Kay Jewelers Lawsuits: Discrimination, Fraud, and CFPB Penalties

Kay Jewelers lawsuits over the past two decades include a $175 million gender discrimination class arbitration, a $240 million securities fraud settlement, an $11 million federal penalty for deceptive credit card practices, customer complaints about diamond swapping, a religious discrimination suit filed by a fired employee, and several wage-and-hour cases. Kay operates under Sterling Jewelers, a subsidiary of Signet Jewelers Limited, which also owns Jared, Zales, and Blue Nile across roughly 2,600 stores.¹ Most of the major cases name Sterling or Signet rather than Kay itself, but they involve conduct inside Kay stores or decisions by the company that owns the Kay brand.

The $175 Million Gender Discrimination Settlement

The largest case tied to Kay is Jock v. Sterling Jewelers, a class action brought on behalf of roughly 70,000 current and former female employees who alleged systemic sex discrimination in pay and promotions. Lead plaintiff Laryssa Jock filed her EEOC complaint in 2005, and the agency issued a reasonable-cause finding in January 2008 that Sterling had engaged in a nationwide pattern of sex discrimination.² Because Sterling required employees to use its internal “RESOLVE” program, the dispute was pushed into class arbitration rather than federal court.³

After more than a decade of fighting over whether class arbitration could even proceed, including a trip to the Supreme Court that ended in October 2020 when the Court declined to hear the case, the parties settled. The agreement was announced on June 9, 2022, for $175 million total: about $125 million for class members and roughly $50 million for class counsel.⁴⁵ Arbitrator John Gleeson granted final approval on November 15, 2022. Sterling was also required to change pay and promotion policies and build out mentorship, leadership training, and new complaint-investigation systems.³ The claims process has closed and distributions have been completed.

The Sexual Harassment Allegations Behind the Case

Running alongside the pay case were sworn declarations from female employees describing a workplace culture critics called hostile. Many of those statements were unsealed in February 2017 and described managers’ retreats as alcohol-fueled events where male executives allegedly targeted women.⁶⁷ A company spokesman said the claims were “not substantiated by the facts and certainly do not reflect our culture.”⁸

The harassment allegations were not resolved by the $175 million settlement, which was limited to pay and promotion claims.⁶ A separate EEOC action brought in the Western District of New York ended in a 2017 consent decree that required Sterling to hire an employment practice expert, run training programs, and overhaul its equal employment practices.⁹

The $240 Million Securities Fraud Settlement

The discrimination and harassment disclosures triggered a separate lawsuit from Signet shareholders. In In re Signet Jewelers Limited Securities Litigation, investors alleged that Signet made misleading public statements on two subjects: the scale of its harassment problems, which the company had described as limited to “store-level employment practices,” and the health of its credit portfolio, which it had described as “very strong” and “very stringently controlled” when the complaint alleged 45 percent of it was subprime.¹⁰¹¹

When the Washington Post published over 1,300 pages of employee declarations in February 2017, Signet’s stock fell nearly 13 percent in a single day.¹² The case, filed in the Southern District of New York, survived a motion to dismiss in November 2018 when Judge Colleen McMahon found the plaintiffs had adequately pleaded that specific statements were misleading rather than mere corporate puffery.¹⁰ The court granted final approval of a $240 million cash settlement on July 21, 2020. Distributions to the class began in March 2022 and have continued on a rolling basis, with a fourth distribution in August 2025.¹³

The $11 Million CFPB Penalty for Credit Card and Insurance Practices

In January 2019, Sterling agreed to pay $11 million to resolve allegations by the Consumer Financial Protection Bureau and the New York Attorney General that it had enrolled customers in store credit cards and credit insurance without their knowledge or consent. Regulators said Kay and Jared employees worked under enrollment quotas, one credit card application per day for mall stores and one every two days for standalone locations, with compensation and performance reviews tied to those numbers.¹⁴

According to the CFPB, employees told some customers they were signing up for a rewards or discount program when the paperwork was actually a credit application. Others were told their plans had “no interest” when they carried monthly financing fees, and some were enrolled in payment-protection insurance without consent.¹⁴ Sterling had more than 3 million open credit accounts annually between 2014 and 2017. Of the $11 million, $10 million went to the CFPB as a civil penalty and $1 million to New York State. Sterling did not admit wrongdoing and said it settled to avoid continued litigation costs.¹⁵ Signet had already begun outsourcing its credit portfolio in May 2017 and completed the transition in July 2018.¹⁶

Customer Complaints About Diamond Swapping

Starting in 2016, customers publicly accused Kay of replacing their diamonds with cheaper stones during routine repairs and the inspections required to maintain Kay’s gemstone guarantee. Maryland customer Chrissy Clarius said the diamond in her $4,300 engagement ring came back as moissanite, confirmed by two outside jewelers; she filed a police report and a complaint with the Maryland Attorney General’s consumer protection division. In another case, customer Hannah LaFlam found that her stone’s serial number no longer matched her paperwork after a repair; Kay later located her original diamond at a facility in New Hampshire and returned it along with a gift card.¹⁷ Complaints spread through a Facebook group called “Boycott Kay Jewelers.”

Signet denied any systematic swapping, saying it has rigorous testing processes before and after repairs and that misconduct is “exceedingly rare.” The company said it handles more than 4 million service and repair transactions a year across its stores, with more than 99 percent generating no negative feedback. Signet’s stock dropped as much as 14 percent intraday on June 2, 2016, following the coverage.¹⁸ No class action or formal settlement arising from the diamond-swap complaints has been publicly reported.

Religious Discrimination Lawsuit: Cohen v. Sterling Jewelers

In November 2024, former Kay Jewelers assistant manager Mika Cohen filed suit in the Northern District of Ohio alleging she was fired for sharing her religious beliefs. According to the complaint, a coworker at the Fairlawn, Ohio, store initiated a conversation about LGBTQ+ Pride Month in June 2023 and repeatedly asked for Cohen’s views; Cohen said she believed “marriage is defined in the Bible as between one man and one woman only.” She was investigated by a Signet internal investigator and terminated in August 2023, allegedly for “talking about God during a conversation with a co-worker at work.”¹⁹

Cohen, represented by the American Center for Law and Justice, sought back pay, punitive damages, and compensation for emotional distress under Title VII.²⁰ The parties settled, and Judge Bridget Meehan Brennan dismissed the case with prejudice on September 23, 2025. Settlement terms were not disclosed.²¹

Wage and Hour Case in California

In Hudson v. Sterling Jewelers Inc., roughly 3,800 California workers alleged Sterling failed to provide uninterrupted 30-minute meal breaks, miscalculated overtime pay by excluding commissions from the regular rate, and failed to pay earned commissions and bonuses to departing employees. The case settled for $1.5 million. Sterling denied the allegations.²²

Pending Privacy Investigation

Attorneys are investigating whether Kay Jewelers violated the California Invasion of Privacy Act by embedding tracking technology on its website that allegedly sent users’ personal data to third parties, including TikTok and Google, without consent. The investigation targets California residents who made purchases or kept accounts on Kay.com, and the attorneys are pursuing claims through mass arbitration rather than a class action. No lawsuit has been filed.²³

1
Signet Jewelers. Signet Jewelers Annual Report FY2025
2
Jenner & Block LLP. Jock v. Sterling Jewelers, 10-3247-cv
3
Cohen Milstein Sellers & Toll. Sterling Jewelers Case Study
4
Signet Jewelers. Sterling Jewelers Cohen Milstein Class Action Litigation Agreement
5
Washington Post. Sterling Kay Jared Sex Discrimination
6
ABC News. Sterling Jewelers Parent Company Kay Jewelers Jared Zales
7
Impact Fund. CAHOF Jock
8
WNYC Studios. Hundreds of Women Sue Jeweler
9
Civil Rights Litigation Clearinghouse. EEOC v. Sterling Jewelers Inc.
10
Civil Rights Litigation Clearinghouse. Jock v. Sterling Jewelers Inc.
11
Bloomberg Law. Signet Investors Get Final Court OK of $240 Million Settlement
12
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13
Bernstein Litowitz Berger & Grossmann. Signet Jewelers Limited
14
New York Attorney General. Attorney General James and Consumer Financial Protection Bureau Announce $11 Million Settlement
15
American Banker. CFPB, NY State Order Sterling Jewelers to Pay $11 Million
16
National Jeweler. Signet Jewelers Fined $11M Over In-Store Credit Cards
17
BuzzFeed News. Women Say Kay Swapped Their Diamonds
18
Chicago Tribune. Kay Jewelers Owner Denies Engaging in Diamond Swapping
19
NBC4i. Ohio Kay Jewelers Worker Fired for Opposing Same-Sex Marriage, Lawsuit Says
20
The Buckeye Flame. Fired Ohio Woman Sues Jeweler
21
PACER Monitor. Cohen v. Sterling Jewelers Inc.
22
Lawyers and Settlements. Diamonds Wage Theft
23
ClassAction.org. Online Shopping Investigations and Lawsuits