Dive Brief:

• American Freight Management Company agreed to pay $5 million to settle claims of nationwide sex discrimination brought by the U.S. Equal Employment Opportunity Commission, the agency announced Feb. 2.
• EEOC sued the company in 2019, claiming it violated federal nondiscrimination laws by refusing to hire female applicants. The company intentionally excluded qualified women from sales and warehouse jobs, EEOC claimed. Corporate managers allegedly told store managers to avoid hiring women because of their tendency to "complain and make trouble," according to the agency. 
• As a part of the settlement, American Freight must offer sales and warehouse jobs to those who were previously denied employment, EEOC said. American Freight did not respond to a request for comment by press time.

Dive Insight:

EEOC claimed American Freight's hiring practices violated Title VII of the Civil Rights Act of 1964, which prohibits employers from discriminating against job seekers and employees on the basis of their sex and a number of other characteristics such as race, national origin and religion.

The agency took issue with American Freight's practice of denying women certain roles because of their sex. It also faulted the employer for making derogatory comments toward female job seekers that were based in bias and sex stereotyping. For example, the agency alleged that managers commented that women couldn't "do as great a job at selling furniture as men," and that women shouldn't work in warehouses because "women can't lift." Managers also remarked that women would pose "a distraction" to male workers, EEOC said.

The three-year consent decree the company struck with EEOC requires the company to develop a plan to recruit women for sales and warehouse positions. It must also provide training on employment discrimination and retaliation to all company employees. 

It's not uncommon for Title VII claims to feature allegations of discriminatory comments from a worker's managers or co-workers. The severity and frequency of the comments generally play into how a court views them, and whether they evidence discrimination or a hostile work environment. A former UPS employee was unable to prove, for example, that her supervisor's isolated comments about her makeup constituted sex discrimination; the 5th U.S. Circuit Court of Appeals instead ruled that she was fired for poor job performance.

But allegations of discriminatory comments and language can lead to expensive outcomes for employers. Jackson National Life Insurance Company agreed to pay $20.5 million in 2020 to settle discrimination claims brought by EEOC. The claims included that Black employees at the company were referred to as "lazy," and that Black women were called "resident street walkers" by a high-level manager.