Fashion retailer Wet Seal Inc. agreed to pay $7.5 million to settle a racial discrimination lawsuit filed by a Pennsylvania resident who claimed the retailer discriminated against African-American employees because they did not fit the company's brand image.
Nicole Cogdell, of Chester, Pa., was the lead plaintiff in a class-action suit filed last summer in federal court. Joining Cogdell in the lawsuit were Kai Hawkins and Myriam Saint-Hilaire, also of Pennsylvania.
At least $5.58 million of the damages will go to current and former African-American managers. The settlement was announced Thursday by Wet Seal and the NAACP.
The lawsuit alleged former Wet Seal executives denied equal pay and promotion opportunities or terminated African-American store managers nationwide.
Cogdell, a community liaison to Chester Mayor John Linder, issued a statement through the NACCP Legal Defense and Educational Fund.
"Being targeted for termination from a job I loved because of my race was a nightmare,' Cogdell said in the statement. "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.'
In December, the U.S. Equal Employment Opportunity Commission issued a determination that former Wet Seal executives racially discriminated against Cogdell, who formerly worked at the chain's King of Prussia, Pa., location. The EEOC report said Wet Seal corporate managers openly stated they wanted employees who had "the Armani look, were white, had blue eyes, thin and blond in order to be profitable.'
Cogdell resigned from Wet Seal in 2009 after Barbara Bachman, the company's former senior vice president of operations, visited Cogdell's store in King of Prussia.
The EEOC corroborated Cogdell's claim that Bachman was more concerned with the racial makeup of the staff than its performance during her visit, citing an email Bachman sent after visiting stores in the Maryland and Philadelphia markets. The email said, "Store teams — need diversity African-Americans dominate — huge issue.'
Regarding the King of Prussia store managed by Cogdell, Bachman wrote, "Store manager is not right for this store — she has been in this store for a month!'
Bachman said during a deposition that she wrote the memo "to stress the importance of having diversity at all stores,' but the commission's report said "Bachman never expressed diversity concerns in stores with a predominantly white sales force.'
Cogdell claimed in the lawsuit that she initially was dismissed after complaining to human resources about Bachman's email and then transferred to the company's Springfield, Pa., location when she filed a complaint with the EEOC. When she left the King of Prussia location, the store ranked eighth in revenue among the company's 500-plus locations.
Within the last year, Wet Seal has replaced its board and hired John D. Goodman as its chief executive officer. The company, headquartered in Foothill Ranch, Calif., operates 464 Wet Seal stores and 62 Arden B stores in 47 states and Puerto Rico.
Wet Seal released a statement calling the settlement a "no-fault resolution' in which the company's new leadership approached the plaintiffs to collaborate 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 in the statement. "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.'
The settlement agreement outlines a series of initiatives designed to ensure diversity, including the maintenance of a Diversity and Inclusion Council. The settlement still must be approved in federal court.
The plaintiffs were represented by the NACCP Legal Defense and Educational Fund; Lewis, Feinberg, Lee, Renaker and Jackson, a law firm based in Oakland, Calif., and Gallagher, Schoenfeld, Surkin, Chupein and DeMis, a firm based in Media, Pa.
Cogdell first worked for Wet Seal from September 2002 to January 2003 at the Granite Run Mall in Media, Pa., before resigning for "family reasons.' She was rehired in November 2008 and worked at the Springfield Mall store until being transferred to King of Prussia on Jan. 2, 2009.
Hawkins worked as a manager at locations at The Gallery Mall in Philadelphia and the Cherry Hill Mall in New Jersey. Saint-Hilaire was an assistant manager at the King of Prussia store.