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Fifteen years after it was first accused of mistreating minorities, the stigma still lingers at Cracker Barrel Old Country Store — belying the welcoming facade created by rocking chair-filled porches at the chain’s restaurants. Numerous lawsuits and a federal inquiry later, the company has taken steps to rebuild its folksy image. Some measures were required by a settlement with the Justice Department after it investigated Cracker Barrel’s treatment of minority customers. But the company also has launched new outreach to minorities on its own, including a program begun this year to help Spanish-speaking employees learn English. The moves are an effort to recover from long-standing complaints of racist and anti-gay behavior that included claims of refusing to serve black customers, discriminating against minority workers and firing gay employees. Critics credit the company, based in the Nashville suburb of Lebanon, with moving in the right direction but say there is still work to be done. “From what I’ve seen, these people have taken steps to proactively address problems they’ve had in the past,” said Gerry Fernandez, president of the Multicultural Food Service and Hospitality Alliance, a group that promotes diversity in the restaurant industry. Cracker Barrel, a subsidiary of CBRL Group Inc., last year agreed to pay $8.7 million to settle federal lawsuits in Georgia that alleged black customers were subjected to racial slurs, denied service or segregated in smoking sections. Last year, Cracker Barrel settled a Justice Department lawsuit with similar claims by agreeing to a number of operational changes but without admitting wrongdoing or paying fines or penalties. Cracker Barrel was ordered to improve its employee diversity training, create a new department to investigate discrimination complaints and hire an outside expert and testing company to make sure it complies with the settlement. Despite the controversy that’s bruised the image of a company built on a Norman Rockwell image and down-home cooking, CBRL Group has seen its current share price hover near its mid-1990s peak — $42 per share, said Sue Perram, a restaurant analyst for Nashville-based Avondale Partners. The stock had bottomed out near $10 per share between 1998 and 2000 during the height of the lawsuits alleging racism. Perram said Cracker Barrel has done well because it’s unique and more affordable then other casual dining outlets. “It’s a different kind of dining experience,” she said. “The average check is around $8. It’s a lot less expensive than you might think.” CBRL Group posted only a 3.1 increase net income for the third fiscal quarter ended April 29 over the same period last year. Revenue was up 7 percent to $628 million, an increase of 7 percent, but short of the $633.5 million targeted by analysts. Cracker Barrel grew from one restaurant in Lebanon in 1969 into 526 full-service restaurants and gift shops in 41 states, mostly in the Southeast, Midwest, Mid-Atlantic and Southwest. It went public in 1981. Chris Tomasso, vice president of marketing, noted Cracker Barrel is a sponsor of several minority-oriented groups and events, including the 100 Black Men of America conference in New Orleans this month. But he added the sponsorships were under way before the lawsuits were settled. The company has also joined two other restaurant chains to test Sed de Saber (Thirst for Learning), an interactive learning program to teach English to Spanish-speaking employees. “There are activities we’ve been doing all along that we don’t normally talk about,” Tomasso said. “We’re not out there beating our chests and saying how great we are. … We like to think our work and efforts will speak for themselves.” Those efforts are still viewed with some skepticism in some quarters. “Cracker Barrel has come a long way, but they still have a long way to go,” said Daryl Herrschaft, a deputy director with the Human Rights Campaign, a gay and lesbian advocacy group. Cracker Barrel was accused in the early 1990s of dismissing some gay workers. A leak of a Cracker Barrel executive’s memo saying managers should fire employees who didn’t “demonstrate normal heterosexual values” sparked protests from gay rights groups. The company eventually renounced the memo and adopted policies protecting gay employees. “We’re gratified they reversed course and added sexual orientation to their hiring and nondiscrimination policy,” Herrschaft said. “It did take them almost 10 years to do so. I think there’s a lot of gays who still cringe when they drive by that Cracker Barrel sign on the highway.” Cracker Barrel’s lingering image problems led the Brooklyn borough president to rescind an invitation this spring to look at building new restaurants there after black and gay leaders criticized the idea. Indeed, overcoming such image problems can hobble a company for years, said Bruce Barry, professor of management at Vanderbilt University’s Owen Graduate School of Management. “It’s a very tough thing to get rid of a stigma like that, and it doesn’t help when you’re slow to act and react,” Barry said. “It was 11 years before they adopted a nondiscriminatory policy toward gays. And in these recent lawsuits, they admitted no wrongdoing. When you add all this up, it doesn’t help.” Joseph Lowery, chairman of the Atlanta-based Coalition for the People’s Agenda, an alliance of 36 civil rights groups and churches, said Cracker Barrel recently opened a location near a black neighborhood in west Atlanta. Lowery has been to the restaurant and said the store, which has black management and employees, has been well-received by the community. “I’m sure there’s still negative vibrations,” Lowery said. “You’re not in the middle of litigation this week and everything is wine and roses the next. It takes a while for word to get around. They’re making a start, though.” Copyright 2005 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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