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Dairy Queen Franchisee Held in Contempt for Breaching Agreement with EEOC on Teen Sexual Harassment Case

Federal Judge Imposes $1,000-Per-Day Fine to Induce Company to Comply

WINSTON-SALEM, N.C. - The U.S. Equal Employment Opportunity Commission (EEOC) announced today that YS&J Enterprises, Inc., which operates a Dairy Queen restaurant in Winston-Salem's Hanes Mall, has been held in civil contempt by a federal judge based on its breach of the terms of an agreement it entered into with the EEOC to resolve a sexual harassment lawsuit.

In December 2011, the EEOC filed a lawsuit against YS&J Enterprises, Inc., (EEOC v. YS&J Enterprises, Inc. d/b/a Dairy Queen, Civil Action No. 1:11 CV 01103, U.S. District Court for the Middle District of North Carolina), charging that the company subjected an 18-year-old female employee, Chastity Hill-Cox, to a sexually hostile work environment. The lawsuit further charged that the company fired Hill-Cox after she complained about the harassment to the restaurant's manager.

In settlement of the EEOC's lawsuit, the company entered into a consent decree with the EEOC, which was signed and entered by U.S. District Court Judge James A. Beaty, on October 24, 2012. The decree required the company to pay $17,500 in relief to Hill-Cox as well as furnish significant remedial relief. Specifically, the company was enjoined from further subjecting employees to discrimination based on their sex or from retaliating against employees for opposing such discrimination. The decree also required the company to redistribute its policy prohibiting sexual harassment and retaliation to managers and supervisors; conduct anti-discrimination training for managers and supervisors; post a notice about the settlement; and report internal sexual harassment and/or retaliation complaints to the EEOC.

The company failed to pay the $17,500 to Hill-Cox or meet any other obligations under the consent decree, the EEOC said.

In January 2013, the EEOC filed a motion asking the Court to require YS&J Enterprises, Inc.'s to show cause why it should not be held in contempt for failing to comply with the consent decree. After a hearing on the EEOC's motion, the court entered an order on April 10 finding YS&J Enterprises in civil contempt of the consent decree. The order requires the company to immediately comply with all terms of the decree and provides for a fine of $1,000 per day, beginning on April 10, and continuing until the company has fully complied with the decree. The order further provides that if no compliance is secured within 18 days, the EEOC shall file a written Notice of Non-Compliance with the court for further consideration of the matter.

"When the EEOC agrees with an employer to resolve a case, whether through litigation or its conciliation process, the agency fully expects the employer to comply with the agreement," said Lynette A. Barnes, regional attorney in the Charlotte District Office. "The defendant in this case repeatedly ignored the EEOC's attempts to get it to comply, and this contempt order is the result."

Tina Burnside, EEOC supervisory trial attorney, added, "The court's order sends a message to employers that they cannot simply ignore an EEOC consent decree, and are obligated to fully comply with such agreements."

Darryl L. Edwards, the EEOC trial attorney who filed and argued the motion in court, said, "Once an employer agrees to the terms of a consent decree with the EEOC, and that decree is entered by a federal judge, it becomes a court order. The defendant here now has to pay a high price for ignoring its obligations."

The EEOC is responsible for enforcing federal laws prohibiting discrimination in employment. More information about the EEOC is available on its website at