U. of Phoenix to settle case for $1.88 million

A federal judge has ordered the University of Phoenix and its parent company to pay $1.88 million to settle accusations that the university discriminated against non-Mormon employees in Arizona, the U.S. Equal Employment Opportunity Commission said Monday.

The commission in 2006 had filed a class-action lawsuit on behalf of 52 university employees, accusing the University of Phoenix Inc. and its parent corporation Apollo Group Inc. of violating the Civil Rights Act. The lawsuit contended the university had discriminated against non-Mormon employees who worked as enrollment counselors in the school's online division in the Phoenix metropolitan area, according to an EEOC news release.

The lawsuit said the University of Phoenix, which employs more than 2,000 people in its online-enrollment division, had engaged in the discriminatory behavior since at least 2001. Managers in the university's online enrollment department discriminated against employees who were not members of The Church of Jesus Christ of Latter-day Saints by promoting less-qualified Mormon workers while repeatedly denying such advancement to non-LDS employees, the lawsuit said.

The managers also disciplined non-Mormon employees for conduct that Mormon workers were not disciplined for, denied tuition waivers to non-Mormon employees, and provided LDS employees with better leads on potential students, the lawsuit said. Enrollment counselors at the University of Phoenix are responsible for recruiting students and are evaluated based on the number of students they help enroll.

"It is the EEOC's belief that, for many years, the University of Phoenix condoned an environment in which Mormon managers felt free to engage in favoritism toward their Mormon employees," said Mary Jo O'Neill, an EEOC attorney in Phoenix. "We are pleased that University of Phoenix is going to stop condoning such favoritism toward Mormon employees and the resultant discrimination against non-Mormon employees."

Phoenix-based Apollo is the largest for-profit provider of college degrees, with 362,100 students enrolled as of Aug. 31, according to a regulatory filing. The company gets 95 percent of its revenue from the University of Phoenix.

The university admitted no wrongdoing in settling the EEOC case, the company said in a statement on Oct. 31, after reaching the settlement.

"University of Phoenix is pleased to have resolved this matter," the company said. "We are dedicated to providing a work environment in which our employees are treated fairly and with respect."

In addition to the monetary damages, which will be distributed among the 52 workers, the settlement agreement calls for the University of Phoenix to develop a zero-tolerance policy regarding religious discrimination and to offer training for managers and other workers on the issue of religious discrimination, the EEOC said. The university also must create a system to include in managers' evaluations an assessment of their compliance with equal-opportunity employment laws. And the university must hire a diversity officer.

Robert Lein, who filed a charge of discrimination with the commission that resulted in the lawsuit, said he was pleased with the settlement.

"I am happy to hear that the University of Phoenix is making significant changes to its environment to prevent what happened to me and many of my colleagues from happening again in the future."

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Contributing: Bloomberg News.

E-mail: jlee@desnews.com