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Maker of Lemonheads and Red Hots settles race-discrimination lawsuit

The Chicago-area company that makes Lemonheads, Red Hots and Jaw Busters is settling a class-action lawsuit that alleges racial discrimination.

Ferrara Candy Company and two temporary-staffing firms that supplied labor for its factory in Forest Park, a western suburb, have agreed to pay $1.5 million to African American workers who claim they were illegally denied the opportunity to work, federal court records show.

The suit, brought in 2013, accuses Forest Park-based Remedial Environmental Manpower, known as REM, and a disbanded Illinois company called Labor Power of “complying with a discriminatory request from Ferrara to steer African American laborers away from Ferrara in favor of Latino laborers.”

Under settlement terms presented to U.S. Judge John Z. Lee on December 4, Ferrara will pay $1 million, Labor Power will pay $450,000 and REM will pay $50,000. The companies, according to the deal, are not admitting wrongdoing or liability.

At a Tuesday hearing, Lee is scheduled to consider allowing individual workers to receive up to $7,500.

“We estimate about 1,100 workers are eligible,” plaintiffs attorney Christopher Williams said.

A statement from Ferrara, headquartered in Oakbrook Terrace, denies all wrongdoing. “Ferrara treats its employees and prospective employees with fairness, equality and respect,” the statement says. “We look forward to putting this matter behind us.”

Attorneys for the staffing firms did not respond to WBEZ requests for comment.

Marc Bendick, a Virginia-based economist who worked for the plaintiffs, says racial discrimination in temporary staffing is widespread but hard to prove. “These settlements tend to be fairly rare — only a couple large ones every year around the country,” Bendick said.

Ferrara formed in 2012 through a merger of Minnesota-based Farley’s and Sathers and Ferrara Pan Candy Company. Its brands include Atomic Fireballs, Black Forest, Bob’s, Boston Baked Beans, Brach’s, Chuckles, Jujyfruits, Now and Later, and Trolli. Ferrara is majority-owned by Catterton Partners, a private-equity firm.

Ferrara’s net sales for the year ending September 30 totaled approximately $873 million, according to Moody’s Investors Service.

Community groups decried the alleged discrimination during protests last year at both the Forest Park factory and Oakbrook Terrace headquarters.

Chip Mitchell is WBEZ’s West Side bureau reporter. Follow him on Twitter @ChipMitchell1 and @WBEZoutloud, and connect with him through Facebook, Google+ and LinkedIn.

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