When Wal-Mart decided to fire one of its managers for alleged
misconduct, it probably thought it was an open-and-shut case. But as we
all know, every termination carries risks.
Background
Kenneth Cooper, who is African
American, started working as the manager of a Wal-Mart store in Silver
City, New Mexico, in 1998. In 2005, the company received an anonymous
call on its ethics hot line. The caller alleged misconduct by Cooper.
After Wal-Mart investigators interviewed more than 20 employees and
examined dozens of pages of documents, they gave Senior Vice President
Michael Moore a written report reflecting their findings. In turn,
Moore ordered Cooper’s direct supervisor, Andrade, to fire him.
Investigation
The investigation found that
Cooper violated the company’s conflict-of-interest policy by traveling
as the only management employee with an otherwise all-female group of
hourly employees on an overnight trip to a Wal-Mart distribution center
in Arizona. To make matters worse, when some of the group returned to
Silver City, Cooper and several others went shopping in Tucson and
spent another night “on the company’s dollar.” Apparently, not only
did Cooper charge Wal-Mart for the meals and hotel rooms for the extra
night, but he also let the employees who participated in the shopping
junket claim eight hours on their time sheets for that day.
And there was more. The investigation also found evidence that
Cooper was showing favoritism toward a particular female subordinate.
Among other things, he awarded her a $250 gift card, put items on
layaway for her in his name, and increased her pay substantially more
than others in her position. According to the investigation report,
another employee observed him visiting her home several times for up to
30 minutes each time. He then offered to remove a disciplinary action
from the file of the employee who saw him if she agreed not to tell
anyone he was seen leaving the favored woman’s neighborhood.
The investigation revealed a host of other transgressions, including accusations that Cooper:
- threatened employees with retaliation if they reported any of his
transgressions to his boss or to the company’s loss prevention
department;
- made sexually suggestive comments during store meetings;
- demoted an employee without following the standard disciplinary procedure;
- gave $25 gift cards to employees who danced with him at a company party; and
- directly billed Wal-Mart for his wife’s hotel room.
Cooper’s exit interview form stated that his termination was based
on “Gross Misconduct — Integrity Issue,” which was defined on the form
to include misappropriation of company assets. In addition to writing a
response disagreeing with the reasons given for his discharge, Cooper
reported allegations of misconduct against other Wal-Mart employees.
Again, there was an investigation — this time into Cooper’s allegations
— and again, Moore was given a written report of the findings. Based on
the report, Moore decided who would be disciplined and to what extent.
Even though it seemed as if Wal-Mart had the goods on him, Cooper filed
a race discrimination lawsuit.
So what were the potential problems in what looked like an open-and-shut case for Wal-Mart?
Cooper counterattacks
First, Cooper complained
there was evidence disputing the findings in the investigative report
regarding his misconduct. For example, he presented evidence showing
that the remarks he made (or supposedly made) at store meetings were
not intended to be (or taken as) sexually suggestive. Since no
complaints were ever made to his supervisor about the remarks, he was
able to show that employees were not offended by the comments.
Cooper presented evidence disproving the accusation that he exceeded
his authority as store manager by raising the salary of his purported
“favorite” and showing that the $250 gift card he gave her was approved
by Andrade. In addition, he showed that he hadn’t directly billed
Wal-Mart for his wife’s hotel room but that he had given cash to
another Wal-Mart employee to pay the bill. Cooper argued that the
factual inaccuracies were so “fishy and suspicious,” they cast doubt on
all the other reasons for his termination. Evidence that Wal-Mart’s
stated reasons for his termination were false could show that the
stated reasons for the discharge were actually a pretext for race
discrimination.
Next, Cooper argued that Wal-Mart’s reasons for his termination were
a pretext for race discrimination because he was treated differently
than other non-African American employees who also violated company
policy. In comparing the decisions Moore made in Cooper’s investigation
to the decisions he made in the investigation of other store managers,
Cooper alleged disparate treatment. None of the other store managers
was fired, as Cooper had been, although Moore did demote at least one
manager in connection with his investigation.
Finally, Cooper argued there were procedural irregularities in the
investigation and the way his termination was handled that could
convince a jury he was terminated because of his race. He specifically
relied on Wal-Mart’s progressive discipline policy, its “Respect for
the Individual” policy, and its “Open Door” policy to argue that the
firing was tainted, mainly because he wasn’t asked for his side of the
story before Moore made the decision to let him go.
Court struggles
The federal appeals court
wrestled with Cooper’s position. Factual errors in an investigation
can, in some cases, point to discrimination. The court was also
troubled to learn that other employees who violated policies received
less severe discipline. Finally, Wal-Mart’s departure from its own
investigation and disciplinary policies caused the appeals court to
scrutinize the situation. Ultimately, the trial court’s decision in
favor of the employer was upheld — but not without some close calls. Cooper v. Wal-Mart Stores, Inc., Case No. 07-2290 (10th Cir., 10/16/08).
Conclusion
In the end, Wal-Mart prevailed. But
Moore — and all employers — can take the following lessons from this
experience for future employee terminations:
- Be sure that investigators don’t overstate their findings and that
the information relied on by the decisionmaker is accurate. If there
are doubts about some of the allegations, don’t use them as part of the
reason for termination.
- Know the details of how other employees who have had similar
policy violations have been treated. If they weren’t terminated,
confirm that their offenses were less serious or that they were not
similarly situated to the employee in question for other reasons.
- Before making any decision, review your policies and past
practices. If your policies have mandatory procedures, follow them to
the letter. Even if your policies are discretionary but you have always
handled investigations and separations in a certain way, don’t change
what you have done in the past without good — and documented — business
reasons.
Consider this case a cautionary tale: There is no such thing as an open-and-shut case when it comes to firing an employee.
The author can be reached at elizabeth.wood@mcafeetaft.com.