The Cato Corporation has reached a settlement with the Equal Employment Opportunity Commission on Monday, resolving a long-standing discrimination case.
The North Carolina-based apparel and accessories company, one of Charlotte’s oldest retailers, has agreed to pay $3.5 million to former employees who alleged they were discriminated against them because of special needs like pregnancies or disabilities. The EEOC described the case as “a nationwide, systemic investigation” in a press release and said Cato agreed to update its reasonable accommodations policies as part of the resolution.
“Giving employees a job modification that allows them to continue working can be a critical reasonable accommodation for pregnant women or people with disabilities when they really need that paycheck,” said EEOC Chicago district director Julianne Bowman.
The case began with complaints from former employees, between 2011 and 2013, who were pregnant or had disabilities and said they were fired as a result.
In the course of the investigation, the EEOC found that those people were in fact denied reasonable accommodations, forced to take unpaid leaves of absences or discharged as a result, thereby violating federal law.
As part of the settlement, Cato has also agreed to retrain the entire staff of more than 10,000 employees and report progress to the EEOC for the next three years.
Company shares opened in the red Tuesday, down nearly 2 percent, following a yearlong trend of declines. The stock is down about 7.5 percent year-to-date.
Earlier this month, Cato released disappointing November sales figures. As of Dec. 1, the company now has 1,349 stores operating in 33 states.
In a statement, Cato president and chief executive officer John Cato said the company is also providing additional training for its human resources team so they understand “Cato’s process for requesting accommodations.”
“We are committed to making Cato a great place for our associates to build long and successful careers,” he said.