Thursday, April 30, 2009
To report any concerns regarding discrimination by Abercrombie, please contact the Monitor, Fred Alvarez, at (650) 493-9300. $40 Million Paid to Class Members in December 2005 in Abercrombie & Fitch Discrimination Lawsuit Settlement
In December 2005, the Claims Administrator in the Gonzalez v. Abercrombie & Fitch discrimination lawsuit settlement sent award checks to the over ten thousand class members who submitted valid claim forms in accordance with the process set forth by the Court in the April 2005 settlement order.
Checks ranged in size from several hundred dollars to several thousand dollars, in proportion to Class members' damages and their contributions to the prosecution of the case.
If you have moved since you submitted your claim form, it is possible that a check was mailed to your past address. Please note that the checks became void after June 15, 2006, regardless of when they are received.
The Importance of Standing Up to Discrimination in the Workplace
Our attorneys have prosecuted and continue to investigate large-scale employment discrimination class actions. We have represented individuals and large classes of workers and applicants against companies in retail, financial services, food & beverage, transportation, and other industries who have discriminated on the basis of race, ethnicity, gender, and other grounds.
If you are aware of widespread discrimination by a company anywhere in the United States, please contact us via email or by telephone at 1-800-541-7358 or 1-415-956-1000. We are available to discuss your experience with you, and, if appropriate, represent you in a discrimination case. However, there is no guarantee that we will be able to represent you.
Summary of the Settlement of the Abercrombie & Fitch Class Action Lawsuit
On April 14, 2005, Judge Susan Illston of the U.S. District Court for the Northern District of California granted final approval to a settlement of the class action lawsuit Gonzalez v. Abercrombie & Fitch. The settlement requires the retail clothing giant to pay $40 million dollars to Latino, African American, Asian American and female applicants and employees who charged the company with discrimination.
The settlement also requires the company to institute a range of policies and programs to promote diversity among its workforce and to prevent discrimination based on race or gender. Abercrombie & Fitch Co. is a clothing retailer marketing to young adults, teenagers and children. It employs over 22,000 employees, most of whom are college-age adults, in over 700 stores throughout the United States.
Ongoing Consent Decree Governs Abercrombie's Employment Practices into at Least 2009
The Consent Decree (settlement agreement) contains provisions related to the recruitment, hiring, job assignment, training, and promotion of Abercrombie & Fitch, Hollister, and abercrombie kids employees. The Decree is effective immediately, pursuant to the Court's order. An appointed Monitor will regularly evaluate and report on Abercrombie’s compliance with the provisions in the Consent Decree. These provisions include:
* "Benchmarks" for hiring and promotion of women, Latinos, African Americans, and Asian Americans. These benchmarks are goals, rather than quotas, and Abercrombie will be required to report on its progress toward these goals at regular intervals;
* A prohibition on targeting fraternities, sororities, or specific colleges for recruitment purposes;
* Advertising of available positions in publications targeting minorities of both genders;
* A new Office and Vice President of Diversity, responsible for reporting to the CEO on Abercrombie’s progress toward fair employment practices (the Office has already been created, and the VP has been hired and begun work);
* The hiring of 25 recruiters who will focus on and seek women and minority employees. (At least 24 of the 25 have already been hired, and are working.);
* Equal Employment Opportunity (EEO) and Diversity Training for all employees with hiring authority;
* Revision of Performance Evaluations for managers, making progress toward diversity goals a factor in their bonuses and compensation;
* A new internal complaint procedure; and
* Abercrombie marketing materials will reflect diversity by including members of minority racial and ethnic groups.
In addition, Abercrombie created a $40 million Settlement Fund for distribution to individual class members. Abercrombie will also pay attorneys' fees and costs associated with monitoring compliance during the time that the Consent Decree is in effect (4.5 to 6 years from Final Approval, depending on Abercrombie’s progress). This will total approximately $10 million, bringing the total amount Abercrombie must pay to approximately $50 million. Click here to read the court-approved Consent Decree [pdf format]. The provisions in the Decree are currently in effect.
About Lieff Cabraser Heimann & Bernstein, LLP
Founded in 1972, Lieff Cabraser Heimann & Bernstein, LLP is a national law firm of over 50 attorneys with offices in San Francisco, New York and Nashville. We represent plaintiffs in federal and state courts across America in employment discrimination cases. Our lawyers have been at the forefront of innovative and significant lawsuits advancing the rights of employees nationwide. To learn more about Lieff Cabraser, click here.
Notice on Trademarks
"Abercrombie" and "A&F" are registered trademarks of Abercrombie & Fitch Co. These trademarks are used for informational purposes only. This website is in no way affiliated with Abercrombie & Fitch Co.
AT the entrance to almost every shopping mall in the country, you will find a directory that, if you are spatially coordinated, will give you an approximate lay of the land. You can gauge the distance from Abercrombie & Fitch to its younger-skewing cousin, Hollister, or its older cousin, Ruehl, and find the way to their closest competitors in the teenager and young adult category, Aéropostale and American Eagle Outfitters.But you will be no closer to discerning what drives the modern youth from one store to the next; what differentiates one’s frayed cargo shorts from another’s; or why one of them, Abercrombie, is facing a consumer revolt, while others are paradoxically upbeat. A clue: It has to do with price.
This spring, spending by teenagers, a closely studied but rarely understood segment of the population, is off by 14 percent, a direct reflection of the economy, according to a report this month by the investment bank Piper Jaffray. And that is having a profound effect on an already unraveling mall culture, where deep discounters and stores known for heavy promotions are suddenly the popular destinations and aspirational brands are struggling to fit in.
Teenagers are noticing. “Labels are becoming less and less of a priority for people throughout my school,” said Chelsea Orcutt, 17, a senior at the Mount Saint Mary Academy near Buffalo, where the Walden Galleria shopping center includes all of the above-mentioned stores, plus many more options for teenagers who favor a sunny West Coast surfer style or those who prefer a goth ensemble to highlight their black nail polish and lipstick. Ms. Orcutt, a bit less casual in her personal style, favors Macy’s, Old Navy and American Eagle, which, she pointed out, keep teen budgets in mind.
“Labels and designer purses — I’m not seeing them as frequently,” said Ms. Orcutt, who had participated in a survey on teen spending for the Hearst Magazines network of Web sites and was approached to speak about the subject for this article. When asked why that might be, she replied, without hesitation, “because of the crisis.”
During years of rampant consumerism, where teenagers shopped was often more closely tied to what was happening in the pages of US Weekly or InStyle than their families’ financial circumstances. Empires like Abercrombie & Fitch were built on the premise that their products, even $80 jeans and $30 T-shirts with provocative graphics, would be perceived as luxury items if they were sold in the right way. But as teenagers’ priorities rapidly shift away from brands they now perceive as too expensive, the pecking order of mall stores has changed.
At Garden State Plaza in Paramus, N.J., on a Friday afternoon, Abercrombie & Fitch was nearly empty. As two young men walked out of the dimly lighted store, past a photograph of a shirtless man with his hand submerged beneath the waistband of his jeans, one of them, trailing the eye-watering scent of the store’s perfume, said, “This stuff is too expensive.”
At Ruehl, which is Abercrombie’s more upscale store for slightly older consumers (and even darker inside), there were no customers at all. But at Hollister, where the prices average 12 to 15 percent lower, the line at the register was seven deep.
To maintain its prestigious image, Abercrombie has stood alone among mall retailers in not blaring its sales — a strategy that Wall Street analysts have blamed for its current decline. The company reported a 34 percent drop in sales for March at stores open at least a year, the worst performance of mall retailers that month. Abercrombie executives did not respond to written questions about whether the brand — as some business columnists suggest — has lost its cool. In the past, the chain has said it doesn’t want to tarnish its image with big discounts, but the risk is that consumers may retain the habit of thriftiness even after the recession ends.
“I’m not sure customers are going to ever go back to shopping the way they once did,” said Betsy McLaughlin, the chief executive of Hot Topic, a competitor for the teen market, which posted a gain of 7.1 percent in March, largely on the strength of licensed products tied to the “Twilight” vampire series. “There’s just so much retail out there. I think the people who will win are the ones who provide something different. It’s not just a price war.”
The styles at Abercrombie & Fitch, which have changed little in the last decade, are similar to those at the company’s Hollister or Ruehl stores, except for the prices and logos. In the same mall, there are plenty of retailers that specialize in Abercrombie-esque casual-collegiate-cum-surfer-dude styles for even less. A new store, WHO.A.U., sells frayed cargo shorts and appliquéd T-shirts that are displayed next to black-and-white portraits of hunky shirtless models, ahem. And behind the register at the Aéropostale store in Paramus is a poster showing a frolicking group of teenagers, like a tamer version of Abercrombie.Even the clearance items at Abercrombie do not exude the promotional fervor that can be found at American Eagle, which has a sign up front noting its shorts are under $25; or Aéropostale, where banners announce two-for-one bargains. Aéropostale also reported a sales increase last month, up 3 percent, a success that Mindy Meads, the company’s president, attributed to the right combination of product and value.“We get the right looks,” she said. “At the same time, we’re very mom-friendly when it comes to the wallet.”
So you may see a $30 T-shirt from Abercrombie & Fitch with its logo printed up the side and a nearly identical style from Aéropostale for $19.50. And, given the companies’ recent performances, you may wonder if one is now cooler than the other and, for that matter, whether tomorrow’s teenagers will even recognize the difference.
“I’m interested in kids who are growing up now and who are going to come into their years of spending during the recession,” Ms. McLaughlin of Hot Topic said. “What does that mean for how they will spend when they become teenagers? That’s the question.”
It is fairly clear that Hot Topic, which sells an assortment of studded black vests, Hello Kitty hoodies and body jewelry and colored hair extensions, does not compete for the same customer as Abercrombie & Fitch. Its most popular items right now are tutus and swimsuits. But Buckle, another mall store, has been doing even better with teenagers, gaining ground with a broad assortment of labels and styles, including Lucky Brand, Betsey Johnson, Diesel and Roxy. Its sales were up 14.7 percent last month.
Buckle, based in Kearney, Neb., has largely distinguished itself with customer service and styles that change significantly each season. Its salesclerks are trained to assist customers in putting together a complete outfit by showing which pair of jeans would look best with a top or work best with a particular style of shoes. The hot styles this spring? Gladiator sandals and light knit tops for women, and flip-flops and patterned shorts for men.
“Even if something sells very well for us, we are apt not to go back to that,” said Pat Whistler, the vice president for women’s merchandising. “The brands are important, but the fashion part is equally important.”
Speaking about their attitudes toward shopping last week, several high school students said they liked to shop at Abercrombie & Fitch and thought the brand was still cool, despite the comparatively high prices, while others thought it was too expensive and didn’t like the hyper-sexualized atmosphere of the stores. But almost all said they were spending less on clothes.
Ms. Orcutt recently spent $160 on a hot pink prom dress — the most expensive dress she had ever bought.
“I’m definitely feeling a little guilty,” she said.
Several other students contacted through Hearst are saving money for college expenses, choosing to buy their books or laptops instead of clothing or asking their parents for money. They said they might be more likely to shop for cute, inexpensive things at stores like Forever 21 than to buy designer jeans, as did Stefani Graf, 17, from Annapolis, Md., and Abby Toraason, 18, from Peru, Ind., who said she has to travel an hour or more to a decent mall.
“It’s not very expensive, and yet the clothes are still cute,” Ms. Toraason said.
Good news for retailers is that about the only area where the teenagers said they were unlikely to economize was their prom dress. Anecdotally, though, things don’t look so promising for limousine rentals.
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