EXCLUSIVE: Mike Isabella addresses harassment allegations, changes he's making to turn things around

WASHINGTON - His name is synonymous with the D.C. restaurant industry, but there is a cloud hanging over celebrity chef Mike Isabella. He has filed for Chapter 11 bankruptcy and is dealing with the fallout after a former manager accused him and other men in his restaurant group of sexual harassment.

The culinary empire he built in the D.C. region has been crumbling. Whether it can be blamed on sexual harassment allegations or other poor business decisions, Isabella has had to let go of 400 employees this year.

Graffiato, Isabella's first restaurant in D.C.'s Chinatown, is among several closures he has had to make along Isabella Eatery, a massive food hall that opened at Tysons Galleria in Northern Virginia less than a year ago. The Washington Nationals have also cut ties with him.

One of the highest-ranking women in Isabella's restaurant empire, Chloe Caras, filed a complaint in March. The former director of operations for Isabella Eatery accused the chef along with his executives of sexual harassment.

He broke his silence to FOX 5 and addressed the lawsuit on camera for the first time.

"I want people to know that I'm sorry," Isabella said. "I probably should have apologized earlier."

In a surprising start to our interview, Isabella claimed responsibility. He would not speak of Caras by name or respond specifically to her complaint, citing terms of the settlement, but he said he has spent the past few months taking steps to turn things around.

"There is nobody who is untouchable, including myself," he said. "Everyone has to be held accountable."

Caras' lawyer has not returned FOX 5's request for comment, but we did speak with a former pastry sous chef mentioned in the lawsuit. Sara Hancock, who left her job after seven months, described an environment that was degrading to women and said she had a run-in with Isabella that made her uncomfortable.

"He reached over and grabbed me like a side hug, pulled me and smashed his lips into my cheek, kissed me multiple times and then slurred that he was going to make me a superstar," said Hancock.

"Sometimes I didn't know I put people in situations that make them feel uncomfortable and I apologize for that because I would never want anyone to feel uncomfortable," said Isabella.

In court documents, Caras described a night at Isabella Eatery last December that ended with the former "Top Chef" contestant screaming at her and chasing her around. She said when she reached for the door, he told her not to come back and then tried to avoid paying her unemployment.

Her lawsuit detailed harassment by Isabella and his executives that she said she endured throughout her three years working for him.

When we asked him about allegations of unwelcome touching, sexual advances, vulgar and explicitly sexual remarks, he told us, "There has been some mistakes in the past. I can't say everything was going on that I know of. Again, I apologize for things that went on that made people feel uncomfortable. I don't want anyone to feel uncomfortable and these are things that do not go on in my restaurant as we speak."

The lawsuit mentions a "bro-culture" in the restaurant industry that allows sexual harassment to flourish. Isabella said he now sees that it's not right and has never been.

"We hired a firm to come in after this happened to train me, to train all of my staff on procedures and policies, what could be said, what could be done, how to act and how to control situations," he said. "It was a great learning experience. We have learned a lot. Every employee has to take this class when they come in."

Isabella still employees 350 people at eight restaurants, including Requin at the new District Wharf. He is hoping to get back to basics, keep cooking and focus on the skills he learned from his mother and grandmother growing up.

"It was very upsetting for my mom to hear this," said Isabella. "I just want to make everything better and do as much as I can to learn from this experience and never let it happen again in my company.

Another point of contention was non-disclosure agreements that Isabella has all of his employees sign. There have been concerns that they were too broad and being used to intimidate victims or witnesses of harassment from coming forward. He said he has now rewritten them as part of his overhaul of policies and procedures since the lawsuit.