From big retail chains like Target to a small mom and pop-run grocery store, all companies and business owners must take measures to prevent loss of profits via theft. When discussing problems related to theft by employees, members of the public and accounting mistakes in the retail industry, the National Retail Federation uses the term inventory shrinkage. During 2011 alone, the NRF reports that U.S. retailers suffered losses totaling roughly $345 billion due to inventory shrinkage.

Given this significant figure, there’s no doubt that retailers both big and small must be proactive and take measures to protect against theft. The process by which one retailer conducted its theft prevention program is currently at the center of a class action lawsuit in which the major U.S. pharmacy chain CVS is named as the defendant.

In the lawsuit, four former CVS employees accuse the retailer of racial profiling and discrimination. According to court documents, the plaintiffs cite numerous examples where they were instructed by store supervisors to target black and Hispanic customers during undercover surveillance operations. Additionally, the plaintiffs report that supervisors routinely used offensive racial epitaphs when describing both minority groups.

What makes the plaintiffs’ claims even more disturbing is the fact that all four are black or Hispanic. According to the lawsuit, when directed to target minority customers the employee detectives were also the targets of racial slurs and discrimination by supervisors. What’s more, plaintiffs who complained about both their treatment and the treatment of minority customers were immediately targeted for increased scrutiny and micromanagement and eventually terminated.

The employment class-action lawsuit against CVS is significant in that it marks the “first time a group of employees has banded together to provide an inside account and expose the blatant racial profiling policy,” of a major U.S. retailer. We’ll continue to provide updates about this case as it moves forward.

Source: The New York Times, “Ex-Workers Accuse CVS of Racial Discrimination Against Shoppers,” Alan Feuer, June 3, 2015