Sterling Jewelers Inc. agreed to pay $125 million to roughly 68,000 female retail sales workers who sued the company 14 years ago alleging sex bias in pay and promotions, according to a press statement and class counsel.

The deal still needs to be approved by the arbitrator overseeing the landmark class arbitration, attorney Joseph M. Sellers told Bloomberg Law Thursday. After that, the case will be sent back to the U.S. District Court for the Southern District of New York—where the women sued in 2008—and the class will ask the court to confirm the arbitrator’s award, Sellers said. He’s a partner in Cohen Milstein Sellers & Toll PLLC in Washington.

Sterling will also pay class counsel $50 million in attorneys’ fees and costs as part of the settlement, according to a joint statement issued by the company and Cohen Milstein Thursday.

Practices Changing

The settlement was partly spurred by changes the Signet Jewelers subsidiary had already begun to undertake to transform its pay and promotion practices, Sellers told Bloomberg Law.

The company has worked to eliminate decision-making factors that unintentionally caused the bias in an industry where a vast majority of the employees are women, he said.

“For the past four years, we’ve been successfully transforming Signet’s business model and culture,” Signet CEO Gina Drosos said in the statement announcing the settlement.

The company believes “prioritizing diversity, equity and inclusion grows high-functioning teams and fosters a culture of appreciation and development,” Drosos said. The settlement is a significant step toward “bringing closure to a nearly 15-year-old case,” she said.

The 2008 lawsuit alleged in part that Sterling’s facially neutral pay and promotion decision-making systems had a disparate impact on female employees that wasn’t consistent with business necessity, or that less discriminatory pay and promotion practices existed that the company failed to use.

The pay practices inadvertently discounted women’s prior experiences at the time they were hired and unintentionally caused their starting pay to be lower than it should have been, Sellers said.

They “started low and stayed low” because their pay wasn’t properly adjusted upward despite their success in selling Sterling’s merchandise, Sellers said.

The claimants will be reviewing Sterling’s practices going forward to ensure they continue to comply with federal law, he said.

“The case alleged gender discrimination involving legacy pay and promotions practices used by our Sterling division,” Sterling Jewelers told Bloomberg Law Friday in an email. “We discontinued the practices at issue in the lawsuit as part of our ongoing transformation of making diversity, equity and inclusion an integral part of our business strategy.”

“Today, Signet has a highly engaged team and is proud to be a Great Place to Work-Certified company, and for the last four consecutive years, listed on the Bloomberg Gender-Equality Index. The settlement represents an end to a difficult chapter and is a positive step, reflecting our commitment to our continuing transformation and purpose,” Sterling said.

‘Singular Importance’

Women continuing to receive unequal pay throughout their careers based on discrimination in the setting of their starting pay is a widespread problem that needed to be challenged, Sellers said.

The courage and commitment of the women who spearheaded the suit through four trips to the U.S. Court of Appeals for the Second Circuit and two to the U.S. Supreme Court is another reason why the case is of “singular importance,” he said.

Along the way, the case led to significant legal holdings on when class claims can be arbitrated and the information that must be provided to potential class members to notify them of their ability to participate in class arbitration proceedings, he said.

Sterling’s status as an industry leader is yet another reason why the settlement is so significant, Sellers said.

The industry has always “been accessible but not necessarily hospitable to women,” he said. The case and the settlement will have a ripple effect not just within the company but also likely throughout the industry, he said.

The changes Sterling has already made and will continue to make to its job practices show the company’s commitment to support women, Sellers said.

Burr & Smith LLP and Jenner & Block LLP also represent the class. Morgan, Lewis & Bockius LLP represents Sterling.

The case is Jock v. Sterling Jewelers Inc., S.D.N.Y., No. 1:08-cv-02875, settlement announced 6/9/22.