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Company Pays $45M to Settle Pay Discrimination Lawsuit

By George Khoury, Esq. on April 03, 2018 | Last updated on March 21, 2019

The Family Dollar store's name may elicit a mom and pop feel, but a recent class action settlement involving 37,000 female managers claiming to be paid less than their male counterparts easily shatters that image. Though the fact that there are 8,000 Family Dollar stores across the country helps too.

For the company, which was recently purchased by Dollar Tree, the settlement clearly reflects a desire to move forward. In addition to the $45 million settlement, the company agreed to an audit of their pay practices and policies. For companies that are sitting back and watching this unfold, it could be downright frightening to hear that the plaintiffs were seeking liability to extend all the way back to 2002.

Either Pay Equal or Pay Millions and Pay Equal

For employers, the lesson to learn from the Family Dollar class action is simple: pay women equally, or risk paying a whole lot more in addition to paying women equally. Even if you have "fair" pay policies, it doesn't hurt to make sure that the policies are actually being implemented and enforced properly.

Although the settlement admits no wrongdoing, $45 million and auditing practices and policies says it all. Additionally, the fact that close to 50 managers actually filed EEOC charges against the company adds merit in the public's eyes, regardless of a no-admission settlement.

Even though Family Dollar didn't endure a social media public relations nightmare, other companies have seen scathing public criticism for lesser trespasses. Surprisingly, even with all the publicity these types of cases get, the frequency of these types of claims, and worse, continues to increase. However, in today's zero tolerance culture promulgated thanks to the #MeToo and #TimesUp campaigns, we may soon see things change for the better.

One of the best ways for companies in the service sector to mitigate discrimination claims is through effective policies, training, as well as monitoring and enforcement of the policies. And while creating effective policies seems simple enough, companies that fail to train, monitor, and enforce their own policies are leaving themselves exposed to liability.

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