Holiday Spas, which has been beset by charges it illegally discriminated against blacks and males in the last several years, ended a federal bias probe by agreeing yesterday to pay $1.4 million to some black job seekers.
It was the third discrimination settlement in the last year for Towson-based U.S. Health Inc., which owns about 40 East Coast Holiday Spas.
Last summer, U.S. Health agreed to pay $9.5 million to black customers who were illegally quoted higher prices or steered away from predominately white clubs.
More than 5,100 would-be customers have started receiving payments from the subsidiary of Bally Manufacturing of Chicago, said John Read, a Washington attorney who represented customers against the spas.
Also last summer, the spa company settled charges that it illegally discriminated against male customers by denying them access to aerobics classes.
To resolve a suit brought by the Maryland Human Relations Commission, the company agreed to let men join previously all-female exercise classes, said Lee D. Hoshall, assistant general counsel for the state agency.
And yesterday, the company agreed to offer back pay and job opportunities to some blacks who were denied employment between Nov. 1, 1987, and July 27, 1990.
The company also agreed to expand job recruitment efforts for minorities, promote qualified blacks to management positions, teach managers about federal employment laws and keep records so that the federal Equal Employment Opportunity Commission can monitor the company's progress.
Though it has agreed to offer back pay and change its hiring and promotion practices, the settlement does not mean Holiday Spas admits any wrongdoing, said Bernard J. Murphy, vice president of corporate and governmental affairs for Bally.
"We did agree with the EEOC that we could do a better job and we would institute a number of policies and procedures to ensure fair and equitable" employment practices, Mr. Murphy said.
He said the company wanted to settle the charges because it is under new management. "We are going to do things right," he said. "If there is any question, we want to err on being safe."