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Furniture Giant Forks Over $5 Million Settling Hiring Discrimination Lawsuit

Home furniture retailer American Freight Management Company, LLC, is ponying up $5 million to settle a three-year-old case that found the company to be systematically discriminating against female job applicants.

The settlement will provide monetary relief and provide job opportunities to women previously denied them, among other relief, concluding a federal nationwide sex discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC).

The retailer, which does business as American Freight Furniture and Mattress, did not immediately respond to Sourcing Journal’s request for comment.

The EEOC alleged in its February 2019 lawsuit that since at least 2013, American Freight engaged in a nationwide pattern or practice of sex discrimination against qualified female job applicants for sales and warehouse jobs at the company’s more than 350 retail stores.

According to the complaint, a woman applied in 2013 to work for American Freight in Trussville, Ala. after several employees told her the store was hiring. When she tried to submit an application, the store manager reportedly said the location didn’t have any open positions and to come back closer to Thanksgiving. She did, but according to the federal agency, the manager cast her application aside and never got in touch.

The Trussville store ultimately hired five men—several of whom were either less qualified or just as qualified as the female applicant, the EEOC said. Court documents show the woman filed a charge of discrimination in January 2014, and the EEOC began investigating shortly thereafter. By November that year, the commission had expanded its investigation to include potential gender-based discrimination at American Freight stores nationwide.

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American Freight, headquartered in Delaware, Ohio, operates a nationwide discount furniture stores in 40 states and Puerto Rico. The business is operated by Franchise Group, the entity that acquired the retailer in February 2020.

The EEOC’s complaint also alleged managers made a number of comments that showed their hiring decisions were tainted with bias and sex stereotyping. For example, the suit alleged that some said women would not “do as great a job at selling furniture as men,” could not work in the warehouse because they “can’t lift,” and that the female employees would be “a distraction” to male employees. Some reportedly even went as far to say that women “complain and make trouble” or “b—h too much.”

Some of the company’s stores hired no women for sales or warehouse jobs during many of the years covered by the lawsuit, the agency claimed. Approximately 32 percent of sales workers hired at American Freight in 2013 were women, the EEOC said, while female salespeople make up 48.7 percent of the furniture industry’s headcount  nationwide. But by 2015, the company’s numbers plunged to just 14 percent, while the national rate lingered above 47 percent.

This alleged conduct violates Title VII of the Civil Rights Act of 1964, which prohibits discriminating against job applicants on the basis of sex.

The EEOC filed suit in U.S. District Court for the Northern District of Alabama, Southern Division, in Birmingham after first attempting to reach a voluntary pre-litigation settlement through its conciliation process.

The three-year consent decree settling the suit prohibits American Freight from discriminating against any job applicant on the basis of sex and from engaging in retaliation. In addition, American Freight will appoint a Title VII coordinator to implement the retailer’s equal employment opportunity policies and procedures and oversee the company’s compliance with the decree’s terms.

The decree also requires the company to develop a recruitment plan for women in sales and warehouse positions and provide training on employment discrimination and retaliation to all employees. The company will provide periodic reports to the EEOC about how many women apply and how many are hired into sales and warehouse positions.

“Eliminating barriers in recruitment and hiring is absolutely critical to our work to advance equal employment opportunity and to help provide access to good jobs for workers,” said EEOC chair Charlotte A. Burrows in a statement. “All workers have a right to earn a living free of discrimination, and sex discrimination has no place in hiring decisions.”

American Freight will also offer sales and warehouse jobs to qualified female applicants who were previously denied employment. As jobs become available, one in every five vacancies will be offered to eligible and interested women who are part of the settlement.

Marsha Rucker, regional attorney for the EEOC’s Birmingham District, said, “Refusing to hire women, either because of sex-based stereotypes or simply because they are female, is illegal. The EEOC will continue its efforts to eliminate discriminatory barriers for women, through litigation when necessary.”

“We are pleased American Freight worked with the EEOC to reach an early resolution of this case and craft a comprehensive settlement,” said Bradley Anderson, EEOC’s director for the Birmingham District, in a statement. “The consent decree will benefit applicants who were passed over because of their sex, and the terms in the decree will promote equal opportunity for future applicants.”

The EEOC’s Birmingham District Office is responsible for processing discrimination charges, administrative enforcement, and the conduct of agency litigation in Alabama, Mississippi (except 17 northern counties), and the Florida panhandle.

Discrimination, whether in the workplace or in hiring practices, continues to be an on-and-off issue at some retail circles. In December 2020, sportswear manufacturer BSN Sports LLC Indianapolis had to pay $600,000 in back pay and interest to more than 3,000 job applicants at its Indianapolis production facility as part an agreement with the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) to resolve alleged hiring discrimination.

And in 2021, an Amazon exec sued the e-commerce giant for alleged race and gender discrimination, sexual harassment and for allegedly violating the Equality Pay Act. Charlotte Newman, who is Black, alleged that she was offered the role of public policy manager, despite the fact that she had applied and was qualified for a higher-level senior manager position. The case is still ongoing. A separate set of suits took aim at ‘discriminatory’ hiring practices at both Amazon and Gap.

Aside from American Freight, Franchise Group operates a mix of franchised (or “franchisable,” according to the company) businesses under its operations, largely focused on home furnishings retail. Franchise Group’s other business lines include Pet Supplies Plus, The Vitamin Shoppe, Badcock Home Furniture and More and Buddy’s Home Furnishings. The company sold more than 55 Buddy’s “rent-to-own” stores to the revived Bebe Stores brand last year.

Additionally, Franchise Group beefed up American Freight’s presence in 2020 with the acquisition of national home appliance retailer Sears Outlet and regional furniture and mattresses retailer FFO Home. Both brands were rebranded under the American Freight banner after their acquisitions.