(Bloomberg Law) -- 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 US 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 is working to eliminate decision-making factors that 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 pay practices that are changing discounted women’s prior experiences at the time they were hired and 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 company will work with class counsel to finalize the new pay and promotion factors to ensure they’re based on merit and avoid the adverse affects based on sex that spurred the suit, he 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 US Court of Appeals for the Second Circuit and two to the US 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. Seyfarth Shaw LLP and Weil, Gotshal & Manges LLP represent Sterling.

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

To contact the reporter on this story: Patrick Dorrian in Washington at pdorrian@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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