Rent-A-Center settles discrimination suits
By Furniture Today Staff -- Furniture Today, March 17, 2002
PLANO, Texas — Rent-to-own giant Rent-A-Center said it will pay $47 million to more than 5,300 women to settle class-action gender discrimination lawsuits.
Under terms of the proposed settlement, the 2,286-store company admits no liability, but will pay the money to about 5,300 female employees and a yet-to-be determined number of female applicants who were employed or applied for jobs during a four-year period beginning April 19, 1998.
The total includes $12.3 million the company agreed to pay in a settlement under a pending federal case in Kansas City, Mo. Rent-A-Center recorded a $16 million charge in the third quarter of last year connected to the previous lawsuit, but the new settlement has increased the pre-tax charge for the lawsuits by $36 million.
The after-tax effect of the added amounts is a non-recurring charge of about $22.3 million that will show up in the company's results for 2001.
"This settlement will allow us to put this litigation behind us so that we may continue to focus on realizing the profitability plan that we began when I returned to the company in October 2001," said Mark Speese, Rent-A-Center chairman and chief executive officer.
Speese said RAC doesn't tolerate discrimination, but because of the uncertainty of litigation, "we felt it was in our best interest to settle these matters."
Rent-A-Center President Mitch Fadel added that RAC is endorsing steps recommended by the Equal Employment Opportunity Commission in the case, including filling up to 10% of its job vacancies over the next 15 months with qualified women who were parties to the suit.
It also is expanding its human resources department and will seek women for what is now an all-male board of directors.
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