Fry's to Pay $2.3 Million In Sexting Case

Fry’s Electronics disputes the allegations brought by the EEOC and the plaintiffs in this case.

San Jose-based electronic retailer Fry’s Electronics agreed on Thursday to pay $2.3 million to settle a sexual harassment and retaliation lawsuit brought by the U.S. Equal Employment Opportunity Commission.
The EEOC filed suit against Fry's in 2010, alleging that a manager harassed a young salesperson near Seattle and fired a supervisor for standing up for her.

According to federal documents, Ka Lam, a manager at the chain's Renton, Wash., store was fired after alerting the company's legal department there and in San Jose to inappropriate behavior - including sending "sexually charged text messages" to saleswoman, America Rios, and inviting her home for a drink, according to the EEOC.

Lam was told his termination was due to a "decline in his his performance despite the fact that his work was consistently commended," according to the EEOC.

Fry's spokesman Manuel Valerio in San Jose sent a statement Thursday in response to NBC Bay Area's request for comment.

The statement reads in part: Fry’s Electronics disputes the allegations brought by the EEOC and the plaintiffs in this case.  However, in order to avoid additional litigation costs and to bring finality to this matter, Fry’s has agreed to resolve the case with a no-fault settlement in which all parties agree that there is no finding that Fry’s engaged in discrimination, harassment or retaliation. 

The statement also goes on to add that "Fry’s is and always has been committed to providing a workplace free from discrimination, harassment and retaliation...Whenever such issues are raised, Fry’s thoroughly investigates the matter and takes appropriate corrective action if any misconduct has occurred.  Fry’s is proud of its very diverse workforce at all levels of employment and its commitment to promoting the advancement of all employees regardless of gender, race, religion, national origin or other basis protected by law." 

Fry's has 34 stores and employs more than 14,000 people in the United States.

Fry's willingness to provide a retaliation-free environment is not how lawyers from the EEOC are viewing this case.

"Here was an employee who was willing to stick up for Ms. Rios, to tell the company we have a problem and we need to fix this," said William Tamayo, regional EEOC attorney in San Francisco. "But instead of taking Mr. Lam's advice, they retaliated against him. That sends a devastating message to employees."

The settlement occurred shortly after The Blankenship Law Firm completed trial in arbitration before The Honorable Terry Lukens, but prior to his ruling. Federal District Judge Robert S. Lasnik had previously sanctioned Fry’s and ordered the company to pay a total of $100,000, after he concluded Fry’s had “deliberately engaged in deceptive [litigation] practices” that were “unfair, unwarranted, unprincipled, and unacceptable.” 

Under the three-year consent decree filed Thursday in Lasnik's court, Fry’s agreed to provide monetary relief to Lam and Rios, who will both share undisclosed portions of the money, and take steps to prevent future harassment or retaliation, according to the EEOC. That includes ongoing training for all employees and management, reporting any complaints and the company’s responses to the EEOC, and posting a notice for all its employees about the settlement as well as contact information for reporting harassment, discrimination, or retaliation. 

Contact Lisa Fernandez at 408-432-4758 or

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