I love the names companies use to label the mandatory arbitration programs they impose on their employees. Today, we can enjoy the workings of the “Fairness in Action Program” used by the Dillard’s Department Store chain.
In July, 2001, Stephanie Brown was one of a number of workers who were summoned to a supervisor’s office. They were told that Dillard’s was starting the “Dillard’s Fairness in Action Program” which they were accepting by continuing to work. As the brochure describing the program said: ” …the Fairness in Action Program assures that each party gets a fair deal – that’s what justice is about, after all.” Each worker, however, had to sign the “agreement.”
So then, one of Stephanie’s co-workers asked to take the “agreement” home with her to discuss it with her parents. The supervisor, exemplifying “fairness in action” from the get-go, told her she might be fired if she did not sign the form immediately. Naturally, they all signed up.
The Dillard’s concept of “fairness” reared its head in a number of places in this store. For example, employees were required to clock in and out, but when the computer was (often) down paper time sheets were used. Evening shift employees like Stephanie, who were scheduled to leave at 9:15 p.m., were required to stay until the store was fully cleaned. If cleaning took until, say, 9:45, they were required to falsify their time sheets showing they left on schedule – so Dillard’s could avoid overtime pay.
In May, 2002, on a day she was not scheduled, she was asked to work for another employee who was sick. She was told not to report before 6 p.m., because otherwise she qualified for overtime, which Dillard’s did not want to pay. She said, and produced corroborating evidence, that she had clocked in at 5:58. Store officials, alleging that the computer had not worked properly, called her in the next day to fill out a paper time sheet. When she did, the store manager told her she was being immediately terminated for falsifying her time, stating that she had actually arrived at 6:10. She was sympathetically advised “people like you cost the company money.” When she began to cry, the store manager reminded her “you already got another job, right?” (Which was true – she was saving money to attend air traffic control school.)
Feeling she was wrongfully terminated, Stephanie filed her arbitration claim. Dillard’s, evidencing its superior knowledge of “what justice is about, after all,” decided that her claim “had no merit” and refused to participate in its own arbitration program. Her repeated attempts to contact Dillard’s were useless. After almost one year of no progress, she filed her lawsuit in state court. Incredibly, Dillard’s required her to go to federal court and moved to compel arbitration.
Shortly before Christmas, 2005, after Dillard’s had lost in the trial court, Ms. Brown received, at least, a modicum of procedural justice in action. The appellate court, correctly analyzing Dillard’s tactics, noted that if Dillard’s succeeded it would “set up a perverse incentive scheme.” Employers would have an “incentive” to refuse to participate hoping the employee would get frustrated and drop the effort. And, refusal would carry no cost because if the employee filed a lawsuit, then the employer could move to compel arbitration.
Three and one-half years later Stephanie Brown can pursue her state court lawsuit. As the appellate court aptly found: “Many people in Brown’s position would simply have given up.” I would hope that other courts, if confronted in the future with this tactic, more severely punish such a hypocritical company. At the minimum, the CEO should have to write, 1000 times on the blackboard, what the “Fairness in Action Program” assures. That would provide a bit of justice.