Fry's Electronics Inc. will pay $2.3 million to settle a lawsuit from the federal government alleging that the retailer retaliated against a supervisor who reported a sexual harassment claim.
Ka Lam, a supervisor at the chain's store in Renton, Wash., was fired after alerting supervisors to inappropriate behavior toward one of his young employees, according to the U.S. Equal Employment Opportunity Commission.
America Rios, then a 20-year-old sales associate, told Lam that an assistant store manager was frequently sending her sexually charged text messages propositioning her and commenting on her body while inviting her to his house to drink, according to a lawsuit the EEOC filed against Fry's.
The conduct, which began in 2007, left Rios feeling "overwhelmed, uncomfortable, stressed out," she told the EEOC.
After speaking up on Rios' behalf, Lam was let go from the company. He was told that his termination was due to a decline in performance, though he was often lauded for his work, according to the EEOC.
Lam was not given his job back and is now working in California, EEOC attorney William R. Tamayo said. Fry's did not remove the accused assistant store manager from his post "as far as we know," Tamayo said.
The EEOC said it initially tried to reach a voluntary settlement with Fry's but was rebuffed. Eventually, the commission filed suit in federal court in Washington state.
The EEOC said Thursday that Fry's filed a three-year consent decree in which it promised to take more measures to prevent harassment or retaliation. Lam and Rios will split most of the $2.3-million settlement.
The amount also includes a $100,000 penalty stemming from Fry's handling of the case, which the EEOC said involved "destroying relevant evidence, wrongfully withholding evidence and filing frivolous motions."
Fry's said in a statement that it disputes the EEOC's allegations but decided to settle "to avoid additional litigation costs and to bring finality to this matter." As a condition of the settlement, the company said all parties agreed that "there is no finding that Fry's engaged in discrimination, harassment or retaliation."
"Fry's is and always has been committed to providing a workplace free from discrimination, harassment and retaliation," the company said. "Whenever such issues are raised, Fry's thoroughly investigates the matter and takes appropriate corrective action if any misconduct has occurred."
The San Jose company employs more than 14,000 people in several dozen stores across the country.