EEOC: Fry’s Fined $2.3 Million For Sexual Harassment, Sexting Manager

Filed under: Labor,Legal,News,Sexual Harassment |

Ignoring sexual harassment and then retaliating against employees who report it can be very expensive. Just look at the example of retailer Fry’s Electronics.

In one of the largest fines in suit of this type, Fry’s Electronics has greed to pay $2.3 million to settle a sexual harassment and retaliation lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC). Fry’s has also agreed to implement preventative measures so that employees who are sexually harassed, and those who report it, don’t get fired.

Fry's Electronics shows what NOT to do in a sexual harassment case.The case involved the sexual harassment young female salesperson by an assistant store manager and the firing of her supervisor who reported the abuse.

An assistant store manager at the Renton, Wash., Fry’s Electronics harassed 20-year-old sales associate America Rios for several months. He was frequently sending her sexually charged text messages and inviting her to drink at his house.

Rios went to her direct supervisor, Ka Lam, to report sexual harassment.

Fry’s fired Lam after he reported the sexual harassment to the company’s legal department. Lam was told he was fired because of a decline in his performance despite the fact that his work was consistently commended.

Firing Lam turned out to be a big mistake. Sexual harassment and retaliation for complaining about it violate Title VII of Civil Rights Act of 1964.

attorney Scott Blankenship represented Lam and Rios in the sexual harassment case.

Attorney Scott Blankenship

Sexual Harassment and Retaliation

After attempting to reach a voluntary settlement, the EEOC filed suit (EEOC v. Fry’s Electronics, Inc., 2:10-CV-1562-RSL) in U.S. District Court for the District of Washington. Scott Blankenship and Rick Goldsworthy of the Blankenship Law Firm in Seattle represented Rios and Lam in the case.

“This seven-figure settlement, among the highest EEOC settlements ever on a per-claimant basis, follows court-ordered sanctions including a penalty of $100,000 due to Fry’s abusive discovery tactics which included destroying relevant evidence, wrongfully withholding evidence, and filing frivolous motions,” said EEOC General Counsel P. David Lopez.

“Mr. Lam did the right thing when he raised a complaint on behalf of his subordinate who was being harassed,” said EEOC Regional Attorney William Tamayo. “To be fired for following Fry’s policies was a complete injustice. The EEOC stands ready to help protect the rights of workers who are fired when they try to assert their own rights, or those of their coworkers.”

Lam said he had no alternative but to stand up and report the harassment even if the whistleblowing could impact his job.

“I feared retaliation from the local managers, but everything in me said that I could not live with myself if I did not speak up,” Lam said in press release announcing the settlement. “Whatever the consequences, it had to stop. I had to report it.”

Once Lam’s complaints reached Fry’s upper management, the company assigned the Renton store’s manager, a close personal friend of the alleged harasser, to investigate.

The store manager ultimately conducted an intentionally biased and inadequate sexual harassment investigation, accosting to the law firm who represented the individual plaintiffs. Fry’s also reported failed to follow its own procedures and did not take written statements from either Lam or Rios.

The EEOC has jurisdiction over sexual harassment cases.

Although many of the allegations involved sexually offensive text messages sent by the assistant store manager, no effort was made to preserve them as evidence
Within two weeks of Lam’s complaints, Fry’s falsely accused him of baseless misconduct without proof and fired him.

“I felt very sad, alone and frightened when Ka lost his job for standing up for me and complaining to corporate headquarters. I knew then that there was no one I could trust,” Rios said.

Fry’s fired Rios (also a top sales performer with a history of promotions) within weeks of her responding to a legal claim filed by Lam with the EEOC. Additionally, Fry’s allowed the assistant store manager accused of harassment to sign the termination paperwork for Rios.

“When employees like Mr. Lam and Ms. Rios selflessly stand against discrimination and harassment in the workplace, they deserve the protection provided by the law,” said Seattle attorney Scott Blankenship. “The laws of the United States and of Washington strictly prohibit retaliation, and protect employees who courageously oppose it. Unfortunately, Fry’s not only failed to protect Mr. Lam and Ms. Rios, Fry’s targeted them with swift retaliation.”

Under the terms of a three-year consent decree filed 30 August 2012 with Judge Robert Lasnik, Fry’s agreed to pay Lam and Rios.

Fry’s also agreed to prevent future harassment or retaliation. The agreement includes ongoing training for all employees and management, reporting any complaints and the company’s responses to the EEOC, and posting a notice for all its employees about the settlement as well as contact information for reporting harassment, discrimination or retaliation.

“This was my first job, and I just wanted the harassment to stop. It really meant a lot to have my supervisor speak out for me, and it was horrifying to see him lose his job over it,” Rios said. “I’m elated and relieved by the settlement, for Ka Lam’s sake as much as for mine.”

Fry’s also played legal dirty pool during the case and got slapped by federal judge in the process.

Judge Lasnik had previously sanctioned Fry’s, ordering it to pay a total of $100,000 after he concluded Fry’s had “deliberately engaged in deceptive [litigation] practices” that were “unfair, unwarranted, unprincipled, and unacceptable.”

The attorneys representing Lam and Rios requested sanctions against Fry’s after they learned that computer hard drives and other evidence directly related to their claims had been destroyed.

Later they also learned that Fry’s failed to disclose prior instances of sexual harassment at the Renton, Wash., Fry’s store. The prior instances uncovered included evidence that the alleged harasser, and the store’s manager that was allowed to investigate Rios’ sexual harassment claim, had been accused of sexually harassing other female employees.

This case is also somewhat unique because Fry’s attempted to have Rios, who joined the case later, excluded from the EEOC’s litigation because her claim wasn’t identical to that of Lam, who filed the original charge. Judge Lasnik rejected Fry’s argument, allowing the EEOC to litigate on behalf of both Lam and Rios.

According to the company’s website, Fry’s retail stores specializes in software, consumer electronics, computer hardware and appliances. The company employs more than 14,000 people in 34 stores located throughout the United States.

Additional information about the EEOC is available on its web site at

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