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Rosalind Norman v. Kmart Corporation

August 26, 2011


The opinion of the court was delivered by: Judge Munley


Before the court are plaintiff's objections to the report and recommendation of Magistrate Judge Malachy E. Mannion, which proposes that the court grant defendants' motion for summary judgment.


This case arises out of Plaintiff Rosalind Norman's employment with Defendants Kmart Corporation ("Kmart"). Plaintiff alleges that she was terminated in violation of the Age Discrimination in Employment Act ("ADEA") and Title VII of the Civil Rights Act of 1964 ("Title VII").

Plaintiff began working for Kmart in October 1984 as a part-time filler, charged with stocking shelves. (Defendants' Statement of Material Facts (hereinafter "Defendants' Statement") (Doc. 42) at ¶¶ 1-2). Kmart promoted plaintiff to manager of their store in Berwick, Pennsylvania in 2000. (Id. at ¶ 3). Later, she transferred to the Wilkes-Barre, Pennsylvania store, where she also served as manager. (Id.).

In May 2005, Michael Houde, Kmart's District Loss Prevention Manager, and Gary Ector, Kmart's District Coach, were made aware that plaintiff had been directing employees*fn1 to work off the clock and then arranged for those workers to be paid with cash vouchers and personal time. (Id. at ¶ 4). In this context, "working off the clock" means that an employee who is required to punch into a time clock fails to do so but works anyway. (Id. at ¶ 5). That employee works without having his or her time recorded. (Id.). Kmart's policy forbids any work off the clock. (Id. at ¶ 6).

With these allegations in hand, Houde, Ector and District Trainer Sherri Ellis began an investigation of plaintiff's actions. (Id. at ¶ 7). They discovered that plaintiff had paid employees with cash vouchers for performing tasks they performed off the clock, such as painting and cleaning the store's grease trap. (Id. at ¶ 8). Plaintiff contends that such jobs were not part of these employees' normal duties, and thus not performed off the clock. (Plaintiff's Statement of Material Facts (hereinafter "Plaintiff's Statement") (Doc. 47) at ¶ 8). Moreover, plaintiff insists, she paid these workers from her own pocket. (Id.).

A cash voucher is a document that shows cash has been paid from the store. (Defendants' Statement at ¶ 9). George Weitz, a Kmart employee, admitted to investigators that he had worked off the clock at plaintiff's request and had been paid with cash and vouchers. (Id. at ¶ 10).*fn2 Plaintiff admits that she paid Weitz by voucher for cleaning the grease trap. (Id. at ¶ 11). The parties dispute whether Weitz was working off the clock when he cleaned the grease trap. (Id. at ¶ 12; Plaintiff's Statement at ¶ 12). Plaintiff also paid Weitz and C.J. White, other Kmart employees, with vouchers for work they did. (Defendants' Statement at ¶ 13). The parties dispute whether this work should be considered work "off the clock," since painting was not normally part of their jobs. (Id.; Plaintiff's Stataetment at ¶ 13). The parties have the same dispute about employees paid with vouchers for painting work done in the store. (Defendants' Statement at ¶ 14; Plaintiff's Statement at ¶ 14). Plaintiff regularly used such practices, but plaintiff insists she did not consider them improper or an example of working off the clock. (Defendants' Statement at ¶ 15; Plaintiff's Statement at ¶ 15). Plaintiff signed a handwritten statement on July 5, 2005 and submitted a typewritten statement on July 6, 2005 admitting to paying employees with cash and vouchers for performing various jobs. (Defendants' Statement at ¶¶ 16-17). Plaintiff insists that she did not admit to paying these workers for work off the clock, since she did not consider what they did to be working off the clock. (Plaintiff's Statement at ¶¶ 16-18). Company policies forbid paying workers with vouchers and forbid paying employees to work off the clock. (Defendants' Statement at ¶ 19).

Kmart investigators concluded that plaintiff permitted employees to work while off the clock in violation of company policy and paid them by means that also violated the company's rules. (Id. at ¶ 20). As part of their investigation, Kmart's staff interviewed Donna Tomko, an hourly worker. (Id. at ¶ 21). She informed the investigators that she had worked off the clock and was paid with personal time. (Id.). Tomko had been promised a four-hour bonus for working in this way. (Id. at ¶ 22). Surveillance footage from the store confirmed that Tomko worked on days when she did not punch into the time clock. (Id. at ¶ 23). Several other employees interviewed confirmed that they had been paid with personal time for work off the clock. (Id. at ¶ 24).

After obtaining this information from store employees, the investigators interviewed Donna Bogart, the store's human resources manager. (Id. at ¶ 25). Bogart told them that she and plaintiff had responded to budget cuts by discussing what could be done to meet the store's payroll requirements. (Id. at 26). She and plaintiff decided to pay workers with personal time to work off the clock rather than charge that time to the store's payroll account. (Id. at ¶ 27). Bogart clocked in personal days for eight different workers on days those employees worked off the clock. (Id.). She then clocked in those workers on days where they did not work to make up for lost vacation days. (Id. at ¶ 28). Those employees who worked off the clock kept track of their own hours. (Id. at ¶ 29). Plaintiff told Bogart to engage in these payroll practices. (Id. at ¶ 31).

Houde, Ector and Ellis interviewed plaintiff on July 5, 2005. (Id. at ¶ 33). Plaintiff admitted that she knew Bogart had manipulated time cards as described above, and admitted that she had "probably" asked employees to work off the clock "'a couple of times.'" (Id. at ¶ 34). Plaintiff also admitted that she and Bogart had a practice of giving employees personal time equivalent to the hours they worked off the clock. (Id. at ¶ 36). Plaintiff also described a practice of hours given to employees who worked off the clock were reimbursed by being punched in and out while they were off work. (Id. at ¶ 37).

After the investigators completed their work, Chris Jemo, Kmart's Director of Field Human Resources, reviewed the investigatory file and recommended that plaintiff's employment be terminated for violations of company policy. (Id. at ¶ 42). Ector also recommended that plaintiff be fired because she severely violated company policy. (Id. at ¶ 43). Kmart terminated plaintiff's employment on July 8, 2005, citing "numerous and varying violations of defendants' policies." (Id. at ¶ 44).

Portions of Kmart's company policies address the violations plaintiff allegedly committed. Kmart's Code of Conduct specifically prohibits working off the clock. (Id. at ¶ 45). That Code also forbids forging or altering any document or filing "'false, fictitious or misleading entries or reports.'" (Id. at ¶ 46). The violation of this provision is punishable by termination. (Id.). Kmart's Management Integrity Statement provides that "'[f]alsifying refunds or cash vouchers, records or reports'" constitutes a violation of company policy, and warns that "'NO SECOND CHANCES'" will be provided. (Id. at ¶ 47). Likewise, the company's Policy on Integrity and Conflict of Interest prohibits "FALSIFYING STORE RECORDS OR REPORTS" and provides that "'no second chances'" will be given for such violations. (Id. at ¶ 48). The company's employee handbook also forbids improper records of time records. (Id. at ¶ 49). Kmart's Payroll Administration memo makes it the store manager's responsibility to ensure that store, state, and federal payroll regulations are followed. (Id. at ¶ 50). Company policy also requires that hourly workers use a punch clock at the beginning and end of shifts to record their hours. (Id. at ¶ 51). As store manager, plaintiff had responsibility for seeing that these policies were followed. (Id. at ¶ 56). Kmart's investigation determined that plaintiff violated these policies, and Kmart terminated her employment. (Id. at ¶¶ 62-63).

Kmart hired Frank Mussich to replace plaintiff. (Id. at ¶ 65). Mussich is far older than plaintiff. (Id.). After Mussich left the store, defendants replaced Mussich with Theresa Williams, who is nine years younger than plaintiff. (Id. at ¶ 66; Plaintiff's Statement at ¶ 65).

Plaintiff filed the instant complaint on December 6, 2007. (Doc. 1). She filed an amended complaint on April 29, 2008. (Doc. 8). The parties engaged in discovery. At the close of discovery, defendants filed the instant motion. The magistrate judge then issued a report and recommendation which proposed that the court grant the motion for summary judgment. The plaintiff objects and filed a brief in support of those objections, bringing the case to its present posture. Jurisdiction

As this case is brought pursuant to the Age Discrimination in Employment Act, 29 U.S.C. §621(a) and Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e-2(a), the court has jurisdiction under 28 U.S.C. § 1331 ("The district courts shall have original jurisdiction of all civil ...

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