CHICAGO (AP) _ In a precedent-setting case, Pizza Hut settled a lawsuit filed by black family members who said they were harassed, threatened with a mop handle and taunted with racial slurs at a restaurant in 1995.

The settlement follows a federal judge's ruling last summer that companies can be held liable if their employees commit hate crimes. The amount of the settlement was not disclosed.

``You can hate someone privately and it's your own business,'' Mary Ann Burton, one of the family members, said after a news conference Tuesday in Chicago. ``When you hate someone publicly, it becomes everyone's business.''

In settling, Pizza Hut admitted no wrongdoing.

The lawsuit was filed last year on behalf of Burton and 16 family members from Illinois, Missouri and South Carolina who had gathered for a family dinner during the Fourth of July weekend in 1995 in Godfrey, a predominately white southwestern Illinois town about 20 miles north of St. Louis.

In July, U.S. District Judge William Hart refused to dismiss the case. Hart said the Pizza Hut employees' actions appeared to be racially motivated, and rejected Pizza Hut's contention that the state's hate crimes law applies only to individuals.

Family members said they called in an order for six pizzas about an hour before closing time and were told they could eat at the restaurant. But the judge noted that they were not provided plates or utensils and were told that no drinks could be ordered because the beverage machine had been turned off _ even though white customers had received drinks minutes before the request.

Employees also ran the sweeper near their table, blasted the jukebox and turned the lights on and off, the judge said.

Family members said they felt particularly threatened when employees allegedly followed them into the parking lot with one of them slapping a mop handle into his hand. They said more than one employee called them ``niggers,'' among other things.

``Those words hurt me because my son had to ask me what they meant,'' said Adrian Burton, Mary Ann Burton's son, who now lives in Arlington, Texas.

In a statement issued Tuesday, Pizza Hut said it trains employees to treat customers and employees fairly and does not tolerate harassment.

``We concluded there was absolutely no racial or discriminatory behavior involved, but our employees should have provided better customer service,'' the statement said. ``We now have confidentially resolved this matter with these customers at an appropriate level given the circumstances in this isolated incident.''

Pizza Hut, which was owned by PepsiCo in 1995, is now owned by Tricon Global Restaurants, a Louisville, Ky.-based company that also owns KFC and Taco Bell.

Shares of Tricon rose $1.25 to $48.93 3/4 in trading on the New York Stock Exchange.

Edward Voci, the family's attorney, says the ruling could have ramifications for corporations nationwide. At least one legal expert agrees.

``This potentially has a lot of applications because a lot of people do their hating at work,'' said Saul Levmore, a law professor at the University of Chicago.