Age-Bias Lawsuits Against K Mart On The Rise
Robert Yepsen was fresh out of Ohio's Bowling Green State University in 1962 when he started working as a K mart management trainee.
Yepsen advanced steadily and by 1989 was working in California, making more than $100,000 a year, and "on track to be a vice president," he said.
Then he turned 50, and eight months later received the first in a series of demotions that eventually left the father of eight stocking shelves at half his peak pay.
Yepsen, now 56, contends there is a direct link between his 50th birthday and his career slide. He recently filed an age-discrimination lawsuit against K mart Corp. in Los Angeles Superior Court.
He is among at least 23 current and former K mart employees nationwide who have filed lawsuits in the past year charging that the nation's No. 2 retailer waged a systematic program to rid itself of aging, higher-paid employees. Twelve of the suits were filed in the past four months.
PATTERN OF COMPLAINTS
Interviews with dozens of K mart employees across the country, including store managers and district managers, reveal a pattern of similar complaints.
Curtis Williams, 50, a demoted K mart store manager from Georgia, charged in a federal court suit in Atlanta recently that K mart "created a scheme called `20-40-60' that targeted employees with 20 or more years service, 40 or older and earning $60,000 or more."
"They started pressuring everyone who was even close to retirement to get out," Williams said.
K mart officials declined to be interviewed on the pending lawsuits. A spokeswoman strongly denied the company discriminates against older workers.
"The idea that K mart would demote someone based on age is absurd and unsubstantiated," said spokeswoman Mary Lorencz. "That K mart would develop successful managers only to terminate or demote them in the prime of their careers to cut costs is not supported by facts and is ridiculous on its face."
The 23 employees who have filed suit are between the ages of 40 and 65. Nineteen, including Yepsen, are managers who were demoted. Three lost their jobs in an administrative cutback at K mart's Troy, Mich., headquarters. One was a Minneapolis store clerk denied entry into a management training program.
Most charge they were demoted because they were too old and earning too much money. In most cases, the lawsuits charge, they were replaced by younger workers.
The lawsuits ask for unspecified monetary damages, and in most cases, reinstatement to former positions.
Most who are suing charge they were targets of discrimination during the past three years, while K mart battled intensified competition from Target and Wal-Mart. The age-bias complaints also coincide with K mart's $2.3 billion store-modernization program, launched in 1990 to put a fresh face on the chain's 2,460 stores.
OTHERS HAVE FACED SUITS
K mart is entangled in one of the fastest-growing legal issues in the workplace. Last year, 30,000 workers complained to the federal Equal Employment Opportunity Commission about age bias, compared with 17,000 the previous year.
General Motors, Ford, CBS, Sears, Northwest Airlines, Disney and American Express Co. have all been sued for age bias in the past two years.
Employment law specialists contend the increase in age-bias litigation is a by-product of corporate America's restructuring and downsizing movement of the past two years.
"It's economics. Period. Getting rid of older people has become a way of life in American corporate culture," said V. Paul Donnelly, a Detroit attorney.
Donnelly argues that companies looking to avoid costly retirement and medical benefits are now phasing out workers at a younger age.
"The magic number used to be 55; now it's 40," Donnelly said.
MORE COMING FORWARD
The pace of lawsuits against K mart has accelerated in recent weeks, as publicity has spread. Among those who have come forward with an age-bias lawsuit is Alan Kresge, a demoted store manager from Kentucky and a distant relative of K mart founder Sebastian Kresge.
Mitchell Taper was 47 and a K mart store manager in Raleigh, N.C., when he was demoted in 1991 to associate manager.
Taper, whose salary was cut to $27,000 from $48,500 and who still works for the chain, has taken a night job at McDonald's.
"I feel like I let my family down," said Taper, who is suing the company.
Williams, a former store manager from Canton, Ga., started with the company in 1959, cleaning grease traps in the grill of a Cincinnati Kresge store for 75 cents an hour. He first managed a store in 1968.
Williams, who has no college degree, won awards, joined civic organizations and trained dozens of store managers during his career, he said.
"I gave all I had, every day, 100 percent of the time," Williams said.
The company gave back. In 1989, Williams was manager of a large suburban Atlanta store and earning more than $100,000 a year.
Despite winning four customer-care awards - a top honor at K mart - and increasing store profits by $500,000 in 1991, Williams was demoted to associate store manager in March 1992, his lawsuit charges. His salary was cut to $27,000, according to the lawsuit.
Williams had two negative job reviews before he was demoted, he said. Criticisms included lack of technical skills and high shoplifting losses.
Quitting wasn't an option, said Williams, who has more than 31 years with the chain.
"I have a family and bills. I didn't know this was going to happen," he said. "I can't retire until I'm 55. I have to survive with this chain 4 1/2 years and they know that."
ACTIONS AGAINST OTHERS
Some who are suing say they suspected age discrimination because they had been asked to involve themselves in such actions against other K mart employees.
Yepsen and two other K mart managers in the Los Angeles area said they were given lists of higher-paid employees, who were mostly older staffers, and asked to monitor their productivity and limit their hours.
"I knew what they were doing to me, because I had been told to do it to other people," Yepsen said.
Before his last demotion, Yepsen received a string of negative performance reviews, even though sales at his store had increased, he said. Nearly every aspect of his performance, from store volume to merchandise presentation, was criticized, Yepsen said.
The primary complaint was that he had failed to stem shoplifting losses at the urban store, Yepsen said.
In May 1991, a month after winning a gold ring for having one of the most profitable stores in the Los Angeles area, his supervisor told him he would again be demoted, this time to an associate manager's job in a store two hours from his home, Yepsen said.
His new duties involved mainly stocking shelves. He went home and put a pistol to his head.
"I thought, `This is so easy, all I have to do is apply just a little bit of pressure (to the trigger) and it will be all over,' " he said.
Bruce Scheuermann's widow, Kathy, said her husband did the same thing after losing his K mart job - only he pulled the trigger.
Last October - one day after being fired as a K mart store manager - her husband dropped their teenaged daughter at a skating rink near their North Carolina home, went to Woolworth's and bought a shotgun and shells, and then drove to a rural road and killed himself. He was 47.
Kathy Scheuermann said her husband was told by supervisors who fired him: "Maybe you should apply at Wal-Mart. They like older store managers."
Scheuermann, who had transferred seven times in 17 years with K mart and dreamed of advancing to headquarters, would not consider working anywhere else, his wife said.
"K mart was his family. He ate, breathed and slept K mart," she said.
K mart officials declined to be interviewed about Scheuermann's suicide. Spokeswoman Lorencz said nothing K mart did could be linked to the suicide deaths of any employee.
FILING PROCEDURE
Yepsen and others have filed complaints with the Equal Employment Opportunity Commission, the federal agency designed to assure fair hiring and employment practices.
Under the federal Age Discrimination in Employment Act of 1967, employees over 40 are protected from job discrimination and can bring their own age-bias lawsuits. Plaintiffs must first file a complaint with the EEOC or state agencies.
"All of the individuals (suing) previously filed claims with the EEOC," said K mart spokeswoman Lorencz. "In each case that went to final determination, the EEOC found `no probable cause' that K mart engaged in age discrimination."
The EEOC did file an age-bias lawsuit against K mart in October in U.S. District Court in Minneapolis. The suit charges that K mart denied 44-year-old store clerk Dennis Novotny entry into its store-management program because of his age.
When Novotny complained, K mart "retaliated against him by reducing his performance rating and annual salary increase," the lawsuit charges.
Reuben Daniels, the EEOC attorney handling the case, said Novotny contends he was told K mart prefers managers "fresh out of college."
COPING PROBLEMS
Some K mart managers complaining of age-bias report having difficulty coping after their employment problems began.
Yepsen had a nervous breakdown after his demotion and was forced to take a medical leave from K mart, he and his physician say. Yepsen eventually lost his house, and is draining his savings to survive, he said.
He spends much of his time talking to other demoted K mart managers. But he misses the kinship of his father, a K mart store manager who retired in 1970 after 42 years with the chain.
"This hurt me, in his eyes," Yepsen said. "He thinks I've done something wrong. He doesn't understand how the company has changed."
Yepsen and his wife are living on a boat without a kitchen or bathroom in Ventura Harbor, north of Los Angeles. They cook on a hot plate and use the marina's restroom.
The K mart awards for service and profitability received during his 30-year career are tucked away in boxes, in storage with other belongings.
"I don't want to be reminded," he said.
"I fought the battles for this company. I made it what it was. Then they decide they've gotten all they're going to get out of me and they tear me down to save money."