PORTLAND (AP) — Fred Meyer Stores Inc. has settled a federal sex harassment lawsuit for $485,000.

The U.S. Equal Employment Opportunity Commission filed the lawsuit against the Portland-based grocery and retail chain owned by Kroger Co., with headquarters in Cincinnati.

The federal lawsuit said the store director and store operations manager at a Fred Meyer outlet in Oregon City repeatedly subjected women employees to graphic sexual discussions, unwanted touching and requests for sexual favors.

Attorneys for the commission said a human resources manager witnessed the harassing conduct on several occasions.

But EEOC officials said the same manager failed to take appropriate action against the store director or operations manager.

In addition, the commission charged that the managers retaliated against the three female employees when they complained about the sexual harassment.

A Fred Meyer spokeswoman said the managers have been replaced, and the harassment was an isolated incident.