Fashion retailer Wet Seal Inc. said it would pay $7.5 million and take corrective measures to settle a July class-action racial-discrimination lawsuit filed by three African American women from Delaware County who worked at malls in the region.
The women, who had lost jobs at Wet Seal stores, said in the suit that the chain set out to fire African American employees because they did not fit the retailer's "brand image."
Wet Seal, based in Foothill Ranch, Calif., had denied the allegations. In a statement Thursday, the company called the settlement a "no-fault resolution of the case."
Chief executive John D. Goodman said in the statement, "From the moment I became CEO of Wet Seal in January, I made clear that we value a diverse work force and believe that a dynamic and representative employee base allows us to best serve all of our customers."
Goodman said the company appreciated "the insights we have gained" from 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," he said.
The lawsuit was filed in federal court in California by Nicole Cogdell and Myriam Saint-Hilaire, who had worked in the Wet Seal store in King of Prussia, and Kai Hawkins, who had worked at several stores, including ones at the Gallery and Cherry Hill Mall. It cited e-mails and testimony from former managers that allegedly showed high-level Wet Seal executives instructing managers to fire African American employees, and "diversify" by hiring and promoting white employees "who fit the Wet Seal brand image."
The U.S. Equal Employment Opportunity Commission issued a determination in December that Wet Seal had racially discriminated against Cogdell.
In a statement, Cogdell said of 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."
Wet Seal operates 464 Wet Seal stores and 62 Arden B stores.