Macy's To Pay $650K To Settle Racial Profiling Allegations

(RTTNews) - Department store chain Macy's Inc. (M) has agreed to pay a fine of $650,000 in a settlement with the New York State Office of the Attorney General on allegations by minority customers of racial profiling at the company's stores in New York.

Attorney General Eric Schneiderman noted that the agreement with Macy's addresses more than a dozen recent complaints of profiling and false detentions at Macy's flagship store in Manhattan's Herald Square. He also said that the agreement will help ensure that all customers, regardless of their race or ethnicity, are treated equally at the retail giant's 42 New York State stores.

Schneiderman said, "It is absolutely unacceptable -- and it's illegal -- for anyone in New York to be treated like a criminal simply because of the color of their skin. Recent allegations of racial profiling at some of New York's most famous stores stand as a stark reminder that the protections afforded by the Civil Rights Act of 1964 are still needed today - and that equal justice under law remains an American ideal we are striving to attain."

Under the terms of the deal reached with Schneiderman, Macy's is required to designate an independent expert on anti-discrimination laws and prevention of racial profiling, who will report to the Attorney General's Office on compliance by Macy's with the agreement for three years.

Macy's will also employ an internal full-time security monitor who will report to an executive outside of the company's loss prevention department and monitor the retailer's loss prevention policies as well as practices. The security monitor will be responsible for ensuring Macy's compliance with the terms of the settlement.

In addition, Macy's will be required to establish new record-keeping requirements on apprehensions, non-productive detentions, and customer interactions conducted by its loss prevention employees throughout all New York stores.

The company must also adopt new policies regarding anti-profiling, loss prevention detention, and access to Macy's closed-circuit television rooms by external law enforcement officers; and train employees on topics such as anti-profiling, proper loss prevention investigatory and interview tactics.

The Attorney General's Civil Rights Bureau opened an investigation into Macy's in February 2013 after it received complaints from close to two dozen African-American, Latino and other customers of ethnic minority groups who claimed that they had been apprehended and detained at Macy's, despite not having stolen or having attempted to steal any Macy's merchandise.

The consumers alleged they were racially profiled and that loss prevention employees at the store, located at 151 West 34th Street, wrongly detained and falsely accused minorities at far greater rates than white customers of committing crimes. They also alleged that Macy's was engaging in improper apprehensions and detentions.

Further, the complaints alleged that customers with limited English proficiency suspected of shoplifting or credit card fraud were not permitted to make phone calls, were denied access to an interpreter, and were required to sign trespass notices even though they could not understand the notices in English.

In January 2005, Macy's had entered into a consent decree with the Attorney General's Office to resolve allegations that its asset protection policies and practices, including its handcuffing policies, violated various anti-discrimination laws. The terms of that agreement ended in 2008.

The Attorney General's Office noted Wednesday that despite improvements in some areas and the continuation of certain consent decree reforms, its investigation found that Macy's continued to stop and detain a higher percentage of its minority shoppers than non-minority shoppers.

As a result of the current investigation, the Attorney General concluded that Macy's failed to take appropriate steps to adequately and quickly address profiling issues at its New York stores, and that the company also failed to provide sufficient guidance or training to its loss prevention employees on when to make proper detentions.

In a statement, Macy's said that the company's policies strictly prohibit any form of discrimination or racial profiling, and any occurrence of such behavior will not be tolerated in its organization.

Macy's said, "Moving forward, our company will be initiating a series of measures including enhanced training and education for our loss prevention and sales associates. We also will be adopting an expanded role for our security monitor to help ensure that we have the right policies and procedures in place, and that we are constantly reviewing our compliance with them."

M is currently trading at $58.98, up $0.03 or 0.05 percent on a volume of 499,868 shares.