Sex Discrimination Victim's Counsel Achieve Changes in Company's Personnel Policies

Law Reporter
Association of Trial Lawyers of America

Wilfong v. Rent-A-Center, Inc., U.S. Dist. Ct., S.D. Ill., No. 00-CV-680-DRH, Oct. 4,2002.

Claudine Wilfong, 36, managed a rent-to-own appliance store in Arnold, Missouri. Renters Choice, Inc., acquired her store and approximately 1,400 others and began operating them as Rent-A-Center stores in 1998. Wilfong noticed that the company's atmosphere changed markedly immediately after the takeover. Managers told women - but not men - that they would have to deliver heavy appliances by themselves rather than in pairs, and demanded that female employees clean restrooms because, they said, "It's women's work." When her supervisor ordered Wilfong to fire a female employee on a pretense, she refused, and quit her job.

Wilfong compared a company directory published before the merger with one published several months after the merger. She noticed that nearly all the women managers in the first directory did not appear in the later directory. In fact, nearly half of the women employed by Rent-A-Center left within two years of the merger.

Wilfong consulted with ATLA members Mary Anne Sedey and Jon Ray of Sedey & Ray in St. Louis, Missouri. They sought the assistance of another ATLA member, Jerome Schlichter, of Schlichter Bogard & Denton, in St. Louis.

The three attorneys filed a lawsuit against Rent-A-Center in August 2000. Wilfong and 26 other named plaintiffs represented a class of past and present female employees and women who had applied for employment with Rent-A-Center. Wilfong and her co-plaintiffs alleged that Rent-A-Center had created and enforced a company-wide policy of intentional sex discrimination. As one example, plaintiffs cited a weight-lifting requirement implemented after the acquisition-that was allegedly designed to eliminate female job candidates. The plaintiffs also alleged Rent-ACenter's top executives had tolerated sexual harassment of female employees.

Over 300 class members submitted sworn declarations in which they testified to sexist statements made by Rent-A-Center executives. The company's chairman was quoted as saying, "A woman's place is not in my stores," and "Get rid of women any way you can." Its president was quoted as saying, "Women should be home taking care of their husbands and children, chained to a stove, not working in my stores." Plaintiffs collected almost two hundred similar statements by Rent-A-Center executives.

The day before the Wilfong plaintiffs filed their motion for class certification, two plaintiffs in another sex discrimination suit against Rent-A-Center filed a motion for approval of a nationwide settlement. Rent-A-Center stipulated to naming them representatives of a settlement-only class. The classes in the two cases were essentially identical; however, a nationwide notice to plaintiffs did not mention the Wilfong suit, nor did the notice explain that the recipients had the right to opt out of the other class. The proposed settlement amount was $12.25 million.

Sedey, Ray, and Schlichter undertook a tremendous effort to notify the class members about the Wilfong suit and their right to to opt out of the other suit. They hired 28 staff attorneys and, in a three-month period, expended over 15,000 hours of attorney and paralegal time to communicate with the class. As a result, almost 1,000 class members opted out of the other proposed settlement.

On March 5,2002, the other attorneys announced settlement. had reached a tentative settlement with Rent-A-Center, providing for a cash payment to the class of $47 million.

Judge David R Herndon, who later approved the settlement, wrote, "Class counsel's herculean effort and commitment of resources to defeat [the other settlement] was unprecedented ... This is the only national employment discrimination class action which, while facing the prospect of approval of an inferior settlement, defeated it and achieved a dramatically larger and more comprehensive one."

Under the settlement, Rent-A-Center agreed to make permanent changes in its operations. Within the 15 months following the settlement, 10 percent of Rent-A-Center's job vacancies are to be filled by class members. Rent-A-Center has created a human resources department-none had existed since 1998-and staffed it with a professional human resources manager. The company will establish a toll-free telephone number for reporting discrimination, and create a videotape featuring the company's new CEO and president in which the executives will acknowledge past problems with sex discrimination and stress that Rent-A-Center will not tolerate discrimination and harassment in the future. In addition, the company has eliminated the weight-lifting requirement. "In effect, defendant will be creating a new corporate culture," wrote Judge Herndon.

The total economic value of the settlement, including the monetary relief, is estimated at $115 million. In the view of the plaintiffs and their attorneys, however, the settlement's true significance is its routing of the sexist attitudes that held sway at Rent-A-Center for years.

Plaintiffs' experts were David West Peterson, statistics, Raleigh, North Carolina, and Barry Goldstein, employment discrimination litigation, Oakland, California.

Defendant's expert was James E. Misner, kinesiology, Urbana, Illinois.

The court had allowed the U.S. Equal Employment Opportunity Commission (EEOC) to intervene on behalf of the plaintiffs. EEOC Supervisory Attorney Donna Harper declared that in 20 years of practice, she had never observed a class action that had been more thoroughly prepared and developed by class counsel.

Quoting another jurist, Judge Herndon described counsel's efforts this way: "It is an example of advocacy at its highest and noblest purpose, and class counsel has accomplished a great public good."