Sterling Jewelers, parent company of Kay Jewelers, Jared and Zales resolve sexual harassment, pay discrimination case

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(NEW YORK) — Sterling Jewelers, the multibillion-dollar parent company of shopping mall stalwarts Kay Jewelers, Jared and Zales, agreed to resolve a legal dispute involving, among other things, allegations of promotions traded for sexual favors.

Tens of thousands of current and former employees sued in a class arbitration that included sexual harassment accusations against senior executives and wage violations. The class grew to 68,000 plaintiffs who claimed women were discriminated both in compensation and in promotions.

The company was also accused of having a policy “prohibiting employees from discussing their pay with each other,” which “made it difficult for women to identify instances where they were paid less than male employees performing the same job.”

Sworn statements also described a corporate culture in which annual managers’ retreats allegedly became no-spouses allowed “booze fests” where male executives “prowled around the [resort] like dogs that were let out of their cage,” and that “there was no one to protect female managers from them,” arbitration documents show.

The alleged incidents took place between late 1990s to the 2000s, according to the sworn statements.

Ohio-based Sterling Jewelers and the law firm Cohen Milstein Sellers & Toll PLLC announced the agreement, which calls on the company, a subsidiary of UK-based Signet Jewelers, to pay $175 million. Of that, $125 million would be split among the class members and the rest would go to the lawyers.

The agreement is subject to the arbitrator’s approval.

“For the past four years, we’ve been successfully transforming Signet’s business model and culture. I want to thank our dedicated team members for helping to create our welcoming and inclusive environment where everyone is invited to be their authentic self. We believe prioritizing diversity, equity and inclusion grows high-functioning teams and fosters a culture of appreciation and development,” Gina Drosos, CEO of Signet Jewelers, said in a statement. “This settlement is an important step in bringing closure to a nearly 15-year-old case.”

Signet has discontinued the pay and promotions practices at issue in the lawsuit and offered mentorship and leadership training for women.

“This settlement provides for significant monetary relief for our clients and ensures that the practices that gave rise to this case will not recur. And we applaud Sterling Jewelers for undertaking important and meaningful changes to its workplace policies, which have moved it forward as a leader in gender equality,” said Joseph Sellers, of Cohen Milstein Sellers & Toll PLLC.

ABC News’ Kelly McCarthy contributed to this report.

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