On July 12, 2012, three African-American former store-management employees of Wet Seal who had been terminated filed this lawsuit in the U.S. District Court for the Central District of California. The plaintiffs were represented the NAACP Legal Defense Fund and private counsel, and alleged that Wet Seal, Inc., and related corporations, which sell women's clothing in Wet Seal and Arden B. retail stores., had engaged in racial discrimination and retaliation in violation of 42 U.S.C. § 1981. The plaintiffs filed the retaliation claims on their own behalf and the discrimination claims as a class action on behalf of black current or former store-management employees. The complaint sought injunctive relief, including reinstatement and monetary relief in the form of back pay, front pay, attorneys' fees, punitive damages, and compensation for emotional distress.

The plaintiffs alleged that the defendant discriminated against black employees in hiring, pay, promotion, and discipline, in comparison to similarly situated white employees. Plaintiffs further argued that senior level company management discriminated against black employees by firing them on account of their race and without cause. Senior-level management had pursued a racially discriminatory brand image of white women, preferably with blond hair and blue eyes, especially in markets with a greater percentage of white clientele, by instructing various levels of management to "diversify" stores with largely black employees by hiring more white employees and firing black employees. The plaintiffs claimed that their difficulty in obtaining subsequent employment was due to retaliation for resisting the defendant's discriminatory policies, alleging that the defendant had failed to provide fair references, and in one case, even failed to verify employment.

On Jan. 9, 2013, the plaintiffs filed an amended complaint, that among other amendments, added another named plaintiff and new claims: a claim for discrimination under Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e) and claims for retaliation and hostile work environment under Title VII on behalf of individual plaintiffs.

On May 8, 2013, the plaintiffs filed a motion for preliminary approval of a class action settlement, preliminary approval of settlement class, appointment of plaintiffs' counsel as class counsel, approval of notice plan and distribution of notice, and setting schedule for final approval. The settlement addressed both the class action and individual claims. The terms of the proposed settlement provided for a payment of $7.5 million, which included up to $1.8 million for attorney's fees and costs and $120,000 for administration of claims. The proposed settlement included injunctive relief, including diversity, nondiscrimination, and investigation training; development of fair job-related evaluation criteria; and a dedicated phone line for verifying employment.

On June 10, 2013, a motion hearing was held before District Judge Andrew J. Guilford. The court granted class certification, appointed the plaintiffs' counsel as class counsel, and preliminarily approved the Settlement Agreement, and stayed all further litigation not related to the settlement approval process. Regarding the notice plan and distribution of notice, the court suggested several changes at the hearing that the parties adopted. On June 12, 2013, Judge Guilford signed the order, which included the following deadlines: class counsel was to file a motion for final approval of the settlement and Settlement Agreement by Oct. 18, 2013, and class counsel was to file a reply to any objection from class members no later than Nov. 11, 2013.

On Nov. 18, 2013, a final approval hearing was held. On Dec. 9, 2013, the court issued an order granting final approval of the settlement. The court awarded a total of $1,729,037.80 to class counsel, which included attorneys' fees and reasonable costs for work performed to date as well as future monitoring and enforcement through the three-year term of the settlement. The court also granted in part the fee application by the plaintiffs' original attorney - who had been terminated from the plaintiffs' litigation team on July 3, 2012, and had disputed the terms of the settlement agreement - and found that she was entitled to a total fee award of $70,962.20.

Over the 36 months of monitoring required by the settlement, the defendant filed periodic Monitor's Certificates of Compliance, in which the Monitor, the defendant's Vice President and Corporate Controller, certified to the court the status of the defendant's implementation of its programmatic initiatives with the Settlement Agreement. In the Dec. 11, 2014, Certificate of Compliance, the Monitor stated that it was satisfied that the defendant was complying with the Settlement Agreement.

The case is now closed.

Kenneth Gray - 06/12/2013
Elizabeth Greiter - 03/22/2018


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