Wet Seal Settles Bias Suit Filed by Black Store Managers

Wet Seal Inc. (WTSL) agreed to pay $7.5 million to settle a lawsuit brought by black store managers who claimed they were fired because they didn’t fit the teen clothing retailer’s “brand image.”

The settlement needs court approval, lawyers said in papers filed yesterday in federal court in Santa Ana, California. About 1,600 people may be covered by the accord, according to court documents.

Three former employees sued Wet Seal in July claiming discrimination and retaliation. According to the complaint, a senior vice president of store operations said in a 2009 e-mail that some “store teams-need diversity/African American dominate-huge issue.”

Wet Seal disclosed the “amicable” accord today while announcing fiscal first-quarter sales. The company, based in Foothill Ranch, California, has up a human-resources compliance team to ensure employees are treated fairly in the future.

“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 our customers,” Chief Executive Officer John D. Goodman said in a statement. “We are pleased to put this matter behind us.”

‘Fair Policies’

“Wet Seal has now committed to strong, fair policies because we took a stand,” Nicole Cogdell, the lead plaintiff, said today of her co-workers in an NAACP Legal Defense and Educational Fund statement. The civil rights group filed the case on the employees’ behalf.

“Being targeted for termination from a job I loved because of my race was a nightmare,” said Cogdell, who managed a Wet Seal store in King of Prussia, Pennsylvania. “I hope these changes will create opportunities for all deserving employees, regardless of their race.”

The case is Cogdell v. Wet Seal, 12-cv-01138, U.S. District Court, Central District of California (Santa Ana.)

To contact the reporter on this story: Andrew Harris in Chicago federal court at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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