Plaintiffs to Detail Abercrombie Deal
Legal groups are scheduled to announce today the details of a proposed multimillion-dollar settlement of a lawsuit alleging that Abercrombie & Fitch Co.'s hiring and employment practices discriminated against minorities.
The retailer of clothing for teenagers said last week that it had signed a consent decree settling class-action lawsuits for slightly less than $50 million. It took a $32.9-million charge during its third quarter ended Oct. 30 as a result of the settlement, reducing per-share profit by 22 cents.
The Mexican American Legal Defense and Educational Fund, National Assn. for the Advancement of Colored People, Asian Pacific American Legal Center of Southern California and a plaintiffs’ law firm filed the suit in U.S. District Court in San Francisco in June 2003. It accuses Abercrombie of maintaining a disproportionately white sales force and discouraging applications from minorities.
The suit subsequently was consolidated with other cases filed by the U.S. Equal Employment Opportunity Commission and two other law firms.
The San Francisco lawsuit, filed on behalf of nine Asian and Latino plaintiffs of college age, described the “A&F; look” as a virtually all-white image used by Abercrombie to market its clothing and implement discriminatory employment policies.
“When people who do not fit the ‘A&F; look’ inquire about employment, managers sometimes tell them that the store is not hiring, or may provide them with applications even though they have no intention of considering them for employment,” according to the lawsuit.
Robert Singer, Abercrombie’s president, told analysts last week that the company “decided to settle this suit because we felt that a long, drawn-out dispute would have been harmful to the company and distracting to management.”
A spokesman for Abercrombie declined to comment further.
The settlement is subject to a judge’s approval.
Shares of New Albany, Ohio-based Abercrombie rose 33 cents Monday to $45.01 on the New York Stock Exchange.