RONALD E KELLY, Complainant

SEARS ROEBUCK & COMPANY, Respondent

An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own, except that it makes the following modifications:

1. Delete the third sentence of paragraph 2 of the ALJ's FINDINGS OF FACT, and replace it with the following:

Around 2003, Kelly became the manager of the home improvement department. In 2005, he became the manager of the brand central department.

2. After the second sentence of paragraph 5 of the ALJ's FINDINGS OF FACT, add the following:

At the time Whipple began as store manager, Woznicki had been the store's apparel manager for about four months, and Kelly had been brand central manager for about three years. Braunel was employed as the operations manager.

3. Between paragraph 7 and 8 of the ALJ's FINDINGS OF FACT, add the following paragraph:

Whipple did not hire a new home improvement manager. Instead, he had Braunel perform as both operations manager and home improvement manager.

4. In the second sentence of paragraph 15 of the ALJ's FINDINGS OF FACT, delete "early 2009" and replace it with "late 2008", and after the fourth sentence of the paragraph, insert the following:

Whipple documented his reasons for placing Kelly on a PIP on a form that he showed to Kelly. The first reason listed was Whipple's belief that Kelly's department was not displaying merchandise for sale according to Sears' standards. The second reason listed was Whipple's belief that Kelly's department was taking too long following directives to alter displays of merchandise. The third reason listed was Whipple's belief that Kelly was responsible for a low customer satisfaction score for his department. The fourth reason listed was Whipple's belief that Kelly's department was not following Sears' standards for clearing old merchandise by putting it on display and reducing prices. The fifth reason listed was Whipple's belief that Kelly was responsible for relatively low profit margins in his department. The sixth reason listed was the department's failure to make its goal to sell a certain percentage of protection agreements associated with sales of merchandise. Whipple believed that better performance in selling protection agreements would have improved profit margins for the department. The seventh reason listed was the perception that the department did not sell a sufficient number of installations in connection with sales of merchandise. The eighth reason listed was Whipple's belief that the display of merchandise in Kelly's department was not up to Sears' clean and bright standards. The ninth reason listed was Whipple's belief that Kelly had failed to give his associates proper training. The tenth reason listed was Whipple's belief that improper signage was being used in Kelly's department. The eleventh reason listed was Whipple's perception that Kelly did not put in the time and effort required to lead his associates. Whipple's opinion of Kelly's performance was based on his personal observations, the observations of Whipple's supervisor, Bogle, and Kelly's review of a variety of reports that tracked, among other things, sales, profit margins, protection agreements, installation work, compliance with plans for displays called planograms, and movement of old merchandise. Kelly's age was not a factor in Whipple's decision to place Kelly on a PIP.

5. Between paragraphs 19 and 20 of the ALJ's FINDINGS OF FACT, insert the following paragraph:

Also on February 13, 2009, Whipple gave Kelly his 2008 performance review. The performance review was divided into two categories-behaviors and business results. Within the category behaviors Whipple rated Kelly under each of the following headings: customer focused; effective decision making; effectiveness/attains results; leadership/people oriented; and process thinking. Whipple rated Kelly as "needs improvement" under each heading. The headings under business results were: build customer relationships; make more money; and improve every day. Whipple rated Kelly as a "contributor" in building customer relationships and improving every day, and as a "low contributor in making more money. In a section on overall comments, Whipple wrote:

You are a nice person who has let mediocrity seep into your area of responsibly [sic]. This past year your associates ran your department, not you. There was no ownership, holding people accountable, and very poor execution all thru the year. Our margin, sales, customer service all took a huge hit because of this. During this most difficult retail time the lack of leadership was glaring. The culture in this store has to change and it begins with you Ron. If not I do not see you in our plans for 2009.

Kelly did not dispute any of the ratings Whipple gave him during their discussion on February 13th.

6. Delete paragraphs 20 and 21 in the ALJ's FINDINGS OF FACT and insert in their place the following three paragraphs:

On April 2, 2009 Whipple interviewed Chris Carlson, who was in his early 40s, for a position as automotive department manager. Although Carlson was not the top candidate for the position, Whipple was impressed by the fact that Carlson was an ex-Marine, had an MBA, and was prepared to speak about his qualifications listed in the job description. Whipple thought he would be very professional, a characteristic he wanted in a brand central manager. Whipple notified Bogle that he thought Carlson would make a good replacement for Kelly. By April 7, Whipple had decided to remove Kelly from his position and offer the position to Carlson.

On Monday, April 9, 2009, Whipple met with Kelly and told him that he could return to a position as a sales associate, resign, or be terminated. Whipple gave Kelly until Friday, April 13, 2009 to decide. On April 13th, Kelly declined to be demoted or resign, and Whipple terminated his employment with Sears.

Whipple did not have his two other managers, Woznicki and Braunel, placed on PIPs. Included in his reasons for not doing so were the facts that Woznicki was still fairly new to her position, and Braunel was holding two positions at once.

The decision of the administrative law judge (copy attached), as modified, is affirmed.

Dated and mailed  May 30, 2014 
kellyro_rmd . doc : 107 :

BY THE COMMISSION:

/s/ Laurie R. McCallum, Chairperson

/s/ C. William Jordahl, Commissioner

/s/ David B. Falstad, Commissioner

The respondent argued that the complainant failed to show a prima facie case because he did not show that he was qualified for the job, citing his placement on an improvement plan due to poor performance. The complainant, in turn, argued that his service as a sales associate for well over 20 years, then as a sales coordinator, and three years as an assistant store manager, with at least two years of satisfactory performance reviews in that position, make it obvious that he was a qualified employee.

The commission notes that for purposes of showing a prima facie case, a complainant only needs to show that he was meeting the minimum qualifications for continued employment. Id. at 174. Furthermore, the commission has held that the burden of establishing a prima facie case is not intended to be onerous, and that the policy served by the requirement is simply to eliminate the most common non-discriminatory reasons for an adverse employment decision. Foust v. City of Oshkosh Police Dept, ERD Case No. 9200216 (LIRC Apr. 9, 1998). Most importantly, though, the question of whether the complainant has made a prima facie case is made irrelevant if the respondent has presented evidence defending its adverse action as non-discriminatory. When that is the case, as it is here, the case proceeds directly to consideration of the ultimate factual inquiry, whether the respondent's action had a discriminatory motive. Gentilli v. Badger Coaches, ERD Case No. 86-01411 (LIRC July 12, 1990), aff'd sub nom. Gentilli v. LIRC (Wis. Cir Ct. Dane County Jan. 15, 1991). Under the indirect method of proof, that inquiry is often still focused on whether the employer's proffered non-discriminatory reason is false or a pretext for discrimination. Puetz, supra, at 175-77.

The respondent's proffered reason for discharging the complainant was poor performance. The complainant raised a number of points attempting to show that reason to be pretextual. The complainant bears the burden of proving pretext. Stern v. RF Technologies, ERD Case No. 200200780 (LIRC Feb. 6, 2004). The focus of a pretext inquiry is whether the stated reason for an action is honest. Thobaben v. Waupaca Sheriff's Department, ERD Case No. CR200602483 (LIRC Dec. 23, 2011). The decision-maker in a discrimination case may not substitute its business judgment for that of the employer. The respondent's stated reason may fail to be accurate, wise or well-considered, but still be non-discriminatory. Ebner v. Dura Tech, ERD Case No. CR200504645 (LIRC Apr. 23, 2009).

The complainant's central argument is based on two reports generated on April 4, 2009. One report shows that as of that date the complainant's department was above its sales goal, and ahead of sales performance in the previous year, while Woznicki's and Braunel's departments were below their goals, and behind the previous year's performance. The other report, according to the complainant, showed that the complainant's department was second in the district (which included about 10 stores) in a measurement called "contribution dollars per hour." The complainant essentially argues that the respondent could not have sincerely believed the complainant was performing poorly, especially compared to his younger peers, given these reports.

The respondent presented a number of arguments in response. First, the respondent argued that the second report (Ex. C) was not reliable evidence of the complainant's performance, for several reasons: there was no persuasive evidence explaining the measurement "contribution dollars per hour;" no connection between that measurement and the complainant's individual performance; no evidence that the respondent's decision-maker was aware of the metric at the time he made his decision to terminate, or that he looked at performance of departments in other stores when evaluating the complainant's performance; and no evidence accompanying the report that would have been indicative of good performance, such as the percentage of protection agreements or sales of additional products in connection with sales of an appliance. Second, the respondent argued that the complainant was placed on a PIP for deficiencies in his manner as much as his sales and profitability numbers, and the PIP documentation supports this contention. Whipple's written comments in the PIP documentation place an emphasis on his perception of the complainant as someone who did not demonstrate what he perceived as leadership qualities, such as holding his employees to performance and training standards, instilling in them a desire to give good customer service, and being willing to put in extra hours. Third, regarding the complainant's sales comparison to his younger peers, the respondent argued that they were not similarly situated to the complainant: first, neither Woznicki nor Braunel had demonstrated the leadership problems that the complainant had demonstrated; and second, Woznicki still had less than one year in her position at the time of the complainant's termination, and Braunel had been holding down two jobs at once, home improvement manager and operations manager.

The commission does not accept the complainant's proposition that the two sales reports make the respondent's reasons for its actions implausible. The leadership concerns on which the respondent relied were, on their face, legitimate business concerns. For the commission to reject them would be to substitute its own business judgment for that of the respondent.

The complainant was replaced by an individual, Carlson, who was considerably younger than the complainant, although Carlson was over the age of 40, and thus in the protected age group himself. The complainant's main argument that age was a motivating factor in this selection was based on the evidence that Whipple was impressed by Carlson's Master's degree in business administration, even though the job description for brand central manager emphasized experience over education. Possession of a Master's degree, however, is not indicative of an individual's age. The fact that it was not an achievement required for the job did not make it implausible for Whipple to have been favorably impressed by it. Whipple explained that Carlson's studies in human resources led him to believe that Carlson would be good with people and very professional, two characteristics that Whipple believed were important to be a successful manager. It was not shown that age was a contributing factor in his favorable impression of Carlson.

The complainant made several other arguments, but considering all of them, along with the arguments referenced above, the commission does not conclude that they carried the complainant's burden to show pretext. First, in the course of a deposition of Whipple prior to the hearing in this matter, he was asked to identify a particular employee; he had trouble remembering the employee, and offered the description that he was an "old guy." This reference was merely descriptive and did not indicate an age bias. Second, the complainant pointed to the fact that shortly after Whipple became the complainant's supervisor, he posted an ad for a hard lines manager position which included a job description that encompassed the complainant's job duties, along with the duties of home improvement manager. Whipple testified credibly that he was only interested in filling a position for home improvement manager, and that it was the respondent's corporate office, not Whipple, who was responsible for the posting. The complainant's argument that Whipple was maneuvering to replace the complainant by advertising for a hard lines manager was speculation. Third, the complainant contended that Whipple deliberately avoided getting corporate human resources' approval before terminating his employment in order to avoid being questioned by human resources about the legitimacy of his decision. Whipple testified that he simply did not know, once he had his supervisor's approval, that he also needed the approval of the corporate human resources office. Whipple admitted having contacted the corporate human resources office before discharging the automotive manager, but explained that his contact had to do not with getting approval, but with getting advice on whether there should be any criminal prosecution of the manager. The complainant did not show Whipple's testimony to be untrue.

Finally, the complainant argues that the ALJ should have found that the respondent destroyed evidence relevant to the complainant's litigation, and should have sanctioned the respondent in some way, for instance, by making an inference that the destroyed evidence favored the complainant's claim. The evidence to which the complainant is referring consists of reports noted in the respondent's PIP documents to support its determination to place the complainant on a PIP, and reports used to support its later determination that the complainant was not making satisfactory progress in the PIP. The reports, listed in the findings of fact above as tracking sales, profit margins, protection agreements, installation work, compliance with plans for displays, and movement of old merchandise, no longer existed by the time the complainant requested copies of them in the course of this litigation.

The question of whether to sanction a party for destruction, or spoliation, of evidence, is a matter within the discretion of the trier of fact. Garfoot v. Fireman's Fund Ins. Co., 228 Wis.2d 707, 717, 599 N.W.2d 411 (Ct. App. 1999). The commission's review of discretionary rulings by an ALJ involves consideration of whether the ALJ "examined the relevant facts, applied a proper standard of law, and, using a demonstrated rational process, reached a conclusion that a reasonable judge could reach." Id;  Obasi v. Milwaukee School of Engineering, ERD Case No. CR201003882 (LIRC Oct. 14, 2013).

A prerequisite to sanctioning a party for the destruction of documentary evidence is that the party responsible for the destruction knew or should have known at the time it caused the destruction of the documents that litigation was a distinct possibility, and knew, or should have known, that the documents would constitute evidence relevant to the pending or potential litigation. Milwaukee Constructors II v. Milwaukee Metropolitan Sewage Dist., 177 Wis.2d 523, 532, 502 N.W.2d 881 (Ct. App. 1993);   Insurance Company of North America v. Cold Spring Egg Farm, Inc., 2004 WI App 15, ¶ 15, 269 Wis.2d 286, 294-95, 674 N.W.2d 886.

The ALJ imposed no sanction on the respondent, and his rationale for not doing so can be gleaned from his Memorandum Opinion. The ALJ noted that the complainant acknowledged that he had access to the numbers that Whipple used when Whipple reviewed the complainant's PIP documentation with him, and he acknowledged that he did not object to any of the numbers, or find any of them to be suspicious. Whipple's meetings with the complainant, then, did not give Whipple reason to believe that there was a distinct possibility that the complainant would commence litigation against the respondent.

Certainly, by the time the respondent was notified by the ERD that the complainant had filed his complaint, which would have been in February 2010, the respondent had the duty to preserve relevant evidence, and that duty would have extended to the documents in question, but there is no evidence that respondent's duty arose any earlier than that. There is no evidence, for example, that at any time prior to the filing of the complaint the complainant indicated to the respondent that he believed the respondent to be in violation of any law, or that he intended to see a lawyer about his termination, or, as noted above, that he disagreed with the documents the respondent was using to terminate his employment. Considering that any involuntary termination of employment carries the possibility of a claim of wrongful or discriminatory discharge (a claim of sex discrimination, for instance, is always at least a possibility), there should be some particular evidence presented to satisfy the requirement that a "distinct" possibility of litigation exists in order to trigger the duty to preserve reasonably relevant evidence. Under the circumstances of this case, the ALJ did not abuse his discretion by failing to find that such a distinct possibility existed prior to the time the evidence was destroyed.

The commission affirms the decision of the ALJ, with the modifications noted.

cc:
Attorney Matthew E. Yde
Attorney Laura A. Lindner

[ Search ER Decisions ] - [ ER Decision Digest ] - [ ER Legal Resources ] - [ LIRC Home Page ]

uploaded 2014/06/05