Retailer Wet Seal settles racial discrimination lawsuit for $7.5 million

Clothing retailer Wet Seal Inc. has agreed to settle a putative class- action racial discrimination lawsuit for $7.5 million, according to the NAACP Legal Defense and Educational Fund Inc.

Settlement of the litigation includes $5.6 million in damages to an unspecified number of current and former African-American managers at the Foothill Ranch, Calif.-based retailer, the NAACP defense fund said in a statement released Thursday.

The New York-based fund, along with two law firms, represented plaintiffs in the litigation.

Included in the evidence cited in Nicole Cogdell et al. v. The Wet Seal Inc., which was filed in U.S. District Court in Santa Ana, Calif., in http://www.businessinsurance.com/article/20120713/NEWS07/120719931 July 2012, was an email from a senior vice president of store operations sent after a store visit that stated, “African-American dominate(cq) – a huge issue.”

The suit also alleges the retail chain's practices include insisting on an image “that predominantly reflects a white image” and holding African-American store management to higher performance standards than white employees.

Separately, in December, the U.S. Equal Employment Opportunity Commission also issued a determination that Wet Seal executives racially discriminated against Ms. Cogdell.

Agrees to diversity efforts

In addition to paying the $7.5 million settlement, the retailer, which operates 55 Wet Seal and Arden B stores and has 7,000 employees, agreed to track applications to ensure diversity in applications and hiring, and expand its human resources department to better investigate dissemination complaints, among other provisions, according to the statement from the NAACP fund.

Sherrilyn Ifill, president and director-counsel of the fund, said in the statement, “With this settlement Wet Seal is attempting to right its wrongs. It has agreed to address our claims challenging the treatment of black workers in its retail stores. The fight for equality in the workplace is far from over in America. No one should have the cards stacked against them on their job simply because of their race.”

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New leadership

Wet Seal said in a statement, “While the company maintains that it has a strong track record of hiring, promoting and retaining a diverse work force, Wet Seal’s new leadership approached the plaintiffs to collaborate on best practices and a no-fault resolution of the case. This collaboration has played an important role in redefining the company and positioning it for success.”

Wet Seal CEO John Goodman said in the statement, “From the moment I became CEO of Wet Seal in January, I made clear that we value a diverse work force and believe that a dynamic and representative employee base allows us to best serve all of our customers.’’