Trendy retailer Abercrombie & Fitch (NYSE:ANF) has been taking a beating from all sides lately. Its stock value has been declining steadily as sales and earnings have slipped, and its cultural cachet was dinged when the company’s CEO’s comments about “fat” people resurfaced, leading to complaints and attempts by one protestor to “rebrand” A&F by donating their clothes to the homeless.
The embattled company can now add legal woes to their troubles.
A federal judge ruled today that Abercrombie violated anti-discrimination laws by firing a Muslim worker who would not remove a hijab while working.
Hani Khan was fired from a San Mateo, Ca. Hollister store when she did not remove her head scarf. Abercrombie argued that she had violated their policy on employee dress, which was part of its marketing strategy, and that allowing an exception for Khan would have resulted in decreased sales.
The U.S. District Court in San Francisco disagreed, saying there was no “credible evidence” that the hijab cost the company sales, and that the company only provided “unsubstantiated opinion testimony of its own employees to support its claim of undue hardship.”
The lawsuit, which was filed on behalf of Khan by the U.S. Equal Employment Opportunity Commission, now moves to the liability phase. A jury can award punitive damages to Khan during this part of the trial.
Abercrombie previously settled a discrimination lawsuit with black, Latino and Asian employees and job applicants in 2004 for $40 million, agreeing to hire diversity recruiters, pursue minority hiring benchmarks, and include more minorities in its marketing materials.
Between this lawsuit, and the recent leak of Ambercrombie & Fitch’s employee hair style guide, maybe it’s time for the retailer to lighten up on its strict dress policy.
The opinions contained in this column are solely those of the writer.
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