As the company reported its financial results for last year, Signet Jewelers Ltd. today addressed the class-action lawsuit brought by female workers claiming sexual harassment at its subsidiary Sterling Jewelers.
While Sterling last week denied the sexual harassment claims by female employees involved in long-running litigation over wage discrimination, saying formal claims of sexual harassment are not part of the suit and are creating a “distorted” image of the company, Signet chairman Todd Stitzer attempted to provide “significant context” in an effort to address questions from shareholders over the harassment accusations. The lawsuit is in arbitration.
In a recent article, The Washington Post detailed accounts by former female employees of Signet taking part in the class-action discrimination suit of incidents in the Nineties and early Aughts where they witnessed others or were subject to being “groped, demeaned and urged to sexually cater to their bosses to stay employed.”
Stitzer told investors during a Thursday call with Wall Street analysts that “the Signet board and management team have absolutely no tolerance for discrimination or harassment and we have had strict antiharassment policies in place for decades.”
“The portrait of Signet painted in recent media reports is irreconcilable for me with a company that I have served as director and chairman for more than five years,” Stitzer added. “We have taken seriously the allegations of sexual harassment prepared in connection with the pending arbitration matter, many of which go back decades. The allegations of sexual harassment focused on leadership were denied under oath.”
As for the claims that were certified to go forward in arbitration, namely allegations that women working for Sterling have been routinely denied pay increases and promotions by a mostly male management force, Stitzer held that “Signet outperforms national averages in the percentages of its store management staff who are female.”
Although Stitzer pointed out that the case was initially filed in 2008 and largely concerns allegations of discrimination that took place before 2005, he said management across Signet is currently 68 percent female and four of its 11 board members are women.
He also stressed that 43 of the 69,000 potential class members have come forward with accounts of sexual harassment.
“Let me be absolutely clear, even one instance of sexual harassment is unacceptable. I cannot really comment further except to emphasize that Signet has sought to continuously advance our journey of improvement in workplace practices,” Stitzer said. “During the last decade, we focused on consistently improving our policies and practices around equal employment opportunity and workplace culture.”
While the company has long claimed that an internal investigation turned up nothing to substantiate the discrimination claims being arbitrated — and Stitzer said Thursday that Signet believes they “have no merit” — he also revealed a new all-female board committee is being formed focused on “respect in the workplace.”
The committee also plans to appoint an “independent consultant” to review “current and future company practices and policies regarding equal opportunity and workplace expectations,” along with a third-party ombudsman to act as a confidential resource for employees, Stitzer added.
Joe Sellers, the Cohen Milstein attorney representing the plaintiffs in the case, said: “Sterling knew it was systematically paying women less than men and continues to use the same pay practices today. The company has tolerated conduct profoundly demeaning to women and still refuses to acknowledge its role in this. The fact that Sterling is trying to split hairs over the legal definition of sexual harassment rather than acknowledging the widespread mistreatment of its employees is indicative of the problem. Beyond that, the claim that only 43 women alleged sexual harassment is simply untrue: Nearly half of the women who have issued sworn statements have alleged sexually demeaning conduct by executives of the company and that doesn’t even account for the untold number who were intimidated into keeping silent about the treatment they endured. Furthermore, much of this conduct took place at mandatory meetings and in public places where other women became involuntarily aware of it. It seems that Mr. Stitzer is the one living in a parallel universe, one where systemic pay and promotion discrimination and behavior demeaning to women are permissible.”
As for Signet’s performance during 2016, the jeweler suffered from the same shopping maladies affecting a number of brick-and-mortar retailers, especially those based in malls — namely lower than expected holiday sales and sluggish foot traffic.
Although the company saw a bump in net income last year to $543 million from $467.9 million, its available cash dropped to $987 million from $137.7 million a year ago.
Sales dropped by 2 percent to $6.4 billion while same-store sales declined by 1.9 percent for the year.
Signet chief executive officer Mark Light said 2016 was “challenging,” but the company is “adapting” to the retail environment and weak mall traffic and is focused on an omnichannel approach and its “digital ecosystem.”
As for 2017, Signet said it expects same-store sales to drop by single digits, and plans to close up to 170 stores, mainly in mall locations, and reopen between 90 and 115 locations outside of malls.