Teen retailer Wet Seal said Thursday it has settled a class action racial discrimination lawsuit for $7.5 million.
The lawsuit, which was filed last year by former store managers, alleged that the Orange County-based retailer fired African American employees because it didn’t fit with the company’s image. The lawsuit also alleged that African American employeess were not given equal pay or promotions because of their race.
Wet Seal said the settlement is a “no-fault resolution” of the case.
“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,” said Wet Seal’s CEO John Goodman in a statement.
Under the settlement, Wet Seal will pay $5.6 million to current and former employees involved in the class action lawsuit. Wet Seal also plans to expand its human resources department to investigate discrimination complaints and maintain a diversity and inclusion council. The retailer will also post any manager and district director openings.
“With this settlement, Wet Seal is attempting to right its wrongs,” said Sherrilyn Ifill, president and director-counsel of the NAACP Legal Defense and Educational Fund, which helped represent the former Wet Seal managers. “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.”
The lawsuit was filed in U.S. District Court last year and the settlement is awaiting the court’s approval.
The lawsuit said there was an effort by Wet Seal’s Vice President of Store Operations Barbara Bachman to get rid of African American employees. Bachman, who is no longer with the company, wrote in an e-mail that “African Americans dominate—huge issue” after visiting stores and told a district manager to “clean the entire store out” by firing African American managers in 2008.
Wet Seal operates more than 500 stores nationwide and in Puerto Rico, under its flagship name and Arden B.
Other retailers have faced similar lawsuits. Abercrombie and Fitch paid $40 million to settle a lawsuit in 2004, which alleged that the retailer had discriminated against minority employees.