Sexual-Harassment Suit Names Sea Galley Execs

Financially embattled Sea Galley Stores Inc., based in Lynnwood, took another blow with the recent filing of a sexual-harassment lawsuit by a former employee against two corporate managers.

The seafood-restaurant chain owns 18 restaurants in locations such as Seattle, Tacoma, Everett, Lynnwood, Totem Lake, Federal Way and Puyallup. A new top executive recently took over leadership of the company.

The lawsuit, filed in late February, alleges that Steve Cozzetto used his position as a high-ranking Sea Galley official in an attempt to pressure Dianne Donohue, a restaurant manager, into having sex with him. When Donohue refused, the suit alleges, her advancement was slowed and eventually she was fired.

Cozzetto, formerly vice president of operations, left Sea Galley about a year ago.

The complaint further alleges that Jim Burke made sexual, foul and inappropriate statements and acted to assist Cozzetto's advances toward Donohue. He also opposed Donohue's marriage and told her not to have children or it would adversely affect her career, according to the lawsuit.

Burke, who had worked for Cozzetto, replaced him as head of operations.

Russell Samples, Donohue's attorney, described the harassment against his client as flagrant.

Sea Galley's attorney, however, disputes the lawyers' claims.

"We haven't found any factual support for the claims," says Lewis Ellsworth. Burke also denies the allegations and says he and Cozzetto did nothing wrong.

The restaurant chain has faced other harassment complaints. Two such cases are listed in King County Superior Court. Both lawsuits were filed by women and both allege sexual harassment in addition to various other discrimination allegations. Both cases were settled out of court.

In recent years, Sea Galley has faced serious financial problems leading to red ink and asset sales. Early this year, the company lost its listing on the NASDAQ stock exchange because it fell below the exchange's requirements.

This month, the company named Jan Young president and chairman, replacing Kim Kreig, who took the helm only one year ago with a mandate to turn the company around.

Sea Galley's sales are up slightly to about $25 million and customer counts have also improved in recent months, Burke says.

Last year, the company lost $5.1 million on sales of $24 million.