Paula Deen Settles Bias Lawsuit That Toppled Food Empire

Celebrity chef Paula Deen of Savannah, Georgia today settled the federal job-discrimination case that led to her admission that she’d used a racial slur decades ago, testimony that prompted the collapse of much of her empire.

The terms of the settlement weren’t disclosed in the one-sentence statement filed today in court U.S. District Court in Savannah announcing that all parties had agreed to dismiss the case.

The suit was filed last year by a white woman, Lisa Jackson, who had worked for five years managing a Savannah area restaurant co-owned by Deen and brother, Earl “Bubba’’ Hiers. Jackson alleged that she had been subjected to a hostile work environment full of sexual impropriety, boorish behavior and racist and sexist remarks.

Last week U.S. District Judge William T. Moore dismissed the race claims. He ruled that as a white employee, Jackson could not sue for the anti-black bias she claimed Hiers showed at the restaurant, “Uncle Bubba’s Oyster and Seafood House.’’ Jackson never claimed she had been retaliated against for complaining about work conditions, which could have given her the right to sue.

Settled today were the remaining complaints, including gender discrimination.

“The matter has been amicably resolved,” Jackson’s lead lawyer, Wesley Woolf, said in an e-mail. He declined further comment.

Deen said in a statement issued through her publicist that she is “working to review the workplace environment issues that were raised in this matter and retool all of my business operations.” She acknowledged no wrongdoing.

Contracts Canceled

Moore’s ruling came too late to spare Deen from being questioned about her racial attitudes at a deposition in May. News coverage of excerpts from that, plus her inability to redeem herself in video apologies and an appearance on the Today show, led Wal-Mart Stores Inc., Target Corp. and other companies that sold her products, to cancel their contracts with her. The Food Network, where her ratings had already been dropping, also decided not to renew her contract.

She then fired her original, all-local legal team and hired a team headed by Washington-based litigator Grace Speights, managing partner of the Washington office of Morgan, Lewis & Bockius on July 11.

Before filing suit, Jackson’s lawyer Woolf wrote a demand letter to Deen’s corporate attorney, James Gerard, on January 31, 2012, asking for $1.25 million and threatening publicity that would cost her far more if she didn’t settle. The defense said Jackson’s claims were false and refused to settle.

Deen maintains her flagship restaurant in downtown Savannah, The Lady & Sons, and is 51 percent owner of Uncle Bubba’s, 7 miles away. She also sells products from her Web site.

Her business took a lesser hit in January 2012 when she announced that she had been diagnosed with Type 2 Diabetes, a potentially deadly condition linked to the sort of fatty, sweet foods she favored. She had been diagnosed years earlier, and made it public at the same time she announced an endorsement arrangement with Norvo Nordisk, for its anti-diabetes drug.

The case is Jackson v. Deen, 4:12-cv-0139, U.S. District Court, Southern District of Georgia.

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