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Charlotte retailer agrees to multimillion-dollar settlement over discrimination claims

The Cato at 3124 Eastway Crossing Drive in Charlotte. The U.S. Equal Employment Opportunity Com­mission said Monday that Charlotte-based retailer Cato Corporation has agreed to a $3.5 million settlement after a “nationwide, systemic investigation” into the company uncovered discrimination against pregnant employees and others with disabilities.
The Cato at 3124 Eastway Crossing Drive in Charlotte. The U.S. Equal Employment Opportunity Com­mission said Monday that Charlotte-based retailer Cato Corporation has agreed to a $3.5 million settlement after a “nationwide, systemic investigation” into the company uncovered discrimination against pregnant employees and others with disabilities. kperalta@charlotteobserver.com

Charlotte-based women’s fashion retailer Cato Corporation has agreed to a $3.5 million settlement with the U.S. Equal Employment Opportunity Com­mission, the agency said Monday, after a “nationwide, systemic investigation” uncovered discrimination against pregnant employees and workers with disabilities.

Cato denied reasonable accommodations for those employees and made certain workers take unpaid leaves of absence and/or terminated them because of their disabilities, the EEOC said in announcing results of a joint investigation by the agency’s Chicago and Philadelphia offices.

“Giving employees a job modification that allows them to continue working can be a critical reasonable accommodation for pregnant women or people with disabilities when they really need that paycheck,” EEOC Chicago District Director Julianne Bowman said in a statement.

Publicly-traded Cato, founded in 1946, is one of Charlotte’s oldest retailers. The company operates about 1,300 stores in 32 states under names that include “Cato”, “Versona” and “It’s Fashion Metro,” according to its website.

It’s not the first time the company has been accused of discriminatory practices.

Last year, an activist shareholder and an organization pushing for more women on company boards criticized Cato for its all-male board.

Cato’s new settlement with the EEOC will provide for a claims process to distribute the $3.5 million to employees who were terminated because of their pregnancies or disabilities, the agency said.

The company has also agreed to revise its employment policies to more fully consider whether medical restrictions of pregnant employees or those with disabilities can be reasonably accommodated, according to the EEOC.

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And the firm will conduct companywide training for more than 10,000 of its employees and report to the EEOC periodic­ally over three years on its responses to requests for reasonable accommodation.

The EEOC said in a statement it commended Cato for entering the voluntary settlement and “making meaningful policy changes.”

In a statement Monday afternoon, Cato said it fully cooperated with the EEOC’s review, which stemmed from claims by employees between 2011 and 2013. The company said it agreed to the settlement to expedite a resolution for all parties so the firm could remain focused on its business.

“Respect for all associates and a commitment to provide accommodations to associates who need them are key values at Cato. We have worked with the EEOC to update our policies to ensure associates are properly granted leave and accommodations.

“We are also in the process of providing training for our Human Resources team, and for all associates to ensure they understand their rights and Cato’s process for requesting accommodations.”

Other concerns

Last year, Ohio-based shareholder Needmor Fund berated Cato over its board makeup, describing it as “all white men“ and saying that it did not “reflect a commitment to racial and gender diversity.”

At the time, CEO John Cato said the company valued diversity and inclusion and had a strong board in place but that the retailer would make every effort to broaden the background of the board as openings arose.

Also last year, the Thirty Percent Coalition, an organization pushing for women to hold 30 percent of public company board seats, urged John Cato to increase the board’s diversity.

In April, Queens University of Charlotte President Pamela Davies joined Cato’s board.

And shareholder Walden Asset Management of Boston lashed out last year at Cato for preventing a shareholder vote on a proposal requesting the retailer specifically prohibit in its written employment policies discrimination based on sexual orientation and gender identity.

Boston-based Walden said at time that its proposal was not motivated by concerns of workplace discrimination at Cato. Rather, Walden said it was worried about Cato being among “a shrinking minority” of companies whose nondiscrimination policies don’t include sexual orientation and gender identity.

The company said at the time said that its Equal Opportunity Employer policy prohibits discrimination based on “race, color, religion, ancestry or national origin, disability, age, sex, or any other legally-protected classification” in its hiring and terms and conditions of employment.

Deon Roberts has covered Charlotte’s financial services industry for The Charlotte Observer since 2013. His beat includes Bank of America and Wells Fargo. He attended Loyola University in New Orleans and is a native of Lafitte, La.
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