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A $7.5 million racial discrimination settlement is reached with Wet Seal

A three-year investigation conducted by the U.S. Equal Employment Opportunity Commission (EEOC) determined that clothing retailer, Wet Seal Inc.,  favored a caucasian workforce.  Additionally, the EEOC found that Wet Seal’s upper level management had discriminated against Nicole Cogdell, a former store manager  by removing her from her manager’s role.

Nicole Cogdell and two other former managers filed a racial discrimination lawsuit against the company alleging an upper management policy of bias against its African-American employees. The lawsuit accused Wet Seal of catering to young caucasian women, of adopting a policy of firing and denying promotions and pay to its black employees in favor of hiring white workers who better fit the company’s “brand image.”

As evidence that discrimination was prevalent at “the executive level,” the suit included a 2009 email sent by former Senior Vice President of Store Operations, Barbara Bachman, to her employees pointing out the dominance of African-American workers as a “huge issue.”

One of the plaintiffs, Nicole Cogdell, an African-American store manager, claimed in the lawsuit she was fired one month after Bachman visited her store.  According to Cogdell, two sales clerks overheard Bachman saying that the manager should have “blond hair and blue eyes.” Bachman later threatened to fire the Philadelphia district manager unless Cogdell was fired, the suit alleges.  “I was shocked. I was humiliated. I was even embarrassed someone could say something like that and not look at the end results, which was the sales and customer service,” Cogdell said in an interview.

Another plaintiff, Kai Hawkins, alleges that she was told to diversify the staff by hiring non-African American workers.  She was given a  thirty-day deadline and threatened with termination unless she complied. “African-American employees were terminated despite doing a good job and without any explanation,” Hawkins said in the suit.

Following the EEOC’s investigation and the racial discrimination class action lawsuit Wet Seal purged its board and replaced Chief Executive Susan McGalla in January with John D. Goodman.  The new executive team has agreed to pay $7.5 million to settle the class action lawsuit.  Approximately  $5.58 million of the amount will go into a fund to cover damages to black current and former Wet Seal managers

Wet Seal, In., has also agreed to track applications to ensure hiring diversity, expand its human resources department to allow for better investigation of discrimination complaints and maintain a council of advisors for guidance on equal employment tactics, according to the NAACP, an African-American civil rights organization.

In a statement released by Wet Seal, Inc. the retailer said its collaboration with the plaintiffs played an “important role in redefining the company and positioning it for success.”

“We appreciate the insights we have gained from plaintiffs’ counsel and the EEOC for our best-practices initiatives,” Goodman said. “We are pleased to put this matter behind us as we continue to be committed to nondiscriminatory employment practices that create a welcome environment for people of all backgrounds.”

Both Federal and California Employment Laws protect employees from a variety of discrimination,  including racial, gender, religious and disability.  If you have suffered wrongful termination or  discrimination, please give California Employment Attorney, Todd M. Friedman a call at 877-449-8898 for a free consultation.