Cheesecake Factory settles sexual harassment suit

* EEOC says male employees had "lived in fear"

* Company to pay $345,000, denies wrongdoing

NEW YORK, Nov 10 (Reuters) - Restaurant chain Cheesecake Factory Inc (CAKE.O) will pay $345,000 to settle a lawsuit accusing it of allowing male kitchen staffers to sexually harass other male workers in a restaurant near Phoenix.

The Equal Employment Opportunity Commission announced the settlement on Tuesday, which resolves charges that the company knew about and tolerated repeated sexual assaults at the Chandler, Arizona restaurant.

The settlement of the 16-month-old lawsuit also calls for Cheesecake Factory to improve training and appoint and ombudsman to address sexual harassment claims by employees.

Mary Jo O'Neill, regional attorney of the EEOC district office in Phoenix, in a statement said: "Beyond the lavish decor that the company boasts on its website was a horribly dysfunctional workplace where male workers lived in fear."

U.S. District Judge Neil Wake issued a consent decree for the settlement on Nov. 5.

The judge said Cheesecake Factory "specifically denies" the EEOC's allegations, and settled solely to avoid the expense and inconvenience of further investigation and litigation.

A call to the Calabasas Hills, California-based company was not immediately returned.

The case is EEOC v. Cheesecake Factory Inc, U.S. District Court, District of Arizona, No. 08-1207. (Reporting by Jonathan Stempel; Editing by Tim Dobbyn)