You've probably heard of Hooters -- the restaurant chain known for attracting male customers by hiring waitresses who are well-endowed and dressed to show it.

The firm now employs more than 30,000 people. Some would consider this a success story, but our government didn't. Not because Hooters is using sex to sell -- but because its waitresses are -- get ready -- women!

"Discrimination!" cried the federal government's Equal Employment Opportunity Commission (EEOC).

The business of Hooters is food, said the government, and "no physical trait unique to women is required to serve food." EEOC lawyers demanded Hooters produce all its hiring data, and then grilled Hooters for four years. Mike McNeil, Hooters' vice president of marketing, told "20/20" the EEOC bureaucrats demanded to look at reams of paperwork. "Employee manuals, training manuals, marketing manuals -- virtually everything that's involved in how we run our business . . . "

The EEOC then issued a set of demands. First, it defined a class of disappointed males who had not been hired by the company. The EEOC said, according to McNeil: "We want you to establish a $22-million fund for this mythical 'class' of dissuaded male applicants. We want you to conduct sensitivity training studies to teach all of your employees to be more sensitive to the needs of men."

I suspect Hooters' customers are mostly men who think the firm is quite sensitive to their needs, thank you -- and that there would indeed be a class of disappointed males if the government insisted men do the jobs of Hooters girls.

Typically, companies assaulted by EEOC lawyers just pay up to avoid ruinous legal fees, but Hooters fought back, cleverly, not just in court, but in the court of public opinion. Hooters waitresses marched on Washington, chanting, "Save our jobs." A burly Hooters manager dressed as a Hooters waitress posed for cameras, beard and all, demonstrating what a "Hooters Guy" might look like.

That was a hoot, and it may have worked. Lawyers representing male applicants accepted an out-of-court settlement of $3.75 million, a fraction of the $22 million that had been demanded. The EEOC dropped its demands for sensitivity training; Hooters agreed to create more jobs like busboys and managers, which didn't have to be performed by women. Continued...