California Clothing Store Will Pay $7.5 Million In Racial Discrimination Settlement

Credit: New York Magazine

California-based clothing retailer Wet Seal will pay $7.5 million and make a series of changes aimed at reducing racial discrimination after a federal court approved a settlement last week.

A California district court gave preliminary approval to the national class action settlement in the case, Cogdell v. Wet Seal, which alleged that Wet Seal “had a policy of denying equal pay and promotion opportunities and firing African-American store management employees” in violation of Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on race, color, religion, sex, or national origin. The plaintiffs were represented by the NAACP Legal Defense and Education Fund and two other law firms. The court will decide in November, after a review of the claims process, whether to grant final approval.

If the settlement, which the two parties reached May 8, is approved, at least $5.58 million of the $7.5 million in monetary relief will be paid in damages to current and former managers of Wet Seal outlets who are black or African-American. The company will also take several non-monetary steps, including expanding its human resources department and tracking job applications to ensure diversity in hiring and applications.

A three-year investigation by the Equal Employment and Opportunity Commission (EEOC) into the store wrapped up last year. The EEOC concluded that the store had knowingly discriminated in its hiring decisions, the Los Angeles Times reported:

In a three-year investigation, the commission found evidence that Wet Seal corporate managers openly stated that to be profitable the retailer had to retain workers with “the Armani look” — meaning thin, blond and blue-eyed.

One high-level executive sent an email to underlings in 2009 pointing out that the dominance of African American workers was a “huge issue.”

Managers were instructed to make employment decisions based on race,” the agency said in documents made public Monday.

The case is the latest reminder of the difficulties African-Americans face in the job market. The black unemployment rate is still more than double that for white people, and last week the EEOC filed two suits against separate companies alleging they unfairly used background checks to discriminate in hiring decisions.


Joseph Diebold is an intern at ThinkProgress.