Sexual harassment is an issue that can severely affect the public image and the profitability of any company. One of the largest and most profitable jewelry firms in the U.S., Sterling Jewelry, recently learned this lesson in a dramatic and public way. The parent company of Kay Jewelers® and Jared® the Galleria of Jewelry is currently facing a private class-action case that alleges a general atmosphere of sexual discrimination and harassment endemic throughout the organization.

Thousands of Employees Affected

The arbitration initially filed in 2008 by a relatively small group of women. It now encompasses the claims of 69,000 women and men who have signed on to the arbitration case since that time. The statements provided by these individuals include some disturbing allegations:

• Members of management allegedly solicited sexual favors as a condition of receiving raises or promotions.
• Stores under the Sterling Jewelry umbrella were scouted by managers at the company to identify women employees considered attractive.
• Inappropriate comments were made about women’s bodies in the workplace.
• Women were routinely paid less than their male colleagues, and men were promoted in preference to more qualified and experienced women in the workplace.
• Blatant sexual overtures and physical contact with female managers occurred regularly at the Sterling Jewelry annual managers meeting. No spouses were invited to attend this event.
• One employee reported that when she attempted to report unwanted sexual advances to the company, she was falsely accused of theft and terminated from her position.

Sterling Jewelry has denied these charges, insisting that the company has measures in place to address any complaints of sexual discrimination or harassment and that these steps have been used effectively to deal with any allegations of misconduct.

An Atmosphere of Secrecy

The employment agreement signed by staff members at Sterling Jewelry precludes the settling of work-related disputes in public courts. These cases must commence at arbitration, which virtually guarantees that both the accusations and the outcomes will remain safely away from the public eye. The release of documents relating to the case was negotiated over more than a year between reporters at the Washington Post, attorneys representing the complainants in the case and the legal team at Sterling Jewelry. It is still not clear why the arbitration has taken so long to resolve.

Damage to Corporate Reputation

Regardless of the eventual outcome of the arbitration case, the release of the sworn statements of some former and current employees has likely done permanent damage to the Sterling Jewelry brand as well as to its subsidiary companies. Since many of the customers in the jewelry industry are women, the public airing of these accusations is likely to have a lasting negative effect on sales for the companies under the Sterling Jewelry umbrella.

If you have been the victim of unwanted sexual advances or sexual harassment in the workplace, the legal team at Risman & Risman can provide you with the help you need to pursue your case in court. We will work with you to determine the most effective strategies to protect your legal rights and hold companies accountable for their actions. Call us at 212-233-6400 to set up a free consultation. We’re here to help.

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