By Brendan O'Brien

Jan 9 (Reuters) - The largest franchisee of Burger King restaurants has agreed to a $2.5 million settlement with the Equal Employment Opportunity Commission, ending one of the agency's most extensive sexual harassment cases in its history.

Carrols Restaurant Group Inc said on Tuesday it will pay the money to 88 former and one current employee, the remaining parties in the 14-year sexual harassment case.

The company was accused of widespread violation of Title VII of the Civil Rights Act of 1964.

"We unequivocally do not tolerate sexual harassment in our workplace," Chief Executive Daniel Accordino said in a statement. The company did not admit wrongdoing, he said.

The EEOC has not announced the settlement and officials declined to comment on Wednesday.

Settling with the EEOC, Accordino said, was far less costly than continuing litigation, given the age of the claims and because hundreds of potential witnesses are scattered across the country, ill or deceased.

"It has cost the company an enormous amount of money to defend itself up to this point," said Michael Delikat, an attorney at Orrick, Herrington & Sutcliffe representing Carrols.

"It would have cost many more millions of dollars in legal fees to have concluded a potential trial of 89 claims," said Delikat.

The litigation began in 1998, when a former Carrols worker in Glen Falls, New York, filed a harassment charge with the agency.

An investigation resulted in the EEOC filing a "pattern or practice" suit on behalf of 90,000 current and former Carrols female employees in U.S. District Court for the Northern District of New York.

Early in the case, the court granted the EEOC permission to contact all 90,000 female employees.

In 2005, the agency identified 511 women it believed had been sexually harassed. The court then dismissed the class action component of the case, leaving attorneys to litigate 511 separate cases.

During the next five years, the number of individual claims decreased from 511 to 89 as a result of motions for summary judgments and requests for dismissals by the attorneys for Carrols.

In addition to the monetary settlement, Carrols agreed to enhance its anti-harassment policies, procedures and training programs and to report the results to the EEOC during a two-year period.

Carrols Restaurant Group is a franchisee of 572 Burger King restaurants around the globe.

For Carrols: Mike Delikat and John Giansello of Orrick, Herrington & Sutcliffe and Jeffrey Mayer of Freeborn and Peters.

For the EEOC: Gillian Thomas, Sunu Chandy, Elizabeth Grossman, and Robert Rose, EEOC.

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