The $8 million settlement that Circle K Stores Inc. struck this week with the Equal Employment Opportunity Commission is not just about money, legal experts said.
The EEOC settlement was a "pre-litigation" agreement and intended to resolve "disability, pregnancy and retaliation discrimination charges," and in doing so avoids the risk of a government lawsuit. The $8 million includes a fund to "compensate aggrieved individuals" who worked at Circle K from 2009 through September this year.
The agreement doesn't spell out details of the types of incidents that led to the EEOC's action. But generally, with respect to pregnancy, for instance, the EEOC stated, "discrimination occurs when an employer refuses to hire, fires or takes any other adverse action against a woman because she is pregnant, without regard to her ability to perform the duties of the job."
"When employers have rigid maximum leave policies with no flexibility to give additional leave for a disability or pregnancy-related reason, they are in serious danger of running afoul of the law," said Mary Jo O'Neill, regional attorney for the EEOC's Phoenix District Office, in a statement.
Circle K is a large retailer with thousands of stores in the U.S. and corporate offices in Tempe, Arizona. Part of Alimentation Couche-Tard Inc., which is based in Laval, Quebec, it operates about 14,300 stores and employs about 122,000 globally.
Apart from the $8 million fund, the EEOC settlement includes some conditions, such as appointing a coordinator to oversee pregnancy-related disability policies. It requires the firm to conduct climate surveys and exit interviews, which legal experts see as a way to assess how well the company is meeting its obligations to improve its management.
Bryan HawkinsLabor and employment attorney, Stoel Rives LLP
The agreement seeks "to change the culture" at Circle K, said Bryan Hawkins, a labor and employment attorney at Stoel Rives LLP in Sacramento, Calif.
The EEOC settlement indicates that it "found some deeply embedded flaws" in how the firm handled disability situations, Hawkins said.
Circle K says it has changed
In a statement that was part of the EEOC's settlement announcement, Mark Novak, vice president of human resources at Circle K, said the investigation "stemmed from discrimination charges filed between 2010 and 2015. Circle K expanded our operations and integrated thousands of stores and tens of thousands of employees during this period."
"Throughout the past decade, we have made a focused effort on centralizing and strengthening our ADA compliance efforts," Novak said.
Circle K also agreed to conduct anti-discrimination training for all employees, including management. Performance evaluation of managers will also include consideration of compliance with applicable laws. This settlement is in effect for four years, according to the EEOC.
What the EEOC settlement is trying to do is "use these requirements to limit claims of disability, including pregnancy discrimination, retaliation and related acts," said Stephen Paskoff, a former EEOC investigator who is now CEO of Employment Learning Innovations Inc., in Atlanta, which advises and trains organizations on equal employment issues.
To change its culture, Paskoff said Circle K would have to change the training so employees feel comfortable enough to speak up when they have an issue.
Andrea Johnson, an employment attorney at Kane Russell Coleman Logan in Houston, said the EEOC saw "the need for a significant change, a top-down change." But she also credits Circle K for sending "a great message to their employees [that,] 'We're going to be a better company at the end of this process.'"
Patrick Thibodeau covers HCM and ERP technologies for TechTarget Editorial. He's worked for more than two decades as an enterprise IT reporter.