A fast-food restaurant operator has lost its bid to overturn U.S. District Court sanctions leveled against it for failing to participate in a mediation in good faith.

In Nick vs. Morgan Foods Inc., 270 F.3d 590 (8th Cir. Nov. 5, 2001), a KFC restaurant operator filed a limited appeal to contest only the sanctions levied against the company, and then only those paid to the court clerk.

The narrowly drawn appeal dealt with the decision of St. Louis-based U.S. District Court Judge Rodney W. Sippel at 99 F. Supp.2d 1056 (E.D. Mo. May 30, 2000).  [See an article by the author at 18 Alternatives 201 (November 2000).]  Sippel issued sanctions payable both to the plaintiff employee, Gee Gee Nick, and the court, by both the appellant and its attorney.  The attorney didn't challenge the sanction in the Eighth U.S. Circuit Court of Appeals, and the appellant only challenged the court sanction.

The facts are not in dispute.  The plaintiff filed suit against the appellant employer, claiming sexual harassment and retaliation in violation of Title VII of the Civil Rights Act of 1964.  The appellant was represented throughout the early stages of the case, including mediation, by outside counsel. But all business decisions were made by the restaurant management company’s in-house counsel.