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Bell v. American Greetings Corp.

May 29, 2007


The opinion of the court was delivered by: Wm. R.Wilson,Jr. United States District Judge


Plaintiffs brought suit against their employer, American Greetings Corporation, alleging that they were discriminated against based on their race, sex, and age in violation of Title XII, 42 U.S.C. § 1981, Arkansas Civil Rights Act ("ACRA"),*fn1 and the Age Discrimination in Employment Act ("ADEA").*fn2 The sex discrimination claims and several of the Plaintiffs have since been dismissed. Pending is Defendant's Motion for Summary Judgment on the remaining claims and remaining Plaintiffs (Doc. No. 127).

I. Background*fn3

Defendant American Greetings Corporation is a foreign corporation organized under the laws of the state of Ohio and is qualified to do business in the state of Arkansas. Defendant's principal place of business is Osceola, Arkansas, where it manufactures and distributes seasonal greeting cards and related products. Approximately 1,250 individuals are employed at the Osceola facility.

Plaintiffs are all citizens and residents of the state of Arkansas; and are former employees of American Greetings' Osceola facility. Due to the seasonal nature of manufacturing at Defendant's Osceola plant, the company created something called "company convenience." This is a voluntary layoff that correlates with down swings in production, which allows Defendant to maintain its trained work force and allows its employees to draw unemployment benefits for a maximum of 8-10 weeks although they are technically still employed by Defendant. At any time during company convenience, Defendant can call an employee to help with production for a day or more. Defendant provides the Arkansas Employment Security Division ("AESD") with a list of employees taking company convenience along with the tentative dates of layoff. However, if an employee is called to work during company convenience time, it is the employee's responsibility to notify the AESD.

In 2002, American Greetings began dismissing a large group of its hourly employees. Approximately 120 out of 1,100 employees were dismissed. Defendant asserts that these dismissals were the result of a thorough investigation on its part -- after prompting by the AESD -- of employees improperly claiming unemployment compensation for periods in which they were actually working. Plaintiffs allege that the investigation was a pretext -- a mask for dismissals driven by illegal discrimination on the basis of sex, race, and disability. Moreover, Plaintiffs suggest that the timing of the terminations for alleged unemployment fraud was suspicious, coming just months after Defendant announced that it would begin a "restructuring" of the plant.

In March 2002, Defendant discovered that one of its hourly employees had repeatedly failed to report all of her earnings to the AESD when filing for unemployment benefits. After the discovery, Defendant contacted its third party administrator for unemployment claims, and learned that he had not been monitoring unemployment claims for under reporting. Basically, Defendant and the AESD discovered that employees were fraudulently claiming unemployment benefits while simultaneously working for Defendant.

The discovery prompted Defendant to investigate all 1,180 employees who had taken company convenience or non-scheduled time off during the previous three years. Defendant maintains that when under-reporting was discovered, the employee was fired regardless of length of service, race, age, or sex. Defendant further maintains that it fired these employees in compliance with its written policy prohibiting misrepresentation, dishonesty, and unauthorized altering or falsification of company records.

Of the 122 employees terminated, four employees were able to prove the under-reporting was caused by clerical errors made by Defendant, and they were reinstated. Every termination was conducted by Frank Richardson, a white male, who worked for Defendant as a human resource manager.

In an April 27, 2005 Order, the sex discrimination claims of Group I Plaintiffs,*fn4 Plaintiff Michael Fletcher's Title VII claim, and the Title VII and ADEA claims of all Group II and Group III Plaintiffs were dismissed.*fn5 A September 11, 2006 Order dismissed Plaintiffs LaKresha Johnson and Kim Whitted for failing to appear for depositions.*fn6 Plaintiffs Sherry Wilson, Veronica Bogan, and William Guy were similarly dismissed on October 3, 2006.*fn7 Summary judgment has been entered against two individual Plaintiffs, Constance Swanigan*fn8 and Walter Taylor.*fn9 The remaining claims are as follows: Group I has ADEA, ACRA, Title VII, and § 1981; Group II and III have § 1981.

II. Standard of Review

Summary judgment is appropriate only when there is no genuine issue of material fact, so that the dispute may be decided on purely legal grounds.*fn10 The Supreme Court has established guidelines to assist trial courts in determining whether this standard has been met:

The inquiry performed is the threshold inquiry of determining whether there is the need for a trial -- whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.*fn11

The Court of Appeals for the Eighth Circuit has cautioned that summary judgment is an extreme remedy that should only be granted when the movant has established a right to the judgment beyond controversy.*fn12 Nevertheless, summary judgment promotes judicial economy by preventing trial when no genuine issue of fact remains.*fn13 This Court must view the facts in the light most favorable to the party opposing the motion.*fn14 ...

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