Dollar Tree Agrees to Pay Previously Denied Benefits in Hate Crime Death

Three weeks after a slain woman's family went public with her employer's refusal to pay out death benefits because she was killed in a racially motivated attack on the job, the company offered a settlement to the woman's son.

In a statement e-mailed to ABCNews.com, Dollar Tree's vice president of investor relations, Tim Reid, did not detail why the company reversed its decision to deny death benefits to Taneka Talley's family, but said that Dollar Tree had offered the full worker's compensation benefit permitted by California law.

"While we were advised that the claim would not be covered under the state worker's compensation law," Reid wrote, "we feel this is the right thing to do for Taneka's son."

Talley was stabbed to death in the Fairfield, Calif., Dollar Tree where she worked in March 2006 by a white man who reportedly attacked her simply because she was black.

While Talley's mother is thrilled this fight is nearing an end, her lawyer says Dollar Tree didn't offer the full amount.

"We're pretty close and I believe we're going to settle it," said Moira Stagliano of Boxer & Gerson in Oakland, Calif.

Stagliano was hired by Carol Frazier, Talley's mother, after Frazier was told she was being denied her daughter's death benefits she was hoping to use to send Talley's son to college.

It was Taneka Talley's greatest wish to see her son head off to college. It was why she took extra shifts at work and set her sights on promotions.

Frazier told ABCNews.com the settlement offer was "very good news" and that she's thankful for everyone who has fought on her behalf.

"It wasn't right from the beginning," she said. "It really tore me and it bothered me a lot."

Talley's son, Larry Olden III, now 11, doesn't understand all the details of his grandmother's fight for his mother's benefits.

"I just know he misses his mom," she said.

Stagliano said that in offering the settlement, Dollar Tree asked that she not discuss specific dollar amounts with the media, but said the extra money she's hoping to recover for Frazier is "not insurmountable."

Stagliano said she got a letter offering the settlement last week.

"I can only assume it's the media pressure because they are continuing to say they don't believe it's work-related," she said.

Reid did not immediately respond to messages today seeking further comment on the settlement.

Stagliano told ABCNews.com last month that Talley's death benefits were denied because the killer's targeting her as a black person established a "personal connection" that the company claimed releases them from having to pay.

California law states an employer must pay death benefits if the employee was killed on the job and if the death was a result of the person's employment, Stagliano said.

But the law also allows benefits to be denied if the death stemmed from a personal connection between the victim and the attacker, such as a husband who kills his wife on company grounds.

According to Stagliano, the benefits were denied on the basis that the suspect in Talley's slaying, 45-year-old Tommy Thompson, allegedly made the relationship with Talley personal by choosing to attack her specifically based on the color of her skin.

Thompson and Talley had no previous known interaction with each other.

In a letter to Stagliano dated Sept. 12, the law firm Gray & Prouty wrote that Talley's stabbing was "purely racially motivated. As such, it is our belief that our denial in this matter is proper."

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