LOS ANGELES — In the continuing controversy of Abercrombie & Fitch, the retailer said Tuesday it has settled a class-action lawsuit with the California Labor Commissioner’s office for $2.2 million over claims it forced sales associates to buy and wear A&F branded clothing while working at its stores in California. State law requires employers to pick up the cost of a “uniform.”
The lawsuit was filed by state labor regulators on Monday as a formality to obtain a court order prohibiting A&F from violating state laws in the future. Settlement negotiations actually had been going on for more than a year-and-a-half.
The suit was filed on behalf of 524 full-time sales associates and 11,096 part-time workers, employed between Jan. 1, 1999, and Feb. 15, 2002. During that time, A&F’s dress policy encouraged employees to wear the A&F style and be consistent with the current season, according to the California Department of Industrial Relations’ Division of Labor Standards Enforcement. An investigation started in July 2000 by the DLSE revealed store managers were telling workers they must wear A&F clothing, said Miles Locker, an attorney for the labor commissioner’s office.
“We concluded early on that this was not an isolated problem with a small number of workers but a systematic statewide violation of California law,” he said.
In February 2002, the New Albany, Ohio-based retailer revised its “appearance/look policy” to explicitly state the company does not require associates to “buy or wear clothing, accessories or other items from our stores.” A&F agreed Monday to deposit $2.2 million in a bank account to be calculated and distributed by the DLSE within the next three months and sent to all workers employed during that three-year period.
In a statement, A&F said it settled the dress code allegations “without admission of wrongdoing in an effort to put the matter to rest,” adding, “Abercrombie has strongly denied that its policy violated California law but agreed to modify its policy in an effort to resolve this dispute. Both before and after implementing its revised policy, Abercrombie has offered discounts to its associates to encourage, but not require, them to purchase and wear Abercrombie clothes.”
A&F, currently operating about 600 U.S. stores — including 41 Abercrombie & Fitch doors and three Hollister units in California — with annual sales of $1.6 billion, has been in the hot seat. On June 16, a federal lawsuit was filed in San Francisco on behalf of nine students who claim the retailer discriminates in hiring and employing minorities. That pending lawsuit seeks unspecified damages, including back pay for employees who were allegedly fired on the basis of race. Then there was the controversy that emerged last year over A&F T-shirts featuring caricatures of Asian men wearing rice-paddy hats with the slogan “Wong Brothers Laundry Service — Two Wongs can make it white.” The retailer subsequently pulled the shirts and made a public apology.