Best Buy Could Pay Up to $10.2M to Settle Lawsuit

The retail giant has agreed to change its personnel policies and procedures, pay the plaintiffs $200,000, and cover attorney costs and fees of up to about $10 million to settle a discrimination lawsuit that was filed in 2005.

Richfield-based Best Buy Company, Inc., on Friday filed a proposed settlement in a class-action discrimination lawsuit under which it will pay up to $10.2 million, according to court documents.

The lawsuit was filed in 2005 in the Northern District of California by eight current and former employees of Best Buy and one person who applied for a job with the company. The nine plaintiffs alleged that Best Buy discriminates against women, African American, and Latino employees by denying them promotions and more lucrative sales positions.

The proposed settlement-which remains subject to court approval-was filed in U.S. District Court and stipulates that the nine plaintiffs will split $200,000 and that Best Buy will pay up to about $10 million in attorneys' fees and related costs. The proposed settlement would cover the plaintiffs' $2 million in expenses and less than half of their attorneys' fees, which total about $16.2 million.

Best Buy said that it has also agreed to change its personnel policies and procedures in order to “enhance the equal employment opportunities of the thousands of women, African Americans, and Latinos employed by Best Buy nationwide,” the company said in a statement.

Court documents indicate that those changes include electronically posting for all store employees open senior, supervisor, and exempt manager positions at least five days before the positions are filled and implementing processes to increase the pool of African American, Latino, and female employees qualified for promotion to management at all retail stores.

According to the proposed settlement, the company will also appoint an officer who will oversee Best Buy's policies and practices to ensure compliance with the changes it has agreed to make.

Best Buy did not admit to any wrongdoing in connection with the proposed settlement.

“In reaching this proposed settlement, the parties agreed that it was in the interest of Best Buy, the plaintiffs, and the employee classes to resolve the matter through a settlement that provides injunctive relief to all class members, rather than to proceed with litigation,” the company said in a statement.

A hearing has been scheduled for October 12. A judge will decide at that time whether to approve the settlement-including the specific amount that Best Buy will pay in attorneys' fees and costs.

Best Buy is Minnesota's third-largest public company based on revenue, which totaled $49.7 billion for the fiscal year that ended in February 2010. The company reported $50.3 billion in revenue for its most recently completed fiscal year.