Bad company policy proved to be costly

Having a bad company policy can be very costly. Here is an example that had Abercrombie & Fitch lose millions in court over seven years.



A bad company policy, which led to poor reasoning for making a hiring decision, just cost Abercrombie & Fitch seven years in court battling a lawsuit, and hundreds of thousands of dollars in punitive and compensatory damages.

In June 2008, 17-yr-old Samantha Elauf interviewed for a position at Abercrombie Kids in Tulsa, OK. Although she was nervous to do so, she wore her hijab (headscarf that she wears for religious reasons). In an interview with assistant manager, Heather Cooke, Elauf was told about the company’s “Look Policy” which entailed wearing little makeup, no headgear, and no black clothing or nail polish.

After the interview, Cooke consulted with her district manager and said she assumed that the applicant wore the headscarf for religious reasons, although nothing about Elauf’s hijab was ever specifically mentioned in the interview. The district manager said that, because of the company’s “Look Policy,” Elauf should not be hired. Elauf then filed a complaint with the EEOC.

During the litigation process, attorneys for Abercrombie & Fitch said that, had Elauf requested a religious accommodation, she would have been granted one – as the company had done so previously in several cases. But because Elauf had never brought it up, they pled ignorance to her religious practices for not having “actual knowledge” that her headscarf was religious. However, the Supreme Court disagreed. In an 8-to-1 decision, they reaffirmed that “[a]n employer may not make an applicant’s religious practice, confirmed or otherwise, a factor in employment decisions.”

With the Supreme Court’s decision, Gregory Lipper of Americans United for Separation of Church and State said, "The significance of today's ruling is that an employer cannot put its head in the sand when it has reason to believe that an applicant will need a religious accommodation… [It] can't reject the applicant and then plead ignorance."

Bottom line(s): If you have a bad company policy that could potentially create a disparate impact on an individual and/or group of people, you may want to revisit the reasons for having that company policy at all. And hiring decisions should never be made based on assumed characteristics, protected or not. Please contact us for more information.

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