Lower East Side bar owner fined $500,000 to settle harassment, other claims

The owner of Sweet & Vicious, a Lower East Side bar that’s been serving liquor shots and classic cocktails until early mornings since 1998, has agreed to fork out $500,000 to 16 former employees to settle claims that he “maintained a hostile and discriminatory workplace.” 

The settlement between Hakan Karamahmutoglu and the State Attorney General’s office marks the end of a 16-month investigation that found that the bar’s workers, most of them women, were sexually harassed, called “cows” and “bitches,” and subjected to unwelcomed sexual propositions. 

Female bartenders at the establishment told investigators from the AG’s civil rights and labor bureaus that they were frequently accosted by aggressive customers who threatened to stab, beat and rape them. 

In announcing the settlement July 13, Attorney General Letitia James said Karamahmutoglu “created and perpetuated a hostile workplace where women and people of color were subjected to a pervasive culture of harassment, discrimination and degradation. And he refused, he refused to take any action to stop his own behavior or that of anyone else.”

According to the investigation, Karamahmutoglu, 53, was intent on hiring bartenders who were "tall, blonde, beautiful, and sexy like the women who worked at the bars in Ibiza, the Mediterranean Sea island noted for its nightlife. 

The investigation also noted that black security guards were called “gangsters” and a Puerto Rican manager was referred to as a “terrorist” and “trash.” 

The AG’s investigators found that Karamahmutoglu, who opened Sweet & Vicious on Spring Street just west of Bowery in 1998 when the neighborhood had distinctly more menacing undertones than it does today, obliged employees to work through their shifts without bathroom or other breaks. 

Numerous bar employees said they were not paid out tips left for them on credit cards. Karamahmutoglu and the bar’s managers also frequently used anti-gay slurs, James’ office said in the “assurance of discontinuance” that essentially closed the case.  

Veronica Leventhal, a former Sweet & Vicious employee, said the case was symptomatic of pervasive issues within the service industry.

“This case is emblematic of intersecting national problems: the subjugation of workers, and sexual harassment of women in the workplace,” Leventhal said in a statement accompanying the AG’s announcement. “I would encourage anyone in the service industry to consider unionizing, as it is the only way to create anything close to equitable or safe working conditions. Sweet and Vicious is not an anomaly — it is a prime example of how men with unchecked power take advantage of their employees.”

Katy Guest, another former Sweet & Vicious employee, said at James’ news conference that the service industry is replete with inspirational people creating communities but who often are obliged to endure shabby treatment. “Unfortunately, harassment and unfair treatment is very common in this field. I have said before, service industry employees are treated as second-class citizens,” she said.  “There is often an imbalance of power that leads to systems which enable abuse.” 

Guest called the outcome of the AG’s investigation “a success story” that she hoped will “inspire others to recognize their own self worth and the power of fighting for what’s right."

Similar settlements

In addition to the $500,000 settlement, which does not constitute an admission of guilt on Karamahmutoglu’s part, calls for him to pay a collection fee of 22 percent, bringing the total to $610,000. 

Karamahmutoglu and the bar also agreed to implement anti-sexual harassment and discrimination workplace training to employees. Although those provisions expire within three years, the AG’s office could demand that they be extended if Karamahmutoglu and the bar have not sufficiently complied, according to the assurance of discontinuance. 

Sweet & Vicious will be monitored, including through the submission of reports to the AG’s office, to ensure the bar is complying with terms of the settlement. 

James’ office has in the last two years secured similar settlements from the owners of high-profile food and drink establishments following the same kinds of allegations as those made against Karamahmutoglu and Sweet & Vicious. 

Her office secured a 240,000 and a 10-year profit-sharing arrangement for 11 former employees of Kenneth Friedman’s Spotted Pig just prior to when the Greenwich Village gastropub shut its doors in January 2020. Investigators from the AG’s office found that numerous female employees had been subjected to “severe and pervasive incidents” of unwanted touching and unwelcomed sexual advances by Friedman.

And last year, James’ office reached an agreement with chef Mario Batali and his restaurateur partner Joseph Bastianich that had them pay out $600,000 to at least 20 former employees of the city restaurants Babbo, Lupa, and the since-closed Del Posto after reports of unwanted touching, sexual advances and explicit comments by the restaurants’ managers and other coworkers to employees of the restaurants.