed managers called them "cows," remarked on their underwear, rubbed against them, and used racial slurs to refer to colleagues.
The bar, Sweet and Vicious in Nolita, maintained what the Attorney General's Office called "a hostile and discriminatory workplace" that subjected employees to sex discrimination, sexual and gender-based harassment and race and national origin discrimination.
The owners, Hakan Karamahmutoglu and 5 Spring Street Corp., were accused of making inappropriate comments regarding employees' race, sexuality, bodies and appearances.
Employees suffered unwelcomed sexual advances from managers and customers, according to Attorney General Letitia James.
"This settlement is a reminder that no matter the perpetrator, we will not tolerate sexual harassment, discrimination, or wage theft of any form in the workplace," she said. "For far too long, workers in the hospitality industry have been forced to weather a pervasive culture of sexual harassment and discrimination that has gone unreported."
The agreement is the culmination of a 16-month investigation into allegations against Karamahmutoglu and Sweet and Vicious.
Documents, records, and interviews with current and former employees revealed a pervasive culture of discrimination and repeated pattern of harassment, the Attorney General's Office said.
According to investigators, Karamahmutoglu routinely insulted female employees, calling them "bitches," and "cows," and scrutinized their appearance, commenting on their bodies and clothing.
Officials said multiple female employees were sexually harassed by male managers who made unwanted sexual advances, including an instance of an employee announcing the color of a female bartender's underwear and saying he wanted to engage her in a sexual manner, as well as a manager repeatedly finding opportunities to rub himself up against a female employee.
Several female bartenders said they experienced frequent harassment by violent customers who would threaten to stab, rape, and beat them.
"I wish I could say this was the first time I was harassed by my employer in the service industry, or even the first time I've received a settlement for nonpayment of wages," said Veronica Leventhal, a former Sweet and Vicious employee. "This case is emblematic of intersecting national problems: the subjugation of workers, and sexual harassment of women in the workplace. Sweet and Vicious is not an anomaly. It is a prime example of how men with unchecked power take advantage of their employees."
Karamahmutoglu allegedly called Black employees "gangsters" and referred to a Puerto Rican manager as a "terrorist," and "Puerto Rican trash."
The owner and managers also frequently used anti-gay slurs, officials said.
In addition to paying $500,000 to the workers, the agreement requires the revision of anti-discrimination and harassment training materials and the display and distribution of notices regarding anti-discrimination and harassment rights and responsibilities.
Sweet and Vicious will also be subject to periodic monitoring and oversight, including the submission of reports to the Attorney General's Office to certify compliance.
"The time that I spent working at Sweet and Vicious has reinforced traumas that I will undoubtedly spend years trying to overcome in therapy," said a former worker identified only as former employee # 2. "It was, without a doubt, the most abusive company that I have ever had the misfortune of working for. The racial, sexual and gendered humiliation and degradation that myself and my coworkers silently endured is more than anyone should ever have to experience while trying to earn a livable wage."
Karamahmutoglu released the following statement after the settlement was announced.
"I am deeply distressed by the allegations as they do not reflect my perspective or character, and they do not reflect the attitude of the bar to its employees or customers. Many of the claims are simply untrue, or grossly misleading. I fully cooperated with the Attorney General's investigation and I signed the settlement agreement to bring closure to this episode and to allow all parties to move on. I've been a part of this community for more than 25 years. Sweet & Vicious has always strived to create a welcoming atmosphere for all of its employees, staff, vendors, and customers. I've given back to the community and city that I love and have employed hundreds of employees across all backgrounds. We will continue to welcome everyone into a positive and inclusive environment. Those who know me will know that to be true, and I ask those who do not know me to not rush to judgment. I and S&V look forward to working with community partners to create positive relationships and to serve our diverse patrons with quality service while retaining employees that share in its mission."