Abercrombie and Fitch Firm’s Employee Privacy, Discrimination, Governance

Abercrombie and Fitch (A&F), a specialized “upscale men’s, women’s, and kid’s casual wear” retailing company. Even though the company has faced several lawsuits against its racial discriminatory hiring policies, they maintain that “At Abercrombie and Fitch we are committed to increasing and leveraging the diversity of our associates and management across the organization. We support those differences through a culture of inclusion, so that we understand our customers, enhance organizational effectiveness, capitalize on the talents of our workforce and represent the communities in which we do business.” (Diversity Mission Statement, A&F Annual Report) fashion conscious teenagers are A&F’s target market.

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The main strategy A&F uses to sell its products is through maintaining a young, hip image, often achieved through photographs of attractive men and women in advertisements and around their stores. Also, Abercrombie and Fitch aim to maintain a uniform appearance through out all of its stores, which they consider to be the “Classic American Look”.

A&F’s hiring policy has been the central focus of the case study “Is Hiring on the Basis of “Looks” Unfair or Discriminatory?” The company’s store managers often approach blond, attractive college students who visit their store with a position in the company’s sales team. Even when they hire from campus, the company hires good looking young people and A&F makes no effort to hide this fact.

The first question that arises from the case is if it is legal on A&F’s part to follow such a policy. Clearly A&F had discriminated against minority individuals, including Latinos, Asian Americans, and African Americans (hereinafter, collectively, “minorities”) on the basis of race, color, and/or national origin, with respect to hiring, firing, job assignment, compensation and other terms and conditions of employment by enforcing a nationwide corporate policy of preferring white employees for sales positions, desirable job assignments, and favorable work schedules in its stores throughout the United States.

A&F recruits, hires, and maintains a disproportionately white sales force (called Brand Representatives) who act as salespeople and recruiters of other potential Brand Representatives. A&F systematically refuses to hire qualified minority applicants as Brand Representatives to work on the sales floor and discourages applications from minority applicants. To the extent that it hires minorities, it channels them to stock room and overnight shift positions and away from visible sales positions, keeping them out of the public eye. In addition, A&F systematically fires qualified minority Brand Representatives in furtherance of its discriminatory policies or practices.

A&F implements its discriminatory employment policies and practices in part through a detailed and rigorous “Appearance Policy,” which requires that all Brand Representatives must exhibit the “A&F Look.”

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The “A&F Look” is a virtually all-white image that A&F uses not only to market its clothing, but also to implement its discriminatory employment policies or practices. Legally A&F violated Title VII by discriminating against minority individuals on the basis of national origin, color, race, and/or gender (i.e. minority women) in hiring, (Case No. 03-281781 Consent Decree) staffing, constructive discharge, failing to promote into managerial positions, steering, and discharge, on an individual basis and also on a nationwide class basis. Violation of the provisions of Title VII, which prohibits employment discrimination based on race, color, religion, sex and national origin, is illegal. Hence, A&F was engaging in discrimination in their hiring and human resource policies, which is illegal.

When the question of ethics arises we need to understand if A&F’s actions were a cause of unintentional bias or a case where they were trying to maximize their profit. In retail imaging a company is very important, if the target audience feels a company does not reflect cool it may be quickly dropped. A&F’s stock dropped when the clothing line was predominantly selling cargo pants which were no longer considered cool (Carter, 2000).

After restructuring its clothing line, A&F’s stock rose (Carter, 2000). In order to avoid repeating this event with every style change, A&F’s decisions of hiring and marketing are determined by the image the company maintains (Edwards, 2003). Abercrombie A&F seeks out “young, attractive, mainstream athletic types, and the cheerleaders who might be their girlfriends” (Edwards, 2003, p. 17). One source describes employees as “young, attractive, and overwhelmingly white” (Safer, 2003, p.1). “Abercrombie and Fitch want a sales force that reflects what’s up on its walls” (Safer, 2003, p. 2). Clearly A&F’s image has helped it gain profit for its shareholders but it engaged in discrimination and violation of human rights which is unethical. Bias towards a race, nationality, ethnicity or color is unethical (Banaji et al. 2003).

Ethical principles are the rules of conduct that are derived from ethical values, which are known as six pillars of character viz. trustworthiness, respect, responsibility, fairness, caring, and citizenship. Ethical values enhance one’s own judgment to take right and good decisions to benefit all sections of civic society. A&F’s “all-white” look is not for greater good and is a distinctively biased policy, and hence unethical.

According to A&F, the image of the brand is that of a “Classic American” look, which is also called as the “A&F look”. This stereotypical image is that of a young girl or boy who “is blond, blue-eyed and preppy” (Greenhouse 2003). Sales associates are required to wear the in season clothing while working in front of customers (Cannella, 2003). Employees have been threatened with being sent home if not wearing the proper clothing (Cannella, 2003).

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Corporate officials have been known to tell store managers that the sales associates must look like the people in the Abercrombie catalogs and in-store posters (Safer, 2003). This trend is definitely observable when one browses through A&F website. Even the page which demonstrates corporate culture shows a group of young men and women who are “all white” and essentially blond. Latino Americans, African Americans and Asian Americans do not fit the A&F look.

The exclusion or marginalization of racial minorities at A&F extended to the company’s branding and marketing materials as well. The company’s posters and quarterly magazine “overwhelmingly featured white models” (Greenhouse 2003) who “seemed to have stepped off the football field or out of fraternities or sororities.” (Greenhouse 2004) These were the people that A&F executives believed epitomized their “look.”

The “A&F look” prompts hiring people who fit that “look”. This is essentially young, white and blonde with blue eyes. Clearly they are discriminating against those people who do not have these physical attributes. The proliferation of discrimination lawsuits and the often inaccurate depiction of employment discrimination in popular culture have led many to believe that employers cannot base employment decisions on anything other than “legitimate business reasons.” The implication is that it is unlawful to “discriminate” against employees because of almost anything – including appearance, weight, taste in clothes and music, and sexual orientation.

In 2004, the company employed over 45,000 workers in 788 stores and earned over $2 billion in sales. (A&F Annual Report 2005) Its marketing materials reach millions of young people throughout the country. The Ohio-based company maintains “flagship” stores in midtown Manhattan and in a prominent Los Angeles shopping center. The company considers itself “an icon of casual American luxury.” For years, Abercrombie has tied its corporate image to Americana and linked its marketing campaigns to college fraternities and sororities.

The company’s force as a popular culture phenomenon is widely acknowledged. In July 2003, the nation’s leading civil rights law firms — the NAACP Legal Defense and Education Fund (LDF), the Mexican American Legal Defense and Education Fund (MALDEF), and the Asian Pacific American Legal Center — together with a private law firm, filed suit in federal district court accusing the clothing retailer of race discrimination in its employment practices.

The plaintiffs in the suit — black, Latino, and Asian employees, former employees, and applicants — claimed that they were denied sales floor jobs “because they did not project what the company called the ‘A&F look’.”(Greenhouse 2003) Though the company defined its “look” as “classic American,” the plaintiffs alleged that Stanford, was “urged” to apply for the overnight stocking crew. Others fared worse. An Asian-American sales clerk in Orange County, California, claimed that she and four other Asian- American clerks were fired after an Abercrombie executive visited the store and told the store’s managers that there were too many Asians.

The store replaced them with six white clerks. Similarly, five minority sales workers in another store were fired after a visit by a “corporate official.” Though the minority employees were told it was because the staff was too large, they were soon replaced by five white fraternity members from UCLA. What it really meant was “all-white.” According to the plaintiffs’ Complaint, the company enforced compliance with the “A&F look” by requiring store managers to submit pictures of their sales associates to the firm’s headquarters every quarter. Company officials then distributed pictures of “exemplary models,” nearly all of whom were white, to each of their stores.

The plaintiffs claimed that non-whites, if they were hired at all, were typically relegated to jobs that made them invisible to the public. One black plaintiff, a California college student who applied for a sales job, was hired instead to dust, clean windows, and vacuum.106 Another, a Latino college student enrolled at A&F was acting unethically when it was discriminating on grounds “looks” which again was associated with race, color, nationality and origin.

Discrimination of this mature was curbing the “universal” rights of individuals to be treated equally. The stakeholder theory is violated as A&F is undermining the society and its code of conducts. In November 2004, the company settled with the named plaintiffs, agreeing to increase diversity in hiring and promotions, alter its image by adding more minorities to its marketing materials, hire a Vice President for Diversity, and report benchmarks to an oversight entity. The settlement also provided for monetary compensation to the plaintiffs and their attorneys.

A similar case was that of employees of Mondrian Hotel of Los Angeles were fired in 1995 because they were “too ethnic”. The employees, each of whom had worked at the hotel for over seven years, filed suit alleging race discrimination. Initially, hotel management defended by saying that what he meant was that some of the employees had too many tattoos. Eventually, they settled, agreeing to pay the bellhops over $1 million. ( Jauregui 2005)

In Frank v. United Airlines, in which a class of female flight attendants challenged their employer’s weight-restriction standards that required female employees to maintain a weight corresponding to medium-build bodies, while holding male employees to a large-build weight standard. United Airlines argued that weight was a nondiscriminatory appearance standard. The Ninth Circuit disagreed.

Instead of couching its holding in the gender stereotyping language of Price Waterhouse, however, the court held that the application of a different weight standard to men and women was discriminatory because it imposed “unequal burdens on men and the policy could be justified only if the employer could demonstrate that the differential policy was a bona fide occupational qualification (BFOQ). Under the holding in Frank, any weight standard’s differentiation between the sexes must be reasonably necessary to the normal operation of the business and must concern job related skills and aptitudes. Because the airline did not demonstrate that the weight standard was a BFOQ, the female flight attendants proved that the airline had violated Title VII.

In case of Darlene Jespersen v. Harrah, The Jespersen panel majority’s acceptance that Price Waterhouse should bar coworker harassment, while refusing to apply the decision to prevent termination based on a sexist dress code, suggested a peculiar gulf in understanding.

The panel seemed to recognize that it is wrong to subject an employee to obnoxious harassment based on the employee’s gender-variant deportment, but rejected the idea that it is similarly wrong to enforce gender conformity with rigidly stereotypical personal grooming rules. This ruling confirms that the jury in the A&F case will penalize A&F for its discriminatory practices, but the jury will probably will not ask the company to stop its portrayal of “all-white” American image as it fell in the category of employee grooming and corporate image.

The court went on to note that When the workplace also functions as a cultural or social force, or when a corporation exerts measurable social power, the implications of workplace hierarchy and exclusion can take on greater meaning. Because law and culture are “reciprocally constituting and mutually supporting,” a corporation’s social power may be strong enough to influence mainstream political and social thinking. “Socially significant” workplaces are workplaces that exert measurable social or cultural power. Because of that power, discrimination in these workplaces can be more problematic than in a standard workplace. In these settings, a discriminatory message reaches a broader audience and is legitimated by the power and prestige of its sender.

A&F’s target customers are teenagers and youths. They are into upscale apparel retail. Even then they are portraying an “all-white” image which is unlike the true American society. Unwittingly they are foregoing a good ratio of their desired target who could be Hispanics or African-American consumers. This practice of the company has attracted a lot of negative publicity. Clearly employing a more diversified corporate image, still retaining its youthful and hip image could make the brand even more popular as well as socially responsible.

Reference:

Petition of Darlene Jespersen for Rehearing and Rehearing En Banc at 9–12, Jespersen v. Harrah’s Operating Co., 444 F.3d 1104 (9th Cir. 2006) (No. 03-15045). Web.

Eddie A. Jauregui, (2005) “The Citizenship Harms of Workplace Discrimination”, COLUM. J.L. & SOC. PROBS.

Greenhouse, S, (2003) “Clothing Chain Accused of Discrimination,” New York Times, at A21.

Greenhouse, S. (2003), “Going for the Look, but Risking Discrimination”, New York Times at A21.

Greenhouse, S, (2004) “Abercrombie & Fitch Bias Case Is Settled,” New York Times, , at A16.

Banaji, M.R., Bazerman, M.H. and Chug, D. (2003), “How (Un) Ethical are You?” Harvard Business Review, pp.2-13.

EEOC v. Abercrombie and Fitch Case No. 03-281781 Consent Decree.

Carter, A. (2000). “Abercrombie: Is it the right fit?” Money, pp. 29-30.

Edwards, J. (2003). “Saving face.” Brandweek, 44, pp. 16-20.

Safer, M. (2003). “The Look of Abercrombie and Fitch.” 60 Minutes. CBS. Web.

Cannella, C. (2003). “Sued over the dress code.” Inc., 25, 22.

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