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AIG and Walmart Settle Major Discrimination Suits

Walmart and two subsidiaries of American International Group Incorporated (AIG) settled two major discrimination lawsuits this week. The Walmart suit was based on allegations of sex discrimination and the AIG suit was based on evidence of race discrimination. The suit against Walmart was based on sex discrimination at its London, Kentucky, distribution center. According to Kansas City Infozine, the center had regularly been hiring males between ages 18 and 25 between 1998 and 2005, while refusing applications of females who were equally or more qualified. Walmart initially denied the charges, which were first made in 2001. The settlement in the case totals $11.7 million and was approved Monday by US District Judge Karen Caldwell. Out of the total judgement, the EEOC will determine which claimants will receive portions of $8.4 million in back pay and which claimants will receive $3.2 million in compensatory damages, reported the Associated Press. The second major suit settled this week involved two AIG subsidiaries, AIG Federal Savings Bank and Wilmington Finance Inc., a mortgage-lending affiliate, agreed Tuesday to pay a minimum of $6.1 million to settle race discrimination allegations, according to the Dow Jones Newswires. The Justice Department told Reuters that between July 2003 and May 2006, an oversight on the part of the subsidiaries resulted in “wholesale mortgage brokers [charging] higher direct broker fees to African-American borrowers than to white borrowers for loans.” The department estimates approximately 2,500 African-American borrowers across 19 markets are eligible for compensation. Each victim will receive around $2,300 from the judgment and the company will spend an additional $1 million for consumer financial education efforts. AIG received $182.3 billion in government bailouts during the 2008 financial crisis, according to Reuters. U.S. Assistant Attorney General Thomas E. Perez told Dow Jones Newswires, “This head-in-the-sand approach will no longer be tolerated. The days of the Wild Wild West, of no federal oversight over the mortgage-lending industry, are over.”

Sources:

Kansas City infoZine 3/3/10; Associated Press 3/2/10; Dow Jones Newswires 3/4/10; Reuters 3/4/10