By Michelle Graff
michelle.graff@nationaljeweler.com
New York--An arbitrator ruled this week that a group of women can pursue claims challenging Sterling Jeweler Inc.’s pay and promotion practices as a class though she threw out claims that the alleged discrimination was intentional.

In a 118-page decision released Tuesday, arbitrator Kathleen A. Roberts ruled that the 12 claimants could proceed as a class in arbitration to determine if the Akron, Ohio-based retailer’s compensation and promotion practices have a “disparate impact on women.” Sterling has fought for years against having the case certified as a class.

If disparities are found for which there is no justifiable business reason, then the women will be eligible as a class to affect changes in Sterling’s practices and will be able to pursue claims for lost wages individually.  

In terms of alleged pay discrimination specifically, the class covers women who worked at Sterling between July 22, 2004 and the yet-to-be-set date of the trial, which will take place before the same arbitrator. In terms of alleged promotion discrimination, it covers women who worked at Sterling between Dec. 7, 2004 and the trial date.

What the arbitrator denied were the women’s claims of disparate treatment, meaning that the discrimination was intentional and part of an overall corporate culture that demeaned female employees.

In denying the women’s claims of disparate treatment, the arbitrator stated in her ruling that the claimants failed to provide the “significant proof” necessary to pursue claims of intentional discrimination. 

This burden of significant proof Roberts relied upon in this case was the one set in the Wal-Mart gender discrimination case, though she noted that the Wal-Mart decision is one that presents “substantial hurdles” for pursuing claims of intentional discrimination as a large class. 

The arbitrator wrote, “While the evidence in [the Sterling] case”--a case that includes particularly salacious claims that women were groped and grabbed, solicited for sex and expected to undress publicly at often-mandatory company events, as well as internal company memos acknowledging that the company paid women less than men--“may be in some respects stronger than the evidence presented in Wal-Mart, it fails to provide significant proof that Sterling operated under a general policy of discrimination.” 

Roberts called into question specifically the opinion of one expert for the claimants, James Outtz, stating that he cannot answer the “essential question” of what percentage of the employment decisions at Sterling are determined by a “gender-discriminatory corporate culture,” court papers show.

She also stated that Outtz’s conclusions are not supported by reliable methodology. Among other things, he disregarded about 600 declarations written by the company’s female employees that reflect a very different view of the company’s treatment of women. “His decision to disregard this evidence, without any explanation, at a minimum calls his objectivity into question,” Roberts noted in her ruling.

Both sides are claiming the arbitrator’s ruling as a victory.

Joe Sellers, an attorney representing the women, said it was an “enormous achievement” for his clients and a “very important case” that gives them the opportunity to affect broad changes in a company that’s a leader in its industry. 

Sterling, meanwhile, called the ruling “favorable,” pointing to the fact that the arbitrator rejected claims that Sterling had “systematically and intentionally” discriminated against female employees.  

Regarding the portion of the arbitration that Roberts did allow to move forward, company spokesman David Bouffard said, “Sterling is optimistic that it will be able to demonstrate that the case is without either factual or legal merit in the next phase of the proceedings. We will continue to vigorously defend ourselves.”





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