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2017-03-06 18:25:04
Hundreds Accuse Jewelry Firm of Discrimination and Sexual Misconduct

Sandra Sargent had finally had enough when a guard at Jared the Galleria of Jewelry in Crestview Hills, Ky., waved his security scanning wand over her buttocks one day in 2007. Several weeks earlier, she said, he had used the same device to brush across her chest. So she called an anonymous company hotline and reported his behavior.

It was an inauspicious career decision by Ms. Sargent, a manager at the store. The complaint made its way to a district manager who later told her she should “grow some thick skin” and that the guard was having “harmless fun,” according to a sworn written statement from Ms. Sargent. Soon after, she was fired.

Ms. Sargent is among the hundreds of former employees of Sterling Jewelers, the parent of Kay Jewelers, Jared and other jewelry retailers, whose statements about their experiences at the company were released on Feb. 26. The statements, most of them from women, are part of a class-action case that includes 69,000 current or former employees and accuses Sterling of pay discrimination against women.

The company has denied any wrongdoing. On the matter of pay and promotion discrimination, the accusations are “not substantiated by the facts,” Signet Jewelers Limited, the parent of Sterling, said in a statement. In addition, Sterling said that it found the claims of sexual misconduct to be without merit.

But lawyers and academics who specialize in gender discrimination say that the documents — more than 1,300 pages in total — provide a rare insight into how a company’s policies work in real life. Whether it is a not-so-confidential tip line or an in-house court, they say, some widely used corporate procedures can mask problems that women often face in the workplace. Here is a look at what the documents revealed.

Sterling’s hotline was a particular problem in the view of many of the women who made statements, with some expressing fear of retaliation should they use it. Employees who called the hotline, known as the TIPS line, were supposed to be able to report problems anonymously.

Many companies have hotlines that are effective and guarantee anonymity, and they can be “a sound H.R. tool” enabling complaints to circumvent the normal chain of command, said Joseph Sellers, one of the lawyers representing the Sterling women. “The question is, ‘What’s done with the information once it’s provided to the people inside?” he said.

Nancy Erika Smith, the lawyer who represented Gretchen Carlson, a television anchor, in her sexual harassment lawsuit against Roger Ailes, the Fox News founder, said making use of the hotline also introduces the risk that an employer can gather valuable information before an employee is represented by a lawyer.

“I have no recollection of any client having a good outcome from a hotline,” she said.

Jeanette Digennaro, who worked in several Sterling chains, said in the testimony that after she called the TIPS line to report sexually harassing comments, a human resources associate followed up to chastise her for making the call.

“I felt like a defendant in a crime being interrogated by H.R.,” Ms. Digennaro said. She was fired several weeks later.

David Bouffard, a spokesman for Signet, declined to respond to detailed questions about the company’s policies and the recently released statements.

Since 1998, all employees at Sterling have had to agree that they will never sue the company. Instead, Sterling has a three-step internal dispute system known as “Resolve” that can escalate to an arbitration hearing. The class-action case against the company is now in that arbitration process.

Outside of the securities industry, Sterling was early to adopt a no-suing a policy. Today, lured by the twin benefits of avoiding large jury awards and keeping ugly stories under wraps, companies are increasingly requiring arbitration. Alexander Colvin, a professor at Cornell’s School of International Relations, estimates that a quarter of employees in nonunion workplaces are subject to mandatory arbitration.

The upside to internal dispute systems is that “a lot of problems get solved,” said Lauren B. Edelman, a sociologist and the author of “Courts, Corporations, and Symbolic Civil Rights.”

But employees should exercise caution, Ms. Edelman said. If the disputes become legal claims, she said, the employee who used the in-house program can be at a disadvantage. “It’s often these offices that end up providing the defense for the organization,” she said.

Donald Davison, a former manager at Osterman Jewelers in Mentor, Ohio, said his daughter’s boss at a Kay store said to her, “If you don’t put out, you’ll be out,” according to his statement. Mr. Davison complained and his daughter was fired a week later, according to the documents. She filed a complaint with Resolve “which failed to remedy” her firing and harassment, he said.

Sterling has fought hard when employees have tried to bypass the Resolve rules and file claims in court. In 2004, a female employee said in a claim that she had witnessed the rape of her roommate by a Sterling manager at an annual resort outing sponsored by Sterling in 2003. Sterling fired the man, who ultimately pleaded no contest to sexual battery.

But the female employee, who went by Jane Doe in court papers, said the company “set out to investigate, intimidate and discredit” her and the assault victim after the company got notice that the victim might sue the firm. Sterling fired her in 2004, saying she had withheld information in its investigation of the rape case. She sued Sterling, accusing the company of wrongful termination, retaliation and invasion of privacy, in a suit that was separate from the class-action case.

In response, Sterling said in court papers that it had been reported to the company that the plaintiff had “engaged in lewd and lascivious behavior” at the outing, which itself was infamous for its debauchery.

Sterling persuaded a judge in Ohio that the case should be compelled to arbitration. It settled for undisclosed terms, according to the plaintiff’s lawyer.

In their affidavits, Sterling’s women described instances where people got promotions because they were friends with the boss, or even were sleeping with the boss, but never because they had seen a job posting they had decided to pursue. The lack of promotions, they argue, helped contribute to lower wages for women.

Sterling managed its promotions by a so-called tap on the shoulder policy in which managers picked the people they liked instead of publicly posting job openings.

Joan Williams, the founding director at the Center for WorkLife Law in San Francisco, said shoulder tapping has lost much of its popularity in corporate America because it is widely recognized as a recipe for lack of diversity.

In 2007, Sterling introduced a program known as the Career Advancement Register, or C.A.R., that allowed employees to register interest in jobs they might want. In a memo seeking legal certification for its class-action case, though, the women said C.A.R. wound up being a paperwork formality that did not change anything.

“I was unaware of anyone who was promoted after registering into C.A.R.,” Ms. Digennaro said in her sworn declaration.

In its statement, Sterling said that more than 68 percent of its store management staff members are female.

According to expert reports by the plaintiffs, though, while 73 percent of full-time store employees from 2004 to 2012 were women, they filled only 60.5 percent of store manager jobs and 56.9 percent of department manager jobs.

To get ahead, some women disclosed in their statements that they wound up sleeping with the boss.

One woman said in her statement that after she slept with her district manager, he told her “I am now your angel” at Sterling. “I have your back.”