MINNEAPOLIS — The U.S. Equal Employment Opportunity Commission says a Hugo construction company will pay $125,000 to two former employees to settle a racial harassment lawsuit.

The agency’s lawsuit against JL Schwieters Construction alleged the company subjected the two black employees to a hostile work environment, including physical threats, based on their race.

Willie Staple and Dion Pye worked as carpenters for the company from September 2012 to December 2013. The EEOC says both were racially harassed by a white supervisor who used derogatory names and made a noose out of electrical wire, threatening to hang the men.

A federal judge signed the order Wednesday which also requires the company to train managers and other employees on federal discrimination and harassment laws.

The company did not immediately return a call or email seeking comment.