Class Action Status Sought in Sterling Suit

Lawyers for a group of 15 current and former female employees are seeking class action status for a suit against Sterling Jewelers Inc., which charges the...

WASHINGTON — Lawyers for a group of 15 current and former female employees are seeking class action status for a suit against Sterling Jewelers Inc., which charges the retailer with engaging in a pattern of widespread sex discrimination by denying promotions and equal pay to women.

This story first appeared in the March 20, 2008 issue of WWD.  Subscribe Today.

The suit was filed Tuesday in U.S. District Court in New York. The law firm representing the women, Cohen, Milstein, Hausfeld & Toll P.L.L.C., revealed the lawsuit here Wednesday with four former employees of Sterling, which operates under store names such as Jared, Kay Jewelers and Belden Jewelers.

“The purpose of this suit ultimately is to change the practices of this company,” said Joseph M. Sellers, co-counsel with the law firm in the case, which was filed late Tuesday. “It is the industry leader and other companies look to companies like this in the way they model their conduct. When an industry leader is engaged in widespread discrimination, the countenances provide cover for whole industry practices that may be similar in nature.”

Sam Smith, another plaintiff attorney with Burr & Smith, said the women who have filed the case were all highly successful and received bonuses — at least one of the plaintiffs received a $10,000 bonus — for their high sales performances, but many were never promoted to key managerial positions.

Akron, Ohio-based Sterling is the U.S. operating arm of London-based Signet Group, which is publicly traded on the New York Stock Exchange. Sterling has 1,308 specialty jewelry stores in the U.S., while its parent company, Signet, operates 581 stores in the U.K, according to the firm.

“We do not believe these charges are valid,” said a Sterling spokesman. “When these allegations first surfaced, we investigated those claims. That investigation failed to substantiate the allegations. We are confident that these charges do not reflect the culture of this company.”

Sellers said more than 20,000 women, current and former employees, would qualify if the suit is granted class action status. On the basis of the pay claims, the suit covers women who worked for the jeweler from February 2003 to the present. The promotion claims, which were filed separately, cover the female employees listed as plaintiffs “for as long as the discrimination was practiced,” said Sellers.

The suit seeks fundamental changes to Sterling’s personnel policies, awards of earnings and benefits lost because of discrimination and compensatory and punitive damages.

The plaintiffs are challenging several of Sterling’s practices, including alleged wage discrimination between men and women who held the same positions and performed the same duties during the same period of time; the company’s alleged refusal to publicize jobs when they become vacant and provide a system for employees to apply for vacant jobs and a policy barring employees from discussing their wages with one another.

Sellers said a finding by the U.S. Equal Employment Opportunity Commission in January on behalf of 19 Sterling employees will strengthen the lawsuit. An EEOC letter of determination, attached to the lawsuit, found evidence of a nationwide pattern of sex discrimination in regard to promotion and compensation at Sterling. The independent agency also found that Sterling promoted male employees at a “statistically significant” higher rate than female employees holding the same positions.

The EEOC said it will begin a conciliation process to bring the two sides together in an attempt to reach a settlement. Sterling denied the allegations of discrimination, according to the EEOC letter, and “asserts that legitimate, non-discriminatory reasons support its decisions.”