A Colorado car dealership has agreed to pay $1.5 million to settle a sex- and age-discrimination lawsuit. Arapahoe Motors, doing business as Ralph Schomp Automotive, will pay $1.505 million and “furnish other relief” to settle a suit against the company filed by the federal government on behalf of 10 former employees, the Equal Employment Opportunity Commission announced yesterday.
The 2009 lawsuit alleged that five women were subjected to offensive verbal comments and touching, job demotions, and salary cuts. Five older male employees also sued, saying they were fired because of their ages.
Ralph Schomp said in a written statement that it still denies all the allegations. In a statement, the dealership said the decision to settle is an effort to protect the company and employees from economic hardship, it also suggested that it would too expensive to fight the claims in court.
The “too expensive” argument is the old excuse used by businesses who know that they will probably lose at trial (meaning that the claims are not without merit) and wish to cut their losses – pay the damages a jury would probably award without the defense litigation costs. Since Colorado has a “loser pays” system for litigation costs, if a business really is convinced it has done no wrong, then why settle?
The five women represented by the EEOC were “subjected to sex discrimination and a sexually hostile work environment while employed by the car dealership,” the EEOC said in a news release. The EEOC also alleged that five “older” employees were fired because of their ages and replaced with younger, less-experienced workers.