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Levan v. Sears, Roebuck & Co.

United States District Court, E.D. Tennessee

November 25, 2013

ADAM W. LEVAN and DARYL W. SIMS, Plaintiffs,
SEARS, ROEBUCK & CO., Defendant

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For Adam W LeVan, Daryl W Sims, Plaintiffs: Dale J Montpelier, Montpelier, Cole, Della-Rodolfa & Ford, P.C., Knoxville, TN; Katherine A Young, Young Law Office, P.C., Knoxville, TN.

For Sears, Roebuck & Co., Defendant: C Eric Stevens, J Christopher Anderson, Rachel Ross Rosenblatt, LEAD ATTORNEYS, Jennifer Bergstrom Robinson, Littler Mendelson, P.C. (Nashville), Nashville, TN.


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This civil action is before the Court on defendant's motions for summary judgment [Docs. 36, 38], in which defendant moves the Court for summary judgment on all of plaintiffs' claims. Each plaintiff filed a response in opposition [Docs. 53, 54], to which defendant replied [Docs. 60, 62]. Plaintiffs subsequently filed sur-replies [Docs. 68, 69]. The Court has thoroughly considered the arguments of the parties, the relevant documents and exhibits, and the controlling law. For the reasons stated herein, defendant's motion as to plaintiff Adam LeVan [Doc. 36] will be GRANTED in part and DENIED in part, and defendant's motion as to plaintiff Daryl Sims [Doc. 38] will be DENIED.[1]

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I. Background

1. LeVan's Complaints

Plaintiff Adam LeVan (" LeVan" ) began working for defendant on November 10, 2008, and was employed by defendant in its Chattanooga, Tennessee, Fort Walton, Florida, and Knoxville, Tennessee stores until defendant terminated his employment on July 27, 2011 [Docs. 37, 36-1 pp. 55, 60]. LeVan transferred from the Fort Walton, Florida store to the West Town Mall store (" West Town store" ) in Knoxville at the end of January 2011 [Doc. 36-1 p. 54]. At the West Town store, LeVan worked as a Consultative Sales Associate in the Home Appliance/Brand Central department [Docs. 37, 53]. LeVan was compensated on a " draw vs. commission basis," meaning that he was paid the commissions he earned, but if his commissions per hour worked amounted to less than minimum wage, then he was paid minimum wage for each hour worked [Doc. 36-1 p. 100]. His average weekly gross pay was around $800, which amounts to around $20 per hour [ Id. at 106-07]. Moreover, LeVan stated that his commissions were almost always more than the minimum wage " draw" [ Id. at 99-100].

Commissioned members of the sales staff were sometimes required to perform non-selling activities, such as training, stocking, and calling customers [ Id. at 109-11]. LeVan and other sales employees questioned the legality of defendant asking its commissioned employees to do more than two hours per week of this non-selling work without paying them a separate hourly wage for such work. In June 2011, LeVan printed a compensation manual from the 88Sears website and took it to his supervisor, Melissa Brabson (" Brabson" ), to discuss the matter with her [ Id. at 133, 139-40]. 88Sears is defendant's employee hotline [Doc. 37].

LeVan questioned the legality of the West Town store's approach to this issue because he alleges that he was separately compensated by defendant's Fort Walton, Florida store for such non-selling activities [Doc. 36-1 pp. 130-32]. Brabson turned the 88Sears manual over to Tim Lockhart (" Lockhart" ), the general manager of the West Town store [ Id. ]. According to LeVan, when Lockhart returned from vacation and learned that employees were questioning defendant's compensation policies, he became " very upset" and said to a group of employees that defendant " was hiring everyday" [ Id. at 133].

LeVan did not witness this incident, and every employee who did interpreted Lockhart's words differently, but Lockhart's boss, Kevin Dornfeld (" Dornfeld" ), who discussed the incident with Lockhart, recalls that Lockhart told Dornfeld he said: " I come back, 88Sears is involved, I guess we're hiring" [Doc. 53-1 p. 44]. Dornfeld recalls that Lockhart called him after making the statement and expressed his frustration that the employees did not bring the issue directly to him and brought it up with Brabson while Lockhart was on vacation [Doc. 54-1 p. 28]. Lockhart was later disciplined for this statement [Doc. 36-6 pp. 56-57]. Joyce Hill (" Hill" ), a sales employee who witnessed Lockhart's statement, maintains that she " felt like it was something to do with [the plaintiffs' complaints regarding defendant's pay policies]" and interpreted Lockhart's statement as " a threat" [Docs. 36-3 p. 36, 53-9 p. 38]. After LeVan learned of Lockhart's

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statement, he called 88Sears to complain about Lockhart's behavior and defendant's pay policy, intending for the call to be anonymous [Doc. 36-1 p. 133]. In addition, LeVan later complained to Dornfeld [Doc. 53-4 p. 151].

2. LeVan's Termination

When LeVan was hired on November 10, 2008, he signed an acknowledgement indicating that he had read defendant's employee handbook, which states that abuse of the employee discount privilege can result in termination [Doc. 36-1 ex. 1]. Defendant's policy regarding employee discounts was that only employees, spouses, and dependents could use the discount [ Id. ]. LeVan submits that he believed, based on a sale he executed at defendant's store in Florida with his manager's approval, that parents that live with employees could also use the employee discount [ Id.; Doc 53-4 pp. 33-34]. On July 17, 2011, approximately a month after LeVan complained to 88Sears, LeVan rang up a sale for the parents of a fellow employee, Christopher Marrero (" Marrero" ) [Doc. 36-1 pp. 199-200]. More specifically, LeVan went to another department and rang up a sale with Marrero's mother's credit card and his own employee identification number, but allowed Marrero's mother to use her son's employee discount card [ Id. at 199; Id. ex. 7; Doc. 37].

LeVan argues that he made an honest mistake, but acknowledges that this transaction violated defendant's employee policy [Doc. 36-1 ex. 2]. Still, defendant's employee handbook emphasizes that " it is [the employee's] responsibility to ask for the associate discount only where [the employee is] eligible" [ Id. ex. 2]. LeVan knew that defendant took compliance with the employee discount policy very seriously, stating that he " was concerned about every discount [he] took because [defendant] was so funny about that" [ Id. at 209]. On the same day that LeVan executed the sale with Marrero's mother, Marrero executed four sales to his parents using the employee identification number of a fellow employee, William Hembree (" Hembree" ), and his own employee discount card because Marrero claims he wanted to help Hembree boost his commissions [Doc. 62-2]. By using Hembree's employee identification number, it would appear that Hembree had executed the sales to the customers. As a result of these events, Marrero was fired on July 25 or 26, 2011 [Doc. 62-2]. Lockhart did not participate in the decision to terminate Marrero and is unsure who did [Doc. 53-8 p. 153].

LeVan was terminated on or about July 27, 2011 [Doc. 32-1 ¶ 11]. According to Karen Hudson (" Hudson" ), defendant's Loss Prevention Manager, Jessie Coile (" Coile" ), the home improvement manager, asked Hudson to investigate what Coile characterized as " suspicious activity" [Doc. 36-7 p. 24]. Hudson reviewed the video tape of LeVan's transaction with Marrero's parents and spoke with LeVan [Doc. 36-1 ex. 6]. LeVan admitted in a written statement to executing the transaction, but submitted that he was unaware that the transaction violated defendant's policy based on his experience at the Florida store and his assumption that because Marrero appeared to be younger, Marrero still lived with his parents [ Id. at 210]. Notably, LeVan alleges that before Hudson asked him about the incident with Marrero's parents, she first accused him of another policy violation involving a price adjustment with an employee named Scott Atchley [Doc. 53-4 p. 138]. LeVan claims that when he corrected Hudson's version of events, she disputed LeVan's version, but then dropped the matter when LeVan asked for proof and moved on to the Marrero discount incident [ Id. at 138-39].

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Subsequently, LeVan's transaction with Marrero's parents was reported to Lockhart, who called Dornfeld to advise him that he planned to terminate LeVan for a violation of defendant's policy [Doc. 53-1 pp. 59]. Dornfeld told Lockhart to follow the normal procedure of relaying the proposed termination to 88Sears [ Id. at 59-60], who found the termination " supported" [Doc. 36-5 ex. 29]. Dornfeld acknowledged that it was atypical for him to be consulted before an employee at LeVan's level was terminated [Doc. 53-1 p. 60]. Yet, he states that he believed LeVan's wage complaint to be totally unrelated to his termination, given that defendant had video tape of LeVan violating its policy and consulted with 88Sears regarding the termination [ Id. at 61]. LeVan recalls that when Lockhart told him that he was terminated and LeVan then mentioned laws against retaliation, Lockhart responded that the termination " ha[d] nothing to do with 88Sears," to which LeVan replied: " how did you know about that?" [Doc. 53-4 p. 134].

Defendant terminated four other employees for various violations of the employee discount policy between January 1, 2008, and LeVan's termination [Doc. 36-8]. Defendant also terminated three others for discount policy violations in August and September of 2013, two of which were terminated for executing a transaction with a co-worker's parent using that co-worker's discount card--the same type of transaction for which LeVan was purportedly terminated [Doc. 62-4]. LeVan, however, points out that defendant did not terminate Marc Rubin (" Rubin" ), who rang up a sale to fellow employee Jennifer Slagle's (" Slagle" ) brother with Slagle's employee discount card in 2009, and Hembree, whose employee identification number Marrero used in some of the transactions with his parents on the same day as LeVan's transaction with his parents [Doc. 53]. Slagle was fired as a result of the transaction involving Rubin [ Id. ]. Hembree gave Marrero his number because Marrero allegedly wanted to help boost Hembree's sales numbers [Doc. 53-11 pp. 11-12, 26-27, Doc. 53-12 pp. 90-91]. Despite the fact that LeVan was fired for being a part of a transaction that violated defendant's policy, Hembree was never interviewed by management about possible collusion or complicity in Marrero's violations, and defendant never investigated his involvement [Doc. 53-12 pp. 91-93]. Hudson apparently assumed that Hembree was not involved because he did not actually execute the transactions [ Id. ], though Hudson assumed that LeVan executed the transaction for Marrero to help out a friend [Doc. 53-3 p. 69].

Defendant responds by noting that these situations are inapposite because Hembree did not actually ring up the sale using his identification number, and, unlike LeVan, Rubin questioned the proprietary of the transaction, reasonably believed he had permission from superiors to execute the transaction because Slagle told him as much, and immediately reported the transaction to his superiors [Docs. 62, 62-5]. LeVan notes that there is no documentation that Rubin did these things and attempts to impeach the veracity of this claim by noting that defendant did not terminate Slagle for 20 days, which LeVan characterizes as " odd," if Rubin immediately reported the incident [Docs. 53, 68]. LeVan also submits that defendant had not disclosed the Rubin and Hembree incidents at the time of LeVan's deposition [Doc. 68].

LeVan also cites Brabson's deposition, in which she stated that in her past experience with defendant, defendant's management had " [gone] after" employees that it wanted to terminate [Doc. 53-6 pp. 83-84]. In further support of both plaintiffs' retaliation

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claims, Hill stated that the three employees that she knows have called 88Sears have all been terminated [Doc. 53-9 pp. 27-28]. Thus, Hill has concluded that she " will never call 88Sears" because she is " terrified" that she " will lose [her] job" and avers that " [n]obody on the floor will call [88Sears]" [ Id. at 44].

In sum, defendant argues that LeVan cannot point to a similarly situated employee who was not terminated for LeVan's violation of defendant's policy [Doc. 37], while LeVan contends that the Rubin and Hembree cases are examples of such. LeVan alleges that his termination violated the antiretaliation provision of the Fair Labor Standards Act (" FLSA" ), 29 U.S.C. § 215(a)(3), and the Tennessee Public Protection Act's (" TPPA" ) retaliatory discharge provision, Tenn. Code Ann. § 50-1-304. LeVan also contends that his termination gives rise to a cause of action for common law retaliatory discharge under Tennessee law. The basis of these allegations is that defendant's purported reason for terminating him is pretextual for its actual reason--retaliation for LeVan's complaints regarding defendant's wage policy.

3. Sims's Complaints

Plaintiff Daryl Sims (" Sims" ), whose causes of action arise out of a very similar set of facts and time frame as LeVan's, was also employed as a Consultative Sales Associate at defendant's West Town store and, just like LeVan, was paid based on his " draw vs. commission" numbers. [Docs. 39, 54]. Sims was employed at the West Town store in this capacity beginning in February 2007 [Doc. 38-1 p. 57]. Thus, many of the aforementioned facts and allegations are also relevant to Sims's case. The last year of his employment with defendant, Sims's average weekly gross pay equated to an average hourly rate of $18.43 to $22.46 [ Id. at 101-02]. Like LeVan, Sims questioned the legality of defendant's pay practices as to non-selling activities, and he complained to Brabson on several occasions leading up to June 2011 [Doc. 54-7 pp. 173-74]. Then, on approximately June 11, 2011, Sims, along with LeVan and other " co-workers," protested to Brabson, citing the 88Sears material LeVan had printed off of the 88Sears website [Doc. 54]. This was the aforementioned meeting after which Brabson notified Lockhart of the complaints. When Lockhart returned, he allegedly made the aforementioned comment to several employees, " I come back, 88Sears is involved, I guess we're hiring," though Sims did not witness this statement [Doc. 54-1 p. 44].

Shortly after hearing reports of Lockhart's statement from other employees, and after talking with LeVan and two other employees, Sims made an anonymous complaint about defendant's pay practices to the 88Sears hotline [Doc. 38-1 pp. 164-65]. Later, he provided his name to 88Sears in exchange for the promise that Dornfeld would conduct a confidential investigation [ Id. at 165]. This complaint prompted Umesh Patel (" Patel" ) of 88Sears to call Dornfeld and ask him to investigate a concern at the West Town store [Doc. 54-1 pp. 21, 24-25]. Patel also e-mailed Dornfeld a list of employees that he should interview relating to the concern, which included Sims [ Id. at 25]. Dornfeld avers that he interviewed these employees [ Id. ], and Sims confirms that Dornfeld interviewed him at a company meeting [Doc. 54-7 p. 166-67]. Sims also submits that despite the ...

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