According to the Chicago Tribune, the chain has to pay $160,000 to settle a race discrimination suit and set up race sensitivity training for its employees.
The suit was filed by a black couple in Illinois. They said Pizza Hut refused to serve them after they arrived for a child's tenth birthday party, even though they had called in an order for five pizzas.
Parents of other children invited to the party joined in the lawsuit.
As part of the settlement, the families and Pizza Hut agreed not to comment.
"According to the court papers, Pizza Hut, which employs some 100,000 people in 7,100 company- and franchise-owned stores, agreed to conduct sensitivity training for every employee who will come into contact with the public," the Tribune said.
The Dallas-based chain, owned by Tricon Global Restaurants , also agreed to pay 20 plaintiffs in the suit a combined $160,000 and may have to pick up the legal fees, the paper reported.
Lead plaintiffs Jacqueline and Curtis Randle El said they were turned away from the Midlothian restaurant in the summer of 1996 when they tried to celebrate a son's 10th birthday after 10 p.m. although they had phoned in an order for five pizzas before arriving, the Tribune reported. Parents of other children invited to the party joined in the lawsuit, the paper said.
The restaurant manager said the restaurant closed early that night because one waitress left work sick and pizza dough supplies ran out, the Tribune reported.
U.S. District Judge Blanche Manning rejected Pizza Hut's request earlier this year to dismiss the suit, noting that evidence indicated the restaurant was open for three hours after the waitress left work, the paper said.
The judge said the restaurant's computerized register receipts showed that 35 pizzas were delivered after the Randle Els were turned away, the Tribune reported.
Under mutual agreement, the details of the May settlement were to have remained confidential. But the Tribune obtained a copy of the 14-page document after it appeared in a public file in the federal court, the paper said.
The plaintiffs had attached the settlement papers to a court filing made last week, and court records show Manning rejected their request that the document be sealed and kept from public view, the paper said.
A Pizza Hut spokesman would not confirm plans to launch a nationwide racial-sensitivity training program.
"We entered into a settlement agreement and the terms of the agreement were confidential," Jay Allison, director of public relations for Pizza Hut, told Reuters in a telephone interview.
"We're going to continue to hold to the confidential nature of that settlement and not discuss anything."
The Tribune quoted lead attorney for the plaintiffs, Fay Clyton, as saying: "I can only say that the matter was settled to our mutual satisfaction."
Pizza Hut last year settled a similar lawsuit alleging racial discrimination involving a restaurant in Godfrey, Ill., the paper said.