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Barneys New York to pay $525,000 in racial profiling settlement

By Laila Kearney

NEW YORK (Reuters) - Barneys New York [DBWLDB.UL] has agreed to pay $525,000 to settle a lawsuit over claims that it targeted black and Latino customers for credit-card fraud checks and surveillance while they shopped in its luxury clothing stores, city officials said on Monday.

The lawsuit followed claims last fall that the store falsely accused two African-American customers of credit card fraud at the Barneys store in Manhattan, sparking protests and calls to boycott the chain.

"Profiling and racial discrimination remain a problem in our state, but not one we are willing to accept," New York state Attorney General Eric Schneiderman said in a statement.

"This agreement will correct a number of wrongs, both by fixing past policies and by monitoring the actions of Barneys and its employees to make sure that past mistakes are not repeated," he said.

Under the settlement, Barneys will pay a $525,000 fine, hire an anti-profiling consultant and re-train its employees, Schneiderman said.

Following the complaints, the attorney general's office investigated other possible racial profiling incidents at Barneys stores.

The complaints they reviewed from several customers and former Barneys employees included claims that door guards exclusively marked minority customers for surveillance and in-house detectives followed minority customers even when sales associates said the customers were frequent patrons of the store, Schneiderman said.

Some sales associates avoided serving minority clients so they would not be contacted by store security who would want to investigate the customers' credit card purchases, he added.

In a statement, Barneys said it was pleased to have reached an agreement with the state. "We are a truly progressive company that has absolutely no tolerance for discrimination of any kind," the 90-year-old company said.

The privately-held Barneys operates at least 17 department stores in the United States in addition to its outlet stores.

On its website, Barneys describes itself as "a mecca for discerning fashionistas and clothing connoisseurs," and quotes "Sex and the City" actress Sarah Jessica Parker as telling Vanity Fair, "If you're a nice person and you work hard, you get to go shopping at Barneys. It's the decadent reward."

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