The U.S. Equal Employment Opportunity Commission announced the settlement Thursday.
The EEOC had sued EPI Advanced after women employees at its Sherman plant complained that a male supervisor and a male co-worker made sexually explicit comments and propositions toward them and that some women were grabbed and touched, according to court documents.
The EEOC says management failed to properly investigate the allegations.
The EEOC says the settlement also requires the company to develop and maintain a policy prohibiting sexual harassment; to distribute the policy and complaint procedure to all employees; and provide mandatory training to its employees on the policy.