Kevin C. McCormick, Editor
Whiteford, Taylor & Preston L.L.P.

Vol. 18, No. 8
May 2008

SETTLEMENTS AND VERDICTS OF NOTE

Lockheed Martin to pay $773,000 for firing eight employees because of age

On April 7, the Baltimore office of the Equal Employment Opportunity Commission (EEOC) announced the settlement of its age discrimination lawsuit against Lockheed Martin Global Telecommunications for $773,000.

The lawsuit, filed in the U.S. district court in Baltimore, charged the Bethesda- based employer with violating the Age Discrimination in Employment Act (ADEA) when it discriminated against eight employees, ages 47 to 65. The workers were fired during a reduction in force implemented in October 2000. The back-pay remedies received by the employees are in addition to severance already paid.

Through a separate consent decree filed last year to settle retaliation claims in the lawsuit, Lockheed Martin paid $131,000 in damages to two former employees whose severance was withheld because they had pursued administrative complaints with the EEOC. The agency had obtained a dismissal on the retaliation issue, while the age discrimination claims had been scheduled to go to trial in June. With the settlement of these claims, the lawsuit is now resolved in its entirety.

Under the terms of the consent decree, which is in effect for a period of three years, Lockheed Martin is prohibited from discriminating against any of its employees or applicants on the basis of age. Additionally, all employees will be required to attend a training program focusing specifically on age discrimination in all aspects of employment.

Interestingly, Lockheed Martin Global Telecommunications ceased operations in 2002. The consent decree is written to take effect immediately in the event that it resumes active operations of its business and 20 or more employees, the minimum number of employees required to trigger ADEA coverage. EEOC v. Lockheed Martin Global Telecommunications, Inc., Civil Action No. 05-CV-00287-RWT, consent decree approved April 3, 2008.

Landmark race discrimination suit costs Walgreens $24 million

On March 25, a federal judge in St. Louis granted final approval of a sweeping consent decree resolving a class race discrimination lawsuit filed by the EEOC against Walgreen Company, the national drugstore chain based out of Deerfield, Illinois. The decree, one of the largest monetary settlements of a race case by the EEOC, provides for the payment of more than $24 million to thousands of African-American workers and mandates an order designed to improve the company's promotion and store assignment practices.

The EEOC filed its lawsuit in March 2007, alleging that Walgreens discriminated against African-American retail management and pharmacy employees in promotion, compensation, and assignment. The decree entered by the court resolves the EEOC's litigation and a private class suit filed in June 2005 on behalf of 14 African- American current and former Walgreens employees. The two cases were consolidated in April 2007. Following a fairness hearing, the court ruled that the consent decree was fair, reasonable, and adequate. The monetary award, approximately $24 million, will be shared by 10,000 African-American current and former store-level management employees across the country.

The decree also requires Walgreens to retain outside consultants to review and make recommendations regarding their employment practices, including standardized, nondiscriminatory promotion and store assignment standards and promotional benchmarks. Compliance with the decree will be monitored by the EEOC and an outside law firm. The court will retain jurisdiction over the case for five years. EEOC v. Walgreen Co., S.D. IL, 07-CV-172-GPM.

Dillard's to pay $500,000 to settle class sexual harassment suit

On April 1, the EEOC announced the settlement of its class sexual harassment suit against Dillard's department store chain for $500,000 and substantial remedial relief on behalf of 12 female former employees who were sexually harassed by an assistant store manager in two states.

In its suit, the EEOC maintained that an assistant store manager sexually harassed women in two Dillard's stores. The agency claimed that the company knew that the assistant store manager was sexually harassing young female subordinates at its Palmdale, California, store but failed to take appropriate action to stop the misconduct. Instead, according to the EEOC, it transferred him to a managerial position in its Westminster, Colorado, store and failed to notify the new store of the manager's history of sexual harassment.

Moreover, after a Colorado female associate complained to her store manager that the assistant store manager inappropriately touched her, the assistant store manager was given only a verbal warning regarding his conduct. Ten months later, when he physically and verbally sexually harassed an 18-year-old high-school senior, Dillard's finally fired him. The police were also contacted in that case.

In addition to paying $500,000 to the 12 women, the consent decree provides a court order prohibiting the company from discriminating or retaliating against employees or applicants based on sex. The company will provide significant sexual harassment training to employees and management officials, including training for managers on how to properly investigate sexual harassment allegations.

Dillard's further agreed that if it transfers an employee from one store to another after it receives a sexual harassment complaint about the employee, the new store will be advised of the complaint. It also agreed that unless its investigation of such a complaint demonstrates that it has "no merit," the alleged harasser will receive two hours of additional antiharassment training. During the decree's three-year term, Dillard's will provide reports to the EEOC about any sexual harassment complaints it receives. EEOC v. Joslin Dry Goods, d/b/a Dillard's, Civil Action No. 05-CV-00177-WDM-KLM, D.C.

Copyright 2008 M. Lee Smith Publishers LLC

MARYLAND EMPLOYMENT LAW LETTER is not intended to provide legal advice or opinions, but rather to provide information about current developments in Maryland employment law. Questions about individual problems should be addressed to legal counsel.