Walgreens Settles Nationwide Discrimination Suit

A federal judge in Illinois has approved a $24 million settlement over claims that Walgreens discriminated against thousands of African American employees nationwide. The lawsuit was filed by the U.S. Equal Employment Opportunity Commission (EEOC) and ends with one of the largest monetary settlements ever obtained by the agency in a race discrimination case.

In March 2007, the EEOC filed suit alleging that the drugstore chain discriminated against African-American retail management and pharmacy employees in promotion, compensation and assignment.

In the suits, current and former black employees claimed that they were paid less than similarly situated white counterparts and that black applicants for management trainee positions were rejected because of their race. They also said that the company steered black managers to poor performing stores and denied them promotions.

The settlement resolves the EEOC's litigation as well as a private class action suit filed in June 2005 on behalf of 14 African-American current and former Walgreens' employees. The two cases were consolidated in April 2007.

The company does not admit to any wrongdoing in the settlement. Michael Polzin, a spokesman for Walgreen Co., stressed that the company has denied the suits' allegations "from the beginning."

"We don't tolerate discrimination," he said, adding Walgreens is a "drugstore industry leader in the employment and promotion of African-American managers and pharmacists" and the nation's best represented retailer in under-served urban areas.

The $24 million settlement will be shared by approximately 10,000 African-American current and former store-level management employees across the country. The 14 named plaintiffs in the case get more than $300,000 each, and the lawyers who represented them will receive about $5.5 million.

Walgreen Co. also signed a consent decree stating that it will not discriminate against employees based on race and will not retaliate against anyone reporting discrimination. The agreement also requires the company to hire outside consultants to review its employment and promotions practices.

The company also agreed to examine compensation for disparities between similarly situated African-American and white employees, set up a procedure for employees to report race discrimination and provide non-discrimination training.

COUNSEL TO MANAGEMENT:

Employers should continually monitor their EEO practices and procedures to ensure fair and non-discriminatory opportunities in hiring and promotions. It is not enough to simply implement an EEO policy in a handbook or to state that the Company is an "equal opportunity employer." Employers must be sure to monitor their demographics, as race, age, or gender disparity between classifications or in management can raise a red flag of discrimination. Internal monitoring and vigilance is essential to ensuring that policies and practices are fair and equitable in practice, as well as on paper.

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