FranchisePick.com reports that the EEOC has won a $20 Million discrimination lawsuit against Pure Weight Loss (formerly LA Weight Loss) despite the fact the company went into bankruptcy in January, 2008 (see The EEOC Celebrates $20M Victory Over Non-Existent Company)
In a nutshell, the EEOC has won $20 million and other “significant relief” on behalf of workers who were never hired by Pure Weight Loss (formerly LA Weight Loss), which closed its 400 locations earlier this year. Thanks to this landmark victory by the EEOC, the male employees who were never hired will be entitled to $16 million in back pay for work they never performed, and will now be offered positions in the company that no longer exists.
The EEOC becomes Creditor #100,001.
The closing of Pure Weight Loss (formerly LA Weight Loss) left thousands of customers cheated out of prepaid services and left employees nationwide jobless. With more than 100,000 creditors and liabilities at $10 million to $50 million, Pure Weight Loss filed for Chapter 7 bankruptcy. Shortly thereafter, the Attorney General of PA sued for fraud and moved to seize both corporate and personal assets of the company and its founder, Vahan Karian.
According to the EEOC, Pure Weight Loss discriminated against male applicants, having denied them the same opportunity to receive pre-Christmas pink slips and bounced paychecks like their female cohorts. In its battle against employment injustice, the EEOC is not fazed by a small obstacle such as the non-existence of the employer.
Did Pure Weight Loss Close Because of the EEOC?
The EEOC originally sued L.A. Weight Loss Centers, Inc. (LAWL) in February 2002 under Title VII of the 1964 Civil Rights Act, alleging that the company “engaged in a pattern or practice of disparate treatment against men in its recruiting, hiring, and assignment of employees.” On September 6, 2007, an EEOC press release announced “A federal court has ruled that the U.S. Equal Employment Opportunity Commission (EEOC) may proceed to trial with its class sex discrimination lawsuit against L.A. Weight Loss Centers, Inc. (LAWL) on behalf of qualified male applicants nationwide.”
The judge’s decisive rejection of LAWL’s motions to dismiss the case indicated that the EEOC case, which included “discriminatory admissions by various high-level LAWL officials,” was strong.
Three months later, Pure Weight Loss announced it was closing all 400 centers nationwide and laying off all employees, male and female.
Could it be that Vahan Karian’s LA Weight Loss knew this judgement was coming all along, and decided to change its name to Pure Weight Loss and shut down all its center shortly thereafter because it knew the EEOC was going to win?
There’s more to this story than meets the eye.
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