Portfolio Recovery Associates Inc., a Norfolk, Va. debt buyer, announced this afternoon a "mutually agreeable resolution" to a racial discrimination lawsuit filed by a former executive.

Mark Johnson, a former vice president at the firm, sued Portfolio Recovery (NASDAQ: PRAA) in October 2008, alleging the company underpaid him because he is black, then fired him when he complained. The suit was filed in the U.S. District Court Eastern District of Virginia.

"Any accusations that have resulted from this misunderstanding are unfortunate and regrettable,” said the company, in an official statement, “After carefully considering all of the circumstances, the parties have decided to put the matter behind them."

Johnson joined the firm in 2003 as an assistant vice president, before being promoted to vice president. He alleged he earned just under $275,000 in compensation in 2006, while another vice president with similar job duties earned more than $900,000, according to the original complaint. He was seeking $4 million in damages.

Johnson was fired in April 2008. Portfolio Recovery said at the time that Johnson had violated a confidentiality agreement because he revealed information to an attorney. Johnson argued he was fired because he questioned the pay discrepancy.

A company spokesperson tells Collections & Credit Risk that the parties involved agreed there would be no official comment about the case or the resolution. Johnson's attorney, Lisa Bertini, a partner with Bertini O'Donnell & Hammer PC in Norfolk, did not immediately return a call seeking comment. Johnson could not be reached.

The Federal Trade Commission last month said Portfolio Recovery is one of nine companies the government agency ordered to turn over information about their purchasing and collection practices for an examination of the industry, FTC Identifies Debt Buyers Named In Industry Study, Jan. 8.

According to Collections & Credit Risk's 2009 industry rankings research, PRA reported $260 million in revenue from purchased debt, making it the sixth-largest U.S. debt buyer.

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