On September 9, 2008, in response to charges filed by 18 women, the Equal Employment Opportunity Commission (EEOC) filed this lawsuit against Sterling Jewelers, alleging violation of Title VII of the Civil Rights Act of 1964 based on discriminatory employment practices. Specifically, the EEOC claimed that Sterling Jewelers intentionally discriminated against female sales employees by maintaining a system of excessively subjective promotion and compensation decisions and thereby permitting or encouraging managers to deny equal access to promotion and compensation to female employees. The EEOC claimed in the alternative that Sterling Jewelers maintained an excessively subjective system that had an illegal disparate impact on female retail sales employees. The EEOC sought injunctive and monetary relief, including back pay, promotion, compensation for lost benefits and emotional suffering, and development of policies and programs to provide equal opportunities to women and eliminate the effects of past discrimination. The EEOC also sought to recoup the cost of its litigation. The litigation was brought on behalf of the 18 charging parties and all other similarly situated female employees.

The progress of the case has been slow because of numerous disputes over procedure and discovery.

On January 6, 2010, the Court (Judge Richard J. Arcara) denied Sterling's motion to dismiss all claims for conduct preceding the statute of limitations period for the first party to file charges with the EEOC, holding that the EEOC was not bound by the statute of limitations, which applied only to individuals. 2010 WL 86376 (W.D.N.Y. 2010)

On July 15, 2010, the Court (Magistrate Judge Jeremiah J. McCarthy), among other things, allowed the charging parties to intervene in the proceedings to participate in argument over the scope of a protective order. 2010 WL 2803017 (W.D.N.Y. 2010). For contractual reasons the charging parties were pursuing their claims separately in a class-action arbitration and wanted to be able to receive discovery information from the EEOC, though they were prohibited from sharing information with the EEOC. See Jock v. Sterling Jewelers, Inc.. The protective order was issued on July 23, 2011.

On April 25, 2011, the Court (Judge Richard J. Arcara) bifurcated the trial and discovery into two phases, liability (Stage I) and damages (Stage II). Stage I generally covered the issue of whether there was a disparate impact on female retail employees at Sterling to establish a pattern or practice of discrimination, while Stage II would occur only if the EEOC prevailed at phase I and covered the individual aspects of each employee's case along with whether there was a legitimate business reason for the disparity. The EEOC sought to have the punitive damages determination included in phase I, but the Court rejected that approach. 788 F.Supp.2d 83 (W.D.N.Y. 2011).

The bifurcation was followed by extensive discovery disputes from 2011 to 2012.

On September 25, 2013, Sterling moved for partial summary judgment on the grounds that the EEOC failed to satisfy its obligation to conduct an adequate, nationwide investigation of Sterling's employment practices. To this, the EEOC stated that courts need not inquire into the sufficiency of the investigation itself.

On March 10, 2014, the Court adopted the Magistrate Judge’s Report and Recommendation, which granted in part and denied in part the motion for summary judgment. The court granted partial summary judgment on the claim that the EEOC failed to prove that it satisfied its statutory obligation to conduct a pre-suit investigation, and it denied Sterling’s motion to strike portions of the EEOC’s Statement of Facts for the reason that it contained “statement[s] that rely on an admissible evidence not in the record, as well as legal argument and generalized conclusory statements.” 3 F.Supp.3d 57

On May 15, 2014, the EEOC filed an appeal, arguing that the district court erred in granting summary judgment because the magistrate judge improperly reviewed the sufficiency of the EEOC's investigation, rather than whether there was an investigation or not.

The Second Circuit Court of Appeals agreed and decided on September 9, 2015, to vacate the district court's summary judgment order, thus remanding the case for further proceedings. 801 F.3d 96

On May 4, 2017, the EEOC and Sterling entered into a consent decree. The court maintained jurisdiction for a period of three years and three months. Provisions included enjoining Sterling's conduct, the appointment of an employment practice expert to oversee and recommend changes within Sterling, training, and further additional internal procedures for implementing equal employment practices. While there was no award of attorney's fees, Sterling agreed to bear all expenses that it would incur to implement the provisions of the consent decree.

In 2018, a dispute arose between Sterling and the EEOC regarding Sterling's rejection of a merit pay program that the EEOC had proposed pursuant to the consent decree. The EEOC claimed that Sterling had not provided a legitimate business reason for rejecting the proposal. The parties submitted the issue to Fred Alvarez through their mutually agreed upon dispute resolution mechanism. Mr. Alvarez issued a decision on June 19, 2019, holding that Sterling had not demonstrated that its alternative merit pay program would be less adversely impactful to their female retail sales employees than the EEOC's proposal.

After the EEOC sought relief from Sterling, the parties agreed to extend the term of the decree for 15 months until November of 2021 in order to verify Sterling's implementation of the new merit pay compensation program. On March 11, 2020, Judge Arcara granted the extension.

The consent decree remains in force.

Kenneth Gray - 06/14/2013
Jennifer Huseby - 10/11/2018
Jonah Feitelson - 04/17/2020


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