Retailer Wet Seal Settles Race Discrimination Lawsuit for $7.5 Million
Author: Beth P. Zoller, XpertHR Legal Editor
In a development that highlights the importance of promoting fair employment practices, the clothing and accessories retailer Wet Seal has agreed to settle a race discrimination class action lawsuit for $7.5 million.
Wet Seal store manager Nicole Cogdell filed a class action lawsuit in January 2013 on behalf of current and former African-American retail store management employees alleging that Wet Seal had a policy and practice of intentionally discriminating against African-American store managers with respect to pay, promotions, job assignments, discipline, demotion, termination and other terms and conditions of employment. The plaintiffs further alleged that they were retaliated against for complaining about unlawful practices and a hostile work environment. In May 2013, the parties reached a settlement.
According to a press release from the NAACP Legal Defense and Educational Fund, Inc., Wet Seal agreed in the settlement to take the following steps:
- Paying approximately $5.58 million to current and former workers affected by its policy;
- Paying $1.8 million in attorneys' fees to class counsel and setting aside the the remaining $120,000 to pay the fees and expenses of a claims administrator;
- Increasing the tracking of applications to ensure a diverse workforce;
- Establishing new hiring criteria;
- Posting open positions for store managers and district directors;
- Including diversity in employee training;
- Expanding Wet Seal's HR department to handle discrimination complaints more effectively;
- Establishing a diversity and inclusion council on which current employees may advise the company on equal employment issues;
- Hiring experts to develop updated policies and practices regarding hiring, promotion and compensation;
- Hiring experts to develop performance-evaluation tools for store management employees; and
- Regularly reviewing and reporting regarding the hiring, promotions and terminations of minority employees.
This case reinforces that it is unlawful to discriminate against workers because of their membership in a protected class. Employers should be sure to establish training sessions on discrimination, harassment and retaliation for all levels of employees from high-level executives to top managers to hourly store employees aim to create a diverse and inclusive workplace. Managers and supervisors with recruiting and hiring responsibilities should be trained on how to create nondiscriminatory job advertisements and how to conduct a proper job interview to in order to create a diverse workforce. Lastly, retail employers must take all complaints of discrimination, harassment and retaliation seriously, and take affirmative steps to investigate the allegations including any necessary corrective and disciplinary measures.