The consent decree, filed in U.S. District Court in Atlanta, settles a government lawsuit contending Cracker Barrel violated the 1964 Civil Rights Act by "engaging in a pattern or practice of discrimination against African-American customers" at dozens of restaurants.
"To discriminate on the basis of race in the provision of food and service tramples most gravely not only on the civil rights laws, but also our nation's promise of equality," said R. Alexander Acosta, assistant attorney general for civil rights.
Cracker Barrel promised to take a number of steps to end its discriminatory practices but did not admit any wrongdoing and will pay no fines or penalties, spokeswoman Julie Davis said.
"This moves us forward in a direction we were already going," Davis said. "It allows both sides to avoid protracted and costly litigation."
Cracker Barrel Old Country Store Inc., based in Lebanon, Tenn., has been the target of several lawsuits filed by black customers who say they received poor service compared with white patrons. Their claims include exceedingly long waits for tables and being segregated in restaurants.
The Justice Department found evidence of similar problems at more than 50 restaurants involved in its investigation in Alabama, Georgia, Louisiana, Mississippi, North Carolina, Tennessee and Virginia. Acosta said 80 percent of the employees or former employees interviewed in the probe said they had witnessed or experienced discriminatory treatment at Cracker Barrel restaurants, with managers often directing or condoning the behavior.
The agreement, which will last five years, has no direct effect on those lawsuits, Davis said. But it does require the chain's employees to undergo expanded racial diversity training and improves procedures to investigate patrons' complaints.
The company also will hire an outside firm that will send undercover customers into restaurants to check on Cracker Barrel employees.
"We do not tolerate any form of discrimination," said Donald M. Turner, Cracker Barrel president and chief operating officer. "It is, and always has been, a violation of our policies and procedures and is neither condoned nor allowed."
Cracker Barrel operates 497 restaurants in 41 states. It had $1.9 billion in sales last year.
By Curt Anderson