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A lawsuit alleging that New York’s Plaza Hotel harassed Muslim and Arab-American employees after the 2001 terrorist attacks has been settled, with management agreeing to pay $525,000 to a dozen workers. The federal lawsuit alleged that Plaza managers called Arab-American employees terrorists after the Sept. 11 attacks, referring to them as “Osama” or “dumb Muslim.” The Equal Employment Opportunity Commission sued the Plaza and Fairmont Hotel Management LP in September 2003. Since then, the Plaza has been sold to Elad Properties, which has closed the hotel for remodeling and plans to reopen it in fall 2006 as a condominium building and smaller hotel. The settlement signed Tuesday by Fairmont covers the company’s 14 hotels nationwide and will be in force at the new Plaza if Fairmont becomes its managing agent, said Sunu Chandy, an EEOC attorney. The settlement also includes additional anti-discrimination training for the hotel staff. Fairmont did not admit liability. A telephone call to a Fairmont spokesman was not immediately returned. Copyright 2005 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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