Sterling Jewelers to Pay $175M to Settle Huge Pay Bias Case

Sterling Jewelers will shell out $125 million to a class of nearly 70,000 women to settle their claims of gender discrimination in pay and promotions, plus $50 million to cover their attorney fees in the long-running dispute, the company announced Thursday morning.

The deal, which was unveiled by the jeweler and lawyers for the class from Cohen Milstein Sellers & Toll PLLC in a statement, would wrap up a massive arbitration that launched in 2008, if it's approved by the arbitrator overseeing the case.

"On behalf of our legal team, we applaud the courage of our clients in the pursuit of this case of singular importance to protecting the rights of women in the workplace," Cohen Milstein partner Joseph Sellers, who is lead class counsel, said in the statement. "This settlement provides for significant monetary relief for our clients and ensures that the practices that gave rise to this case will not recur."

The arbitration, which was scheduled to go to trial in September, includes a class of some 68,000 current and former female sales associates who claimed the factors the company used in salary decision-making suppressed their pay. They also said Sterling had an informal promotion system that favored men and deprived women of advancement opportunities.

They leveled claims under Title VII of the Civil Rights Act of 1964 and the Equal Pay Act of 1963, all of which will be resolved by the $175 million settlement if it is approved, Sellers told Law360.

Sterling, a subsidiary of Signet Jewelers, denied the allegations but said in Thursday's announcement that it has discontinued the pay and promotions practices at issue in the case and has made strides in recent years to be more diverse, equitable and inclusive.

The effort includes mentorship programs and leadership training for women and a "robust" system for reporting and investigating workplace complaints, according to the news release.

"For the past four years, we've been successfully transforming Signet's business model and culture," Signet CEO Gina Drosos said in the statement. "I want to thank our dedicated team members for helping to create our welcoming and inclusive environment where everyone is invited to be their authentic self."

Drosos, who became Signet's first female CEO in 2017, also called the deal "an important step in bringing closure to a nearly 15-year-old case."

Recent shifts at the company's highest echelons have improved the environment for women working there and are part of the reason the two sides were finally able to broker an agreement, Sellers said.

"Over the last several years, the leadership of the company has changed, and with it has been a marked change in the commitment of the company to ensure it's a leader with respect to its treatment of women in the workplace," the lawyer said. "That was an important factor that helped to get this case settled."

More than a dozen named employees kicked off the dispute in federal court in March 2008 alleging Sterling discriminated against female workers by paying them less than men and passing them over for promotions.

The suit was sent to arbitration months later and has bounced between arbitration and federal court, including three trips to the Second Circuit and a pair of petitions filed with the U.S. Supreme Court.

In 2012, the high court rejected a petition by Sterling over whether the arbitration agreement at issue permitted class proceedings. Eight years later, in October 2020, the Supreme Court declined to hear Sterling's petition seeking to limit when workers can pursue class arbitration.

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