Decision to Fire Gays Stirs Anger : Rights dispute: A restaurant chain says it has discontinued the practice. Activists criticize the policy as ‘archaic.’

A country restaurant chain that fired several employees because they were homosexual, then apparently backed off the policy, has set off a struggle with gay rights activists who Wednesday contended the “institutionalized bigotry” was being quietly continued.

The controversy involves Cracker Barrel Old Country Stores, based in Lebanon, Tenn., which runs 98 eateries, many located along Southeast interstate highways. The chain recently issued a policy that cited “traditional American values” and declared that it “is perceived to be inconsistent with those of our customer base to continue to employ individuals in our operating units whose sexual preferences fail to demonstrate normal heterosexual values which have been the foundation of families in our society.”

Rights activists said the policy has led to a number of firings, not only unfairly depriving people of livelihoods but also inciting community fears against homosexuals and forcing many to hide their lifestyle for fear of discrimination.

Amid outrage from homosexual rights advocates, Cracker Barrel officials put out a second statement, conceding that the initial policy may have been an “overreaction to the perceived values of our customers,” and adding: “We have revisited our thinking on the subject and feel it only makes good business sense to continue to employ those folks who will provide the quality service our customers have come to expect from us.”

Nevertheless, rights activists remained angry because Dan Evins, company chairman in Lebanon, Tenn., was quoted in the Tennessean paper of Nashville as saying that homosexuals would not be employed if their presence posed the potential for disruption in rural communities.

In Washington, D.C., Robert Bray, spokesman for the National Gay and Lesbian Task Force, said that, in the past, homosexual employees have been fired because of their sexual orientation, but companies tended to “disguise the terminations. This Cracker Barrel policy is unprecedented because the company has codified and institutionalized bigotry and discrimination.”

In interviews Wednesday, Cheryl Summerville and Wylie Petty, who were fired, both said they had felt happy and secure in their jobs and were appalled when told they were being dismissed.

Petty, who said he was fired after working 15 months as a waiter in Tifton, Ga., said: “It was like someone had cut off my arm. I loved my job.” He said he had discussed his lifestyle with colleagues.

Summerville, who had worked eight months as a cook near Douglasville, Ga., said she was “shocked. I thought people had gotten past that point.” Since her firing, she has been asked to return but has not made up her mind whether to accept.

Abby Rubenfeld, who co-chairs the Tennessee Gay and Lesbian Alliance, said the policy showed that “overt discrimination is still alive and well in pockets of the country. As a Tennessean, I regret that one of those pockets is here.”

Bray provided reporters copies of the original Cracker Barrel policy and the later statement that apparently rescinds the policy. Both were signed by William A. Bridges, vice president of human resources, and dated Feb. 21 and Feb. 22, respectively.

In a letter to Evins on Wednesday, the Tennessee Gay and Lesbian Alliance castigated the policy as “archaic, unenlightened thinking.” The group called for a meeting to discuss the matter and threatened “direct actions protesting the policy at your franchises.”

Researcher Edith Stanley contributed to this story.