Rent-A-Center to settle gender suit for $12.3 million
By Clint Engel -- Furniture Today, November 4, 2001
PLANO, Texas — Rent-A-Center has settled a class-action gender discrimination lawsuit, agreeing to pay $12.3 million to thousands of female employees and job applicants.
The company did not admit to liability in the case.
Under the settlement agreement of Margaret Bunch v. Rent-A-Center, the money would go to some 4,600 women who are or were employed by the company, as well as others who applied for a job there between April 19, 1998, and Oct. 1, 2001. The settlement, subject to federal court approval, doesn't included attorneys' fees or administration costs.
The 2,294-store rent-to-own giant said it anticipates recording a fourth-quarter, one-time charge estimated at $15 million to $16 million as a result of the settlement.
"While our track record in providing a nondiscriminatory workplace is strong, we believe the proposed settlement is in the best interests of Rent-A-Center given the costs and uncertainty of litigation," said Mitch Fadel, president.
Any class member can opt out of the agreement, and Rent-A-Center has the right to terminate the settlement if more than 92 members elect to do so.
As part of the settlement, the company also said it will commit to policies and practices designed to assure gender equity. These include adopting a policy against gender discrimination, instituting employee training on gender-discrimination issues, posting internal promotion opportunities for all employees, and eliminating specific weight lifting qualifications as a condition of employment.
The company is facing a similar lawsuit in federal court in East St. Louis called Wilfong v. Rent-A-Center. Wilfong class members may be covered by the Bunch settlement. If they don't opt out of the Bunch settlement, they would be entitled to payments but couldn't receive additional recovery for claims in the Wilfong case, the company said.
In the Wilfong case, filed last year, 19 plaintiffs alleged that Rent-A-Center was engaged in gender discrimination after its acquisition of Thorn Americas. It seeks actual damages of $410 million and other unspecified damages, according to a Securities and Exchange Commission document.
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