Walgreen pays $20 million to settle discrimination claims with EEOC

The EEOC and Walgreen Co. resolved a race-discrimination lawsuit this week with a $20 million proposed consent decree. The suit had alleged widespread bias against African-American workers by assigning them to low-performing Walgreens drugstores and stores in communities with large African-American populations.

The suit, which also claimed African-Americans were denied promotional opportunities based on race, sought back pay and compensatory and punitive damages.

Commentary: In Walgreen’s defense, having so many locations (doesn’t is seem like there is one on every corner?) and operating in diverse neighborhoods makes the company a likely target for these kind of actions.

For example, just a few weeks ago, another lawsuit alleging racial discrimination by the company against black customers was dismissed. That trial had originally stemmed from November 2005 lawsuit alleging that the company had fostered “a hostile environment” for black customers (for example, by having them followed while they shopped to make sure that they weren’t shoplifting) and employees.

We highly doubt that this settlement is a sign of a significant discrimination problem within the company, but we are too distant to comment on the merits of the cases of the individual plaintiffs. To Walgreen’s credit, the company was wise to point out when announcing the settlement that it was not an acknowledgment of guilt, but rather an attempt to simply move beyond the case. In fact, in the announcement, a company spokesman pointed out that African-Americans represent 17 percent of the company’s store managers and district managers – which, according to the statement, is significantly higher than the industry average.


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