Signet Jewelers is facing a new lawsuit over accounts of gender discrimination and harassment by female employees, but this time by investors.
Pension fund Irving Firemen’s Relief & Retirement System filed a proposed class action in Texas federal court late Tuesday claiming that Signet, its chief executive officer Mark Light and his predecessor Michael Barnes misled them on the extent of discrimination claims in long-running arbitration against affiliate Sterling Jewelers, that includes 69,000 women and dozens of accounts of sexual harassment.
The investors pointed to about 250 individual declarations made by male and female Sterling employees from hundreds of stores that “paint a nauseating, and stunningly consistent, picture of a company in which sexual harassment, including sexual assault, is not just tolerated but modeled at company functions by top executives, starting with the company’s chief executive officer, defendant Mark S. Light.”
While the declarations were under seal until late February, the investors said the accusations came to light in 2013 but Signet “has steadfastly denied and downplayed the allegations” in public comments and company filings.
“Behind closed doors, however, ‘[f]or the most part, Sterling has not sought to refute this evidence,’” the investors said quoting an interim arbitration ruling from 2015.
Signet, which also operates Kay Jewelers, Zales and Jared, has repeatedly denied the harassment allegations.
After the Washington Post published a 3,000-word article wading into claims by the class of employees that they were denied raises and promotions as part of a male-dominated executive culture that openly harassed women, Sterling pointed out that the arbitration is not formally considering the harassment claims and said an internal investigation left the allegations unsubstantiated.
During a subsequent call with Wall Street analysts going over the jeweler’s financial results, Signet chairman Todd Stitzer said the “board and management team have absolutely no tolerance for discrimination or harassment and we have had strict antiharassment policies in place for decades.”
But investors pointed to the publicity generated by the claims, and said the day of the Post report, Signet’s stock fell 13 percent to a closing price of $63.59, purportedly the company’s biggest one-day drop in eight years.
Moreover, the investors said by misleading the public on the discrimination litigation, Sterling’s stock traded at “artificially inflated priced between 2013 and 2017” and the recent drops have caused them economic harm.
Signet’s vice president of corporate affairs, David Bouffard, stated: “We believe the allegations are without merit and we will vigorously defend ourselves.”
The private arbitration of claims by current and former female Sterling employees that they were denied pay raises and promotions is ongoing.
Claims were first brought in 2008 by about a dozen employees in a New York federal court, but the case was moved to arbitration as a result of employment agreements.
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