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Businesses sued for racial discrimination by feds reap millions in PPP loans

Crusader Staff Report

Rosebud and several Chicago area temporary staffing firms that were sued by a federal agency for allegedly discriminating against Black job applicants, received millions of dollars in loans through the Paycheck Protection Program (PPP), the Crusader has learned.

Rosebud Restaurants, located at 1419 East Diversey Parkway, received a PPP loan between $2 million to $5 million on April 6. Two other PPP loan recipients, temporary staffing firms Personnel Staffing Group, LLC, and MVP Workforce, LLC, each received loans between $5 million to $10 million on April 27 and April 9, respectively.

They were awarded PPP loans two months before the Equal Employment Opportunity Commission announced the firms had agreed to pay nearly $600,000 to settle a racial discrimination lawsuit that accused the businesses of not sending Black temporary workers on work assignments.

According to the PPP list, Personnel Staffing LLC and MVP Workforce, LLC share the same address at a corporate office building located at 1751 Lake Cook Road, Suite 600 in Deerfield, Illinois.

According to the EEOC, Personnel Staffing LLC did business as Most Valuable Personnel (MVP). But Personnel Staffing Group, LLC and MVP Workforce, LLC are listed as the official names of loan recipients on the PPP list that was released by the U.S. Department of Treasury and the U.S. Small Business Administration on July 5.

In 2017, Rosebud agreed to pay nearly $2 million after it was sued for alleged widespread racial discrimination practices by the Equal Employment Opportunity Commission. The next year, The EEOC sued Rosebud again, accusing the popular Chicago eatery of sexual harassment and retaliations.

The awarding of the PPP loans to these companies raises questions of whether companies sued by EEOC are eligible to receive such funds. An applicant is considered ineligible if engaged in anything illegal under federal, state, or local law.

PPP loans were implemented by the U.S. Small Business Administration to help businesses keep employees on their payroll during the coronavirus pandemic. But should businesses that the EEOC sued for denying Black applicants a job be given federal funds to continue operating?

PPP loans do not have to be repaid if they are used to cover payrolls, keep workers and pay for some overheads.

Last month, the EEOC announced that Most Valuable Personnel and MVP Workforce were to pay $568,500 to settle a race and sex discrimination lawsuit that the federal agency filed.

According to the EEOC’s lawsuit, temporary employment agencies MVP and MVP Workforce discriminated against Black and female applicants and employees by refusing to send them on work assignments or by sending them for fewer work hours. The EEOC’s suit charges that the companies did so either on their own initiative or to honor the discriminatory requests of clients who did not want Black workers or sought only men for certain assignments.

The firms are among numerous temp agencies in Chicago and across the country that have been sued in the last decades after they were accused of following their clients’ orders to not send Black workers on temporary job assignments because of their race. Most temp firms and their clients preferred to send Hispanic workers on assignments. Many temporary firms and their clients adopted code words for Black workers to avoid being detected. The problems were documented in a Crusader investigation in 2016.

As part the settlement, both MVP and MVP Workforce agreed on a two-and-a-half-year consent decree. Under its terms, MVP and MVP Workforce are prohibited from engaging in race or sex discrimination in their referrals and from retaliation in the future.

The EEOC said MVP Workforce will adopt a process to identify qualified applicants or employees for temporary work assignments; inform applicants and employees how to complain of discrimination; create and maintain records of all applicant information; provide periodic reports to EEOC about its applicants, referrals, and any complaints of race or sex discrimination; and train employees who are involved in the hiring and assignment process about Title VII.

The EEOC said MVP, which is not currently doing business in Illinois, must implement the same measures if it resumes operations in Illinois.

Rosebud is a popular high-end restaurant that generates big revenues. In 2017, Rosebud paid $1.9 million to settle a class action race discrimination lawsuit filed by the EEOC in 2013.

According to the EEOC’s lawsuit, 13 Italian restaurants operated by Rosebud in Chicago and the surrounding suburbs refused to hire Blacks because of their race.

The EEOC also charged that managers, including Rosebud owner Alex Dana, used racial slurs to refer to Blacks. At the time EEOC began investigating Rosebud’s hiring practices, many of its restaurants had no Black employees at all. While the EEOC said 320 Blacks were discriminated against, the agency believes the number to be much higher after sending 20,000 to 30,000 letters to Rosebud job applicants.

When the EEOC completed its 4-year investigation, they discovered that less than one percent of Rosebud’s 800-900 employee work force was Black. That’s about eight or nine Black people.

According to the EEOC, Rosebud’s Human Resource director is Black, a behind-the-scenes position at a company whose reportedly image-obsessed owner Alex Dana said in a Chicago Reader article that “this is a perception business.”

The restaurants that were covered by the suit included Rosebud; Carmine’s; Rosebud on Rush; Rosebud Prime; Mama’s Boy; Rosebud Steakhouse; Rosebud Deerfield; Rosebud in Naperville; and the closed restaurants Rosebud Old World Italian; Rosebud Theatre District; Rosebud of Highland Park; Rosebud Burger & Comfort Foods; Rosebud Trattoria; Joe Fish; EATT; Bar Umbriago; and Centro.

As part of a four-year consent decree, Rosebud agreed to hiring goals for qualified Black applicants, with the aim that 11 percent of Rosebud’s future workforce be African American. With one-year left on the consent decree, it’s uncertain whether those goals have been met. That information is not released to the public.

Over the years, Rosebud has been sued several times by several of its employees. In 2018, Rosebud paid $160,000 to settle another EEOC lawsuit that alleged sexual harassment and retaliation. The EEOC said the restaurant subjected two female employees to sexual harassment. One of the women was fired after she complained about the harassment and objected to employees using racial slurs when they referred to Blacks.

In 2017, an honorary street sign of Rosebud owner Alex Dana was removed from in front of the flagship restaurant at 1500 W. Taylor St. after a Crusader reporter asked about it. The sign was back up last weekend when a Crusader reporter visited the restaurant. An email to Alderman Howard Brookins, Jr., who chairs the Transportation Public Way and Committee was not returned by Crusader press time Wednesday for its print edition.

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