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Holmes & Holmes Industrial Inc., a construction company based in Magna, will pay three former employees a total of $230,000 to settle a race harassment and retaliation lawsuit brought by a federal law enforcement agency, officials said Tuesday.

The U.S. Equal Employment Opportunity Commission took action against Holmes in September 2010, charging that the company violated the rights of brothers Antonio and Joby Bratcher on a job site at the Chevron oil refinery in North Salt Lake.

In a ruling last year, U.S. District Judge Dale Kimball found that the Bratchers and James Buie, all of whom are black, were subjected to an objectively hostile work environment based on race.

The court observed that the site superintendent, Paul E. Facer, used the N-word or a variation of that word in referring to African-American employees almost every time he spoke to them. Other Holmes employees used the same terms, and racially charged graffiti was evident inside and outside portable toilets on the work site.

Kimball wrote that the conduct was "constitutionally offensive in any setting" and concluded that this "is a rare case where there is no dispute as to the pervasiveness of the conduct in question. No reasonable jury could find that a reasonable African-American would not be offended by this conduct."

Such conduct violates Title VII of the 1964 Civil Rights Act, federal officials said.

The judge also noted that the employer's anti-harassment policy was "unreasonable as a matter of law" because it directed workers to report harassment to their supervisor with no alternative means to bypass that person, who was a likely source of the improper behavior.

The $230,000 for the victims is the maximum the company would have to pay if all Title VII claims were won at trial; each will receive $50,000 for compensatory damages, the maximum cap under the 1991 Civil Rights Act, and one victim will receive $80,000 in back pay because he was fired.

In response to the settlement, company owners Michael and Roland Homes said in a joint statement: "Our position has been and continues to be that Holmes & Holmes did not engage in any racial harassment, discrimination or retaliation toward anyone and that the individuals involved in the conduct at issue were friends engaging in mutual, welcome banter.

"However, whether we would have won or lost at trial, litigation is very costly, so there is great value in bringing closure to this dispute now, rather than proceeding to trial. We share the EEOC's belief that the steps we have agreed to take moving forward will enhance our policies, procedures and training program, and will help ensure equal opportunities for our employees."

The company also has agreed to take several steps aimed at addressing and preventing race-based conduct on the work site. They include a comprehensive training regimen for supervisors; discussions of what harassment is on a monthly basis; providing an external ombudsman to receive and investigate complaints of discrimination or retaliation; and a detailed review and revision of Holmes' policies and procedures concerning protected-class discrimination and retaliation.

The EEOC filed suit after first attempting to reach a settlement through its conciliation process, federal officials said.

"Employers have an obligation to protect their employees from the use of racial slurs and epithets," said EEOC General Counsel David Lopez. "This case is our latest in a series of successes to combat racial harassment in the workplace. This conduct has no place nearly 50 years after the enactment of the Civil Rights Act of 1964."

"I am pleased that the investigation of this case was done by our sister agency, the Utah Antidiscrimination and Labor Division — they share in this success," said Rayford Irvin, district director of the EEOC's Phoenix District Office. "I am also proud of our legal team."

The EEOC's Phoenix District Office has jurisdiction for Utah, Arizona, Colorado, Wyoming, and parts of New Mexico, including Albuquerque.

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