Paying the price: events at Rent-A-Center prove that when employers don't respect HR today, they'll pay tomorrow - Cover Story - includes related article on learning from mistakes - Statistical Data Included

HR Magazine, August, 2002 by Robert J. Grossman

Mary Anne Sedey, partner at Sedey & Ray in St. Louis and plaintiff's lawyer in one of the cases, requested human resource documents during the pre-trial disclosure. She was astounded by the results. "They sent us a loose-leaf notebook in August 1999 with a tab that said 'personnel,' but there was nothing, not one sheet of paper, behind the tab," she recalls. "At first, I thought they were kidding."

Sedey says it became obvious that Talley's disregard for HR was a major cause of his undoing. "People were told that 'Every manager is an HR manager, go up the line if you have a problem.' Talk to the same people who were told by the boss to get rid of you. It was like asking the fox to guard the chicken coop."

The plaintiffs, through documents and oral testimony, introduced evidence to substantiate their claims of discrimination. Ultimately, on Dec. 27, 2001, U.S. District Judge David R. Herndon of the Southern District of Illinois granted class-action status to plaintiffs in the case of Wilfong et al. and EEOC v. Rent-A-Center.

Quoting from depositions of more than 300 company officials and employees in 47 states, Herndon noted that witnesses repeatedly cited statements made not only by Talley, but by other company executives and store managers as well, that articulated Rent-A-Center's "anti-female policy." Attributed to Talley:

* "A woman's place is not in my stores."

* "Women don't belong in rent-to-own."

* "Get rid of women any way you can."

* "Women should be home taking care of their husbands and children, chained to a stove, not working in my stores."

Statements attributed to company officers, vice presidents, regional directors, marketing managers and store managers included the following:

* "In case you didn't notice, we do not employ women."

* "I regularly throw away women's applications."

* "The day I hire a woman will be a cold day in hell."

* "You can do the vacuuming because that's a woman's job."

Observes Donna Harper, supervisory trial attorney for the EEOC's St. Louis office, "I've never seen a case in which so many women and men tell the same kind of stories all across the country. It's remarkable."

Sedey says the allegations against Rent-A-Center were "extraordinary," the worst she's seen in 26 years of practice. "This was systematic, intentional discrimination against women in every aspect of the company's operations mandated by the top officers of the corporations."

Changing Course

Faced with an onslaught of outrageous allegations that were indefensible if true, Rent-A-Center tried to fight back, claiming correctly that no actual findings of fact had been made as to the validity of any of the statements. But it was too late. No one was listening.

In October, Talley retired and passed the reins of the company to CEO Mark Speese and President Mitch Fadel. The new team quickly entered negotiations and agreed to settle the cases for $12.25 million. After challenges by the EEOC, plaintiffs in the Wilfong case and the National Organization for Women Foundation, the judge rejected the deal as being too paltry. The company went back to the table, this time agreeing in March to a payout of $47 million.