L.A. Weight Loss Settles Gender Discrimination Suit for $20M

December 8, 2008 (PLANSPONSOR.com) - The U.S. Equal Employment Opportunity Commission (EEOC) announced it has resolved its sex discrimination lawsuit against L.A. Weight Loss Centers, Inc. (renamed Pure Weight Loss, Inc. in early 2007) for $20 million.

According to the announcement, Pure Weight Loss discontinued its business operations in January 2008 and filed a voluntary petition under Chapter 7 of the United States Bankruptcy Code in U.S. Bankruptcy Court, so pursuant to the consent decree and as approved by the bankruptcy trustee, the EEOC will have a claim in bankruptcy court of $20 million. The settlement includes $16,842,656 in back pay and $3,157,344 in punitive damages payable to men whom the EEOC determined were subjected to hiring discrimination because of their sex during the period January 1, 1997, through the entry of the decree.

The 10-year consent decree applies to all Pure Weight Loss centers or to any successor resuming business operations, and in addition to monetary relief:

  • Prohibits Pure Weight Loss from discriminating against job applicants or employees because of sex and retaliating against any of its employees or applicants;
  • Requires Pure Weight Loss to use an electronic applicant tracking system for each person hired and for any person who submits an application, and to provide specific information on applicants by sex and other categories defined by the EEOC;
  • Mandates that Pure Weight Loss create a discrimination complaint procedure, post its commitment to equal opportunity and a diverse workforce, and report compliance to the EEOC; Requires hiring of rejected male applicants and includes numerical benchmarks for hiring and/or promoting men to the positions from which they had been previously excluded;
  • Requires Pure Weight Loss to conduct quarterly reviews to assess attainment of its hiring goals; and
  • At the EEOC’s option, requires Pure Weight Loss to employ an outside expert to examine the hiring process to assist in achieving any unmet hiring goals.

The EEOC lawsuit, filed in February 2002, alleged that the company engaged in a pattern or practice of disparate treatment against men in its recruiting, hiring, and assignment of employees. The EEOC also charged that L.A. Weight Loss disciplined and ultimately terminated employee Kathy Koch, a trainer with the company, in retaliation for attempting to hire male applicants and for her complaints that the company failed to hire qualified male applicants because of their gender (See L.A. Weight Loss Gender Discrimination Suit to go to Trial ).