Teen clothing brand Wet Seal has reached a $7.5 million settlement over allegations that it horrendously discriminated against employees of color, because they didn't have the "white," "blue eye," "thin and blond" look the brand wanted, according to the Equal Employment Opportunity Commission.
Three former managers filed the lawsuit last year, accusing the nationwide retail chain of actively firing and denying raises and promotions to black workers. One plaintiff, former manager Kai Hawkins, said that her boss threatened to fire her unless she hired more white employees. Another, Nicole Codgell, claimed that she was fired the day after the company's senior vice president for store operations toured several outlets and sent an email to lower managers, "African American dominate -- huge issue."
The lawsuit also accused senior vice president Barbara Bachman of commanding managers to "lighten up" the staff in stores serving mainly white customers, and telling one regional manager that she must have "lost her mind" to put a black person in charge of a certain store.
Wet Seal had denied the allegations. The company, calling the settlement a "no-fault resolution of the case," agreed to pay at least $5.58 million in damages to current and former African American managers, according to the NAACP Legal Defense and Education Fund, which was co-counsel in the suit. As part of the settlement, Wet Seal, which has over 7,000 employees, must also track applications to ensure diversity in hiring, expand its human resources department, post management openings, and regularly report on the hiring, promotions and firings of minority employees.
"Being targeted for termination from a job I loved because of my race was a nightmare," Cogdell said in a statement. "... 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."
This isn't an isolated case in the retail industry, where the pursuit of a specific "brand image" can end up leaving many out. "There's sort of an assumption about what the employees who interact with the customers have to look like," ReNika Moore, director of the NAACP Legal Defense and Education Fund's economic justice group, told AOL Jobs. "And there's a bias and prejudice that's filtering into these workspaces, and it's really acting as a barrier for workers of color to advance."
The Wet Seal case was just a particularly extreme example, she said. "You rarely get situations where it's so explicitly recorded, in email, especially from someone at such a high level in the company."
In 2004, Abercrombie & Fitch paid $40 million to minority and female employees and job applicants to settle a massive class-action federal discrimination suit. The settlement also demanded that Abercrombie increase the number of non-whites in its ads.
But it wasn't just African Americans who didn't fit into Abercrombie's idea of itself; an employee, who claimed that she was forced to work in the stockroom, away from customers, because of her prosthetic arm, filed suit in 2009; and two women said that they were fired or refused a job for wearing a head scarf.
Just this week, Abercrombie has come under fire for refusing to stock XL sizes, and media outlets resurfaced a 2006 quote from CEO Mike Jeffries. "In every school there are cool and popular kids, and then there are the not-so-cool kids," he told Salon. "Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don't belong [in our clothes], and they can't belong. Are we exclusionary? Absolutely."
But for many retail chains, there's a built-in bias when it comes to the question of who belongs. A 2012 survey of New York retailers by the worker advocacy group, Retail Action Project, and CUNY's Murphy Institute for Worker Education and Labor Studies found that minority workers were more likely to have their hours reduced without their consent, and significantly less likely to get a promotion.
White employees also earned an average of $11.30 an hour, compared to $10.49 for black workers, and $9.45 for Latinos, according to the report. All of them earn more than the average Wet Seal sales associate, however. According to employment review site Glassdoor.com, he or she takes home just $7.90 an hour.
Worst Retail Chains To Work For
Wet Seal Pays Out $7.5 Million In Horrendous Race-Bias Suit
Average hourly wage for sales associates: $10.41
CEO William Dillard II's total compensation last year: $4.01 million
Working sales at Dillard's can be a dramatic affair, complain several employees on Glassdoor.com. The clerks can be territorial, as they compete for sales numbers. There's little training, many say, and high turnover. Employees labor under the constant threat of termination, and with dizzyingly impossible-to-meet sales goals. The result: dismal morale.
Average hourly wage for sales associates: $7.51
CEO David Perdue Jr's total compensation last year: $1.94 million
The benefits and pay are low and there's a ton of work, especially because many of the stores run with a skeleton staff, employees gripe on Glassdoor.com. "They are not very understanding about family emergencies, your health, and love loading you with way more than you can handle," says one manager, even though Dollar General saw its profits last quarter soar 36 percent from the same time last year. The discount chain gets an average employee rating of 2.4 out of 5.
Average hourly wage for sales associates: $8.31
CEO Do Won Chang and his wife and CMO Jin Sook don't have publicly available salaries, because Forever 21 is a private company, but Forbes estimates their net worth at $3.6 billion.
Do Won Chang is no stranger to grueling work, having held three jobs at once -- as a janitor, gas station attendant and coffee shop barista -- when he first immigrated to America in 1981. But now as the co-founder, along with his wife, of retailer Forever 21, Chang doesn't have to mop a floor again. He's worth almost $4 billion.
But employees at his cheap chic chain aren't saved from the menial grind. While Forever 21 wasn't on the 100 biggest retail list, its lowly employee rating of 2.3 earns it an honorary spot. On Glassdoor.com, sales associates bemoan the long hours, which sometimes keep them in the store to the early hours of the morning. In January, a handful of Forever 21 employees filed a class action lawsuit against the chain, alleging that the company routinely failed to pay for time worked, and forced employees to labor through breaks and stay after they clocked out -- so that supervisors could check their bags for stolen goods.
Average hourly wage for sales associates: $7.92
CEO James Gooch's total compensation last year: $5.6 million
You have to work hard at RadioShack, say employees on Glassdoor.com, who complain about intense pressure from above to make sales goals, while managers lament about the time spent away from home with their 50- to 60-hour-a-week schedules. They give the company an average of 2.4 out of 5.
"Minimum wage unless you annoy people into buying a wireless phone," said a sales associate. And because of the high sales targets, "managers will always be on your back about absolutely everything," said one sales rep in Arlington, Texas. "Almost to the point where your whole life revolves around RadioShack and would seem as if you have lost your personal life."
Average hourly wage for sales associates: $7.58
CEO Michael Balmuth's total compensation last year: $12.5 million
The company doesn't have enough managers, so sales associates complain they don't get properly trained. And while employees have very nice things to say about each other, many of them agree that Ross Stores somehow manages to attract the rudest, most demoralizing customers. Then there's also the part about low pay, few raises, being understaffed and overworked. Employees on Glassdoor.com give the department chain a 2.4 out of 5.
Average hourly wage for grocery clerks: $15.45
Average hourly wage for baggers: $8.68
CEO Bob Piccinini's salary isn't available, because Super Mart is a private company. But as the majority shareholder of a chain with an annual revenue of around $5 billion, you can bet it's more than a bagger.
Employees are dissatisfied with Save Mart, according to Glassdoor.com, giving the 60-year-old supermarket chain an average rating of 2.4 out of 5. Many complain about a lack of promotion opportunities, and general disrespect from upper management.