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Clothing Chain Wet Seal Settles Lawsuit Charging It with Firing African-American Employees

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Thursday, May 9, 2013

Company Agrees to Compensate Former Store Managers and Change Company Practices

Wet Seal agreed to settle a national class action lawsuit filed by plaintiffs represented by the NAACP Legal Defense and Educational Fund (LDF) and co-counsel.  Cogdell v. The Wet Seal, Inc. charged that former top executives atWet Seal directed senior managers to get rid of African-American store management employees for the sake of its “brand image,” and to hire more white employees. The lawsuit alleges that Wet Seal had a policy of denying equal pay and promotion opportunities and terminating African-American store management employees across the country.

Wet Seal’s new CEO and Board of Directors have agreed to make numerous changes to address the discrimination charges.  Wet Seal also agreed to pay $7.5 million in monetary relief, including damages to current and former African-American managers of at least $5.58 million.

In December, the U.S. Equal Employment Opportunity Commission issued a Determination that former Wet Seal executives racially discriminated against store manager Nicole Cogdell, the lead plaintiff in the class action being settled. 

Ms. Cogdell learned she was being terminated after a former Senior Vice President visited her store in King of Prussia, Pennsylvania and discovered Ms. Cogdell was African-American. 

Ms. Cogdell said about the settlement, “Being targeted for termination from a job I loved because of my race was a nightmare.  It was important for me to be a force for change, but I could not have done it without the support of other employees who spoke out against discrimination. Wet Seal has now committed to strong, fair policies because we took a stand.  I hope these changes will create opportunities for all deserving employees, regardless of their race.”

Under the settlement Wet Seal will:

  • Pay $5.58 million into a fund for current and past workers affected;
  • Track applications to ensure diversity in applications and hiring;
  • Expand Wet Seal’s human resources department to better investigate complaints of discrimination;
  • Post store management and District Director openings;
  • Hire experts to develop updated job-related hiring, promotion, and compensation policies and practices;
  • Hire experts to develop performance evaluation tools for store management employees; and
  • Maintain a Diversity and Inclusion Council made up of a diverse group of current employees that will advise the company on topics including equal employment in recruiting, hiring, and compensation. 
  • Regular review and reporting regarding hiring, promotions and terminations of minority employees. 

“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,” said Sherrilyn Ifill, the President and Director-Counsel of the NAACP Legal Defense and Educational Fund, Inc., which is on the legal team representing the plaintiffs. “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.”

Nancy DeMis of the Gallagher, Schoenfeld law firm said: “This brings a sad chapter to a close.  We are proud to have had the opportunity to represent the courageous employees of Wet Seal who stood up for what was right. ”

According to Bill Lann Lee of the Lewis Feinberg law firm:  “Wet Seal’s new management made improvements to its employment policies after the filing of the case. That led to this resolution. We expect the proposed settlement agreement will benefit African-American employees for years to come.”

The lawsuit was filed in federal court in Orange County, California in July of 2012.

The plaintiffs are represented by NAACP Legal Defense and Educational Fund, Inc. (LDF), as well as two law firms: Oakland, California’s Lewis, Feinberg, Lee, Renaker & Jackson, P.C. and Media, Pennsylvania’s Gallagher, Schoenfeld, Surkin, Chupein & DeMis, P.C.

Wet Seal, headquartered in Foothill Ranch, California, has over 7000 employees at its 550 Wet Seal and Arden B. stores.

The settlement is subject to court approval.

 The settlement agreement, the lawsuit, and additional information are available at www.naacpldf.org/wetseal