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Race discrimination lawsuit against Wet Seal settled for $7.5M

Last summer, a lawsuit was filed against retailer Wet Seal, accusing the company of violating the rights of about 1,600 employees. The lawsuit claimed that Wet Seal executives were biased and encouraged stores to hire more managers and employees who fit the company's brand image of a white, thin, blond-haired and blue-eyed woman.

This bias among the retailer's executives had resulted in job losses for African-American women simply because of their race. This bias also led to race discrimination when African-American workers applied for promotions within the company, the lawsuit argued.

Since the lawsuit was filed nearly one year ago, the company has hired a new CEO. According to reports, the company has also recently decided to settle the race discrimination lawsuit.

The settlement was announced last week. According to reports, the clothing retailer will pay $7.5 million to settle the race discrimination lawsuit. This includes compensation for lost pay and promotion, emotional distress and termination.

After investigating the lead plaintiffs' complaints of bias and discrimination at Wet Seal, investigators discovered that company executives did indeed make discriminatory remarks about its African-American employees. Because the company had made it clear that it wanted more employees and managers who were white with blue eyes and blond hair, the executives and managers fired workers who did not fit this description, and other workers were denied promotions because they did not fit the company's desired image.

In addition to compensating about 1,600 past and current employees for the company's wrongdoings, the company has also agreed to hire more regional human resources directors to make sure employees are being treated fairly. The company said that it will also focus on providing employees with training on diversity in the workplace.

Source: USA Today, "Wet Seal settles bias suit with minority plaintiffs," Melanie Eversley, May 9, 2013