Abercrombie Settles Employee Apparel Lawsuit for $25M
Abercrombie & Fitch has agreed to pay $25 million to settle claims by workers that the New Albany, Ohio-based retailer forced them to buy its clothing to wear to work and didn’t reimburse them. The settlement covers about a quarter-million current and former Abercrombie and Hollister hourly workers in California, Florida, New York and Massachusetts, according to a filing in California on Friday. The class-action suits date back to 2013, and the allegations date back to 2009, according to Abercrombie officials.
Total Retail's Take: This seems to be a case of Abercrombie finally relenting and paying the settlement in order for this problem to go away. The retailer argues that it "had, and continues to have, clear written policies and associate handbooks in place that stated its employees were not required to purchase or to wear company merchandise, nor were they obligated to make use of their employee discounts." Nonetheless, it has come to the conclusion that $25 million is a price that it's willing to pay to put this issue behind it, and is in the best interest of shareholders and employees. Unfortunately for enterprise businesses like Abercrombie & Fitch, class-action suits such as this are a cost of doing business.