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Top 10 most expensive discrimination settlements of 2013

In 2013, the cost of the 10 most expensive discrimination class action settlements totaled over $638 million

Privately initiated discrimination lawsuits are not uncommon in the United States, and while they were down year-over-year, the number of filings in 2013 was still significant and costly for businesses.  According to Seyferth Shaw LLP’s 2014 Workplace Class Action Litigation Report there were 12,311 discrimination class action lawsuits filed in 2013, dipping from 14,260 in 2012. As a result of the astronomical costs and potential bad press associated with litigation, many of these cases were settled out of court. And in 2013, the cost of the 10 most expensive settlements totaled over $638 million. With money like that on the line, the roster is a great indicator of what companies will want to ensure their policies prevent against. Let’s see how that breaks out.

NEXT PAGE: Merrill Lynch and Bank of America

Photo of Bank of America ATM Machine by Brian Katt

1. $160 millionMcReynolds, et al. v. Merrill Lynch & Co.

The largest settlement of 2013 has its roots eight years earlier, when in 2005, broker George McReynolds accused Merrill Lynch & Co. of giving white brokers more lucrative accounts while denying black employees equal pay and career advancement opportunities. McReynolds filed a lawsuit on behalf of 700 black brokers who worked for Merrill. Before the suit was settled out of court in August, it had seen two appeals in the Supreme Court and survived Merrill Lynch's acquisition by Bank of America in 2009.

2. $39 millionCalibuso, et al. v. Bank Of America

In 2010 a group of female advisors lead by Judy Calibuso at the newly acquired Merrill Lynch unit of Bank of America (BoA) filed suit for what they alleged was systematic discrimination. The plaintiff’s contended that policies and practices at their workplaces were designed to pass over women for business opportunities and advancements. In addition to the money paid to the class, BoA was also ordered to have its programs reviewed by an independent consultant for three years. The settlement was finalized in December.

NEXT PAGE: Costco and Wet Seal


3. $8 millionEllis, et al. v. Costco Wholesale Corp.

A testament to the length of time it can take for a class action lawsuit to work itself from certification to resolution, Costco’s big settlement case last year took over a decade to complete. An initial complaint about the way Costco selected potential managers and allegedly discouraged females from applying was filed in 2002, the actual suit was filed in 2004, and the class was not certified until September 2012. In December, the settlement, which was intended for those who had been affected by the alleged discriminatory practices was finalized. Costco also promised to reform its internal hiring process.

4. $7.5 millionCogdell, et al. v. The Wet Seal Inc

Following an Equal Employment Opportunity Commission investigation in 2012, which found evidence that executive management had sought to maintain the "the Armani look" (code for blonde and blue-eyed) for its store, the company quickly opted to settle in the class action discrimination case.  The lawsuit alleged that the company had gone out of its way to fire black store managers in an attempt to maintain that image. The company called the settlement a “no fault resolution” but promised to evaluate it position as a result.

 NEXT PAGE: Los Angeles and the U.S. Postal Service

Los Angeles Police

5. $6 millionCarr, et al. v. City Of Los Angeles

Following a dispute with his wife in 2002, Phillip Carr, a Los Angeles police officer, was suspended on domestic violence charges. Carr’s wife was also employed by the city of Los Angeles, which Carr contends impacted the punishment he received following the incident. Carr alleged that the way the case was handled deprived him of his constitutional rights of cross-examination and confrontation. He also argued the punishment was time-barred.  In April of 2013, he settled with the city.

6. $4.5 millionHubbard, et al. v. U.S. Postal Service

Disability discrimination is growing area of litigation risk, and perhaps as a sign of the times this case revolved around the accommodations afforded to deaf and hard-of-hearing workers of the United States Postal Service. The suit alleged that workers with hearing problems were not given provided with technologies and services that would have helped them perform their duties, and that they were frequently subject to scrutiny from other workers at the postal service. The case was settled in July of 2013

 NEXT PAGE: Chicago and Connecticut


Chicago Fire Department

7.  $3.7 millionVasich, et al. v. City Of Chicago

Firefighters need to be physically fit to do their jobs, however this lawsuit alleged that the test was designed more as an opportunity for the Chicago Fire Department to discourage potential female firefighters rather than find new recruits. The suit alleged that the test discriminated against women and was unlawful because it was not related to job performance or predictive of who would succeed as a firefighter. The city settled with the class in December after two years in court.

8.  $3.1 millionEasterling, et al. v. State Of Connecticut, Department Of Correction

Similar to the Chicago case, this suit alleged that the a physical fitness test composed of a 1.5 mile run required by the Connecticut Department of Corrections was not a business need, and that it discriminated against female candidates. As a result over 200 women who applied for a Correction Officer position in 2004 o4 2006, were certified for the class. The settlement was finalized in July.

 NEXT PAGE: New York and Richmond 


9. $1.3 millionMonroe, et al. v. City Of New York

Another lawsuit involving allegations of sexual discrimination against a fire department, in 2006 five ranking female officers alleged that they had been passed over for advancement because they were women. Settled in June, the women alleged that despite their outstanding service records they lost promotions to other less qualified candidates that were men. They also accused the Fire Department of New York of posting jobs where they were not widely available for internal candidates to see, discouraging application.

10. $1 millionBradley v. City Of Richmond

Brought by eight of African-American pipefitters employed by the City of Richmond, Va., this suit contended that the public utilities department had categorically discriminated, harassed and retaliated against the workers.  An investigation by the human resources department released five months later confirmed the employees had been subject to open use of racial epithets by white employees and supervisors, as well as favoritism toward whites in hiring and promotion. The settlement was completed in July.

Executive Editor

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Chris DiMarco

Chris DiMarco, Executive Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content...

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