Walgreens to settle lawsuit on racial bias - $20 million to be paid to black personnel

Walgreens to settle lawsuit on racial bias - $20 million to be paid to black personnel
By Barbara Rose
Copyright © 2007, Chicago Tribune
Published July 13, 2007

Walgreen Co. has agreed to pay $20 million to as many as 10,000 African-American store managers and others to settle a federal civil-rights lawsuit charging they were denied promotions based on race.

The agreement, filed Thursday in U.S. District Court in East St. Louis, brings to a close a class-action suit by the U.S. Equal Employment Opportunity Commission, which charged that the nation's biggest drugstore chain discriminated against black managers, pharmacists and others by assigning them to poorer-performing stores in neighborhoods where they had fewer opportunities to advance.

The Deerfield-based company admitted no wrongdoing.

"As a company with zero tolerance for discrimination against any employee, we were disappointed by this lawsuit and are glad to have it behind us," a spokeswoman said in an e-mail. "From the beginning we have denied all allegations. We are a drugstore industry leader in the employment and promotion of African-American managers and pharmacists."

The proposed settlement, which must be approved by the court, prohibits store assignments based on race and calls for Walgreens to be monitored for at least four years.

Jean Kamp, associate regional attorney in the EEOC's Chicago district office, said the monetary award is lower than in some other discrimination cases against big firms because "these are not people who were denied jobs, they were managers who were promoted more slowly than their white peers."

"We feel that it's a fair settlement," she said. Negotiations began soon after the suit was filed March 7.

The impetus for the EEOC's action was a private suit filed in June 2005 alleging similar claims on behalf of 14 Walgreens employees. The EEOC suit and the private suit were later consolidated.

Walgreens Chief Executive Jeffrey Rein said in a statement Thursday, "We are pleased to reach a resolution that is consistent with our past and future diversity and equal-opportunity objectives."

More than 17 percent of its store and district managers are African-American, compared with an industry average of 9 percent, Walgreens said. Fifteen percent of Walgreens staff pharmacists are African-American, compared with the industry average of 10 percent.

Johnny Tucker, a 21-year employee who manages a store in Independence, Mo., said he is happy about the settlement although disappointed that Walgreens does not acknowledge the discrimination that he said he faced.

"I really have some great hope that Walgreen will uphold their commitment for fair and equal treatment," he said. "It's really going to provide a future of opportunities for the many talented African-American employees in the company."

His lawyer, Tiffany Klosener of Kansas City, Mo., whose firm brought the private suit, said the settlement is "not a band-aid."

"It will mean sweeping changes," she said. "I think it will transform the company so that decisions will be based on qualifications and not on skin color."

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berose@tribune.com