Even though hundreds of employees at Signet Jewelers — the jewelry giant that owns the Zales, Jared, and Kay retail brands — have alleged they were victims of sexual harassment and discrimination for years, these claims were only recently brought to light. Now, some Signet shareholders are suing the company, saying it hid these allegations from them.
In a federal class action [PDF] filed last week against Signet, its CEO Mark S. Light, and former CEO Michael Barnes, the lead plaintiff accuses the company of failing to disclose a complaint female employees first filed in 2008. That complaint alleged that executives at Signet subsidiary Sterling Jewelry have created a corporate environment where women were groped, demeaned, and urged to engage in sexual acts in order to receive promotions and preferred job placements.
The case went to arbitration and the plaintiffs filed for class certification in June 2013. But while the arbitrator and defense were provided with copies of more more then 250 declarations that “include strikingly similar allegations of sexual harassment, including sexual assault,” the new complaint states, they were not made available to the public until Feb. 26, 2017, the day before The Washington Post reported on the topic.
The plaintiff claims Signet’s public statements left out the fact that hundreds of employees were accusing executives of presiding “over a corporate culture that fostered rampant sexual harassment and discrimination.”
Signet would probably have had a hard time avoiding paying a hefty sum in connection with the class action lawsuit, the complaint points out, therefore any statements the company made about how well its business was doing were “materially false and misleading and/or lacked a reasonable basis at all relevant times,” the complaint claims.
In the wake of the controversy, shares of Signet have dropped almost 13%, the shareholders say in the lawsuit, “damaging investors.”
“As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages,” the complaint states.
The lawsuit seeks class action status, damages, and a jury trial.
Signet Vice President David Bouffard told Courthouse News in a statement that both lawsuits are without merit and the company is prepared to defend itself. He says Signet has “fully met its disclosure requirements” since the arbitration case was filed in 2008.
He says that after “thoroughly investigating” the allegations of pay and promotion discrimination, the company has concluded they aren’t substantiated by facts and that they don’t reflect the company’s culture.
“Contrary to the shareholder suits and earlier media coverage, the arbitration case is focused on the company’s pay and promotions practices for women in certain positions within our field operations team, not sexual harassment,” Bouffard says in the statement. “In fact, there are no legal claims on behalf of the class alleging sexual harassment. Any references to such allegations to support claims of intentional discrimination in pay and promotions was rejected by the arbitrator several years ago.”