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Market Developments

Federal judge dismisses EEOC case vs. Sterling

By Michelle Graff

March 12, 2014

Buffalo, N.Y.--A New York federal judge has thrown out the Equal Employment Opportunity Commission’s claim that Sterling Jewelers Inc. engaged in a nationwide practice of paying its female employees less and passing them over for promotions.

In an order signed Monday in U.S. District Court for the Western District of New York, federal judge Richard J. Arcara stated that after considering the report and recommendation filed by Magistrate Judge Jeremiah J. McCarthy in January, statements from both sides and oral arguments, he has opted to dismiss the EEOC’s claim with prejudice for “the reasons set forth in Magistrate Judge McCarthy’s Report and Recommendation.”

The EEOC filed suit against Sterling Jewelers in September 2008 in U.S. District Court for the Western District of New York, accusing the jeweler of exhibiting a nationwide pattern of gender discrimination when it came to pay and promotions.

The suit was filed on behalf of some 44,000 female employees of Sterling Jewelers--making it the largest suit ever brought by the EEOC--and the EEOC said it had investigated, on a nationwide basis, claims of gender bias by the retailer.

Sterling denied the claims of discrimination and brought a motion stating that the EEOC investigated only one store in New York and two stores in Tampa, Fla. and did not conduct a thorough examination of the jeweler’s employment practices nationwide, as it had claimed.

In his ruling issued Jan. 2, McCarthy sided with Sterling, stating that the EEOC failed to prove it conducted a thorough, nationwide investigation of the retailer’s employment practices prior to filing the lawsuit, an assertion backed by Monday’s ruling by the federal court judge.

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The claim being dismissed with prejudice means the action is final at the district court level, though the EEOC could appeal, said attorney Gerald L. Maatman Jr., a partner at Seyfarth Shaw and the lead counsel for Sterling in the case.

“As defense counsel we are pleased with the ruling. We think it was well-reasoned and consistent with the evidence,” he said.

The EEOC said it has no comment.

A separate lawsuit filed by individuals charging Sterling Jewelers with discriminating against women in the workplace is still pending. 

Originally filed in U.S. District Court for the Southern District of New York in March 2008, prior to the EEOC case, the suit is in arbitration. 

Washington-based attorney Joe Sellers, one of the lawyers representing the claimants involved in this case, said a hearing took place at the end of February on their request for the case to proceed as a class action, which would include about 40,000 current and former Sterling employees. They are awaiting the arbitrator’s decision. 

The ruling in EEOC vs. Sterling has no impact on this case as it was based on the finding that the EEOC had conducted an insufficient investigation and not on the merits of the case, Sellers said.

Sterling has maintained throughout that it takes both lawsuits seriously and investigated the women’s claims thoroughly but found them to be without merit.

“We are confident they do not reflect our company’s environment, which is built on core values of fairness, opportunity, integrity and respect,” said David Bouffard, vice president of corporate affairs for Sterling parent company Signet Jewelers Ltd.