Sherwood has been ordered to make a payroll tax payment of more than $400,000 within the next thirty days by a federal agency, putting an end to the hold placed on the women's back pay.
CLEVELAND – The The Equal Employment Opportunity Commission (EEOC) announced today that a federal judge has entered an opinion and order finding that Sherwood Food Distributors, LLC, with its headquarters in Detroit, is in contempt of court for failing to pay its payroll tax liability in violation of the consent decree previously entered by the court to resolve the EEOC's class action suit alleging that the company engaged in sexual harassment and discrimination against its employees.
In a decision made on February 24, 2019, in response to an emergency motion for civil contempt sanctions filed by the Equal Employment Opportunity Commission (EEOC), Federal District Judge Donald C. Nugent found that Sherwood knowingly failed to comply with the court's order to pay its payroll tax liability. This delay in compliance with the decree's December 14, 2021 deadline to send back-pay checks to eligible claimants from a settlement fund of $3.6 million resulted in the judge's finding that Sherwood did so without a Sherwood's argument that it had been trying to negotiate with the EEOC for an extended schedule to pay its payroll tax in installments was shot down by the court, and the court found that Sherwood had not taken all reasonable steps to comply with the decree. The court found that Sherwood had not taken all reasonable steps to comply with the decree.
It is insufficient for the defendant to try to negotiate an extension just ten days before the deadline, even though the defendant has been aware of the deadline for more than three years, as the judge Nugent noted. "Given that the Plaintiff was unwilling to negotiate, it was incumbent upon the Defendant to comply with the Decree and the Administrator's request for payment."
As a result of Sherwood's violation of the consent decree, Judge Nugent deemed the company to be in contempt of court and ordered the company to pay the total amount of its payroll tax debt within the next 30 days. Sherwood is required to pay payroll taxes totaling $408,749.23, which includes an increase of $46,749.23 over the amount that the taxes would have been if the company had made the payment in 2021 when it was due. Sherwood's argument that it should not be required to pay the increase was shot down by Judge Nugent, who found that "but for the Defendant's own delay, the amount of taxes owed would not have increased." [Citation needed] Sherwood's argument that it should not be required to pay the increase was shot down by Judge Nugent.
In addition, the court ordered that in the event that Sherwood once again missed the deadline for making the payroll tax payment, the company will be required to pay for and submit to a financial examination conducted by an independent accountant chosen by the EEOC. In addition, the judge ordered that Sherwood is responsible for paying any additional costs that the administrator of the settlement fund incurred as a result of carrying out its responsibilities as outlined in the decree.
Since October 16, 2018, Sherwood has been required to abide by the terms of a consent decree that has a duration of five years. This decree was approved and entered by Judge Nugent. The agreement put an end to the EEOC's litigation that was pending in the United States District Court for the Northern District of Ohio (EEOC v. Sherwood Food Distributors, LLC, 1:16-cv-02386). The lawsuit, which was initially filed on September 27, 2016, alleged that Sherwood had discriminated against a class of female applicants at its warehouses in Cleveland and Detroit by refusing to hire them for entry-level positions because of their sex, which is a violation of Title VII of the Civil Rights Act of 1964. Additionally, the lawsuit alleged that Sherwood had discriminated against a class of female applicants at its warehouses in Cleveland and Detroit. Sherwood was required to make a payment of $3.6 million into a qualified settlement fund, which would then be distributed to eligible female applicants. The decree stipulated these terms. Within the timeframe specified by the decree, the EEOC was able to identify 373 claimants who were qualified to collect compensation from the fund.
"Consent decrees are a crucial aspect of EEOC's enforcement regime," said Debra Lawrence, a regional attorney for the Philadelphia District Office. Employers should take note that we will not hesitate to move for contempt if they flagrantly disobey the conditions of a decree, and they should take this warning seriously.
The Philadelphia District Office of the Equal Employment Opportunity Commission has jurisdiction over the entirety of Pennsylvania, as well as sections of New Jersey and Ohio, as well as Maryland and Delaware. In addition, the EEOC's legal division is responsible for the prosecution of discrimination charges in the state of Washington.