Marshall v. JC Penney Co., Inc., C73-530.
| Decision Date | 18 January 1979 |
| Docket Number | No. C73-530.,C73-530. |
| Parties | Ray MARSHALL, Secretary of Labor, United States Department of Labor, Plaintiff, v. J. C. PENNEY COMPANY, INC., Defendant. |
| Court | U.S. District Court — Northern District of Ohio |
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Ralph D. York, U. S. Dept. of Labor, Nashville, Tenn., Edith Barnett, U. S. Dept. of Labor, Washington, D. C., Linda L. Leasure, U. S. Dept. of Labor, Cleveland, Ohio, for plaintiff.
James C. Sennett, Jr., Thomas E. Fennell, Jones, Day, Reavis & Pogue, Cleveland, Ohio, John G. Mann, Jr., J. C. Penney Co., Inc., New York City, for defendant.
The Secretary of Labor brought this action on May 24, 1973, pursuant to Section 17 of the Fair Labor Standards Act of 1938 (), alleging that the defendant J. C. Penney Company, Inc., violated the Act's equal pay provisions (29 U.S.C. § 206(d)) by maintaining an unlawful wage differential at its Great Lakes Mall, Mentor, Ohio store between certain of its men and women employees. The Secretary seeks back wages for female salespersons, department heads, and a seamstress at the Great Lakes Mall store for the period from May 24, 1970 to the present, and an injunction against the company enjoining future violations of the equal pay provisions of the Fair Labor Standards Act at all J. C. Penney stores nationwide. This Court has jurisdiction under 29 U.S.C. Sec. 217.
The case was tried to the Court sitting without a jury on various dates between March 29, 1977 and November 4, 1977. The Court, having considered the record in this case, including the pleadings, the out-of-court testimony, and oral testimony in court, the exhibits introduced by both parties, the statements of counsel, and all the files, records, and proceedings herein, does hereby make and enter its Findings of Fact and Conclusions of Law and Order for Judgment as follows, in accordance with Rule 52 of the Federal Rules of Civil Procedure.
1. Defendant, J. C. Penney Co., Inc., is a Delaware corporation qualified to do business in Ohio and is engaged in the operation of a nationwide chain of approximately 1700 stores, including the Mentor Store. The parties agree that the defendant is an enterprise engaged in commerce within the meaning of sections 3(r) and 3(s)(1) of the Act, and that it is an employer having employees subject to section 6 of the Act.
Penney's corporate executive offices and headquarters are located in New York, New York. The New York headquarters supervises the activities of the Penney Company's retail stores through five regional administrative subdivisions, with headquarters in Pittsburgh, Pennsylvania; Atlanta, Georgia; Dallas, Texas; Rolling Meadows, Illinois; and Buena Park, California. The Mentor store is located in the Eastern region, with headquarters in Pittsburgh, Pennsylvania.
2. There are six types of J. C. Penney Stores: (1) softline or M.A.P. (merchandise assistance planning); (2) soft line; (3) limited line (food); (4) limited line (checkout); (5) limited line; and (6) full line. The Penney store at Mentor is a full line store, which means that it carries a relatively complete assortment of merchandise sold by the company, specifically including deliverable lines such as home electronics, tires, batteries, and automotive equipment. The same job descriptions, prepared at national headquarters, are applicable to every store in the company. The particular jobs in existence in any one store will depend on several factors, including the store's volume of business.
3. For the purposes of this lawsuit, the Mentor Store is the "establishment" within which jobs and wages are being compared. 29 C.F.R. § 779.23. The Secretary did not submit or offer any evidence respecting any other single establishment in the Penney chain apart from certain "snap shot" statistics dealing collectively with all Penney stores nationwide regardless of the size or type of store and the positions used therein.
4. The J. C. Penney's New York headquarters closely regulates the operation of its 1700 odd stores by issuing policy and procedure manuals and bulletins. Little deviation is permitted without the prior approval of officials of the regional or national headquarters, and an audit of each of the stores, at least once a year, reviews every phase of store operations, including personnel matters.
5. The Penney Company has been aware of the applicability of the Fair Labor Standards Act and its equal pay provisions to its operations for the time period pertinent to this lawsuit. Local stores are instructed how to comply with the FLSA, including its equal pay provisions. Since 1961, local store managers have been forbidden to settle alleged FLSA violations independently; any such alleged violations must be negotiated through the New York headquarters which will direct store managers to raise wages which are in violation of the Act if necessary.
New York headquarters has also issued to the local stores through the Digest of Personnel laws its views of which jobs in the stores are equal within the meaning of the Equal Pay Act and has represented to the local stores that compliance with the pay scales and job classifications issued by New York headquarters will result in compliance with the Equal Pay Act. It appears that on the national level, Penney has made a good faith effort to comport with requirements of the Act.
The Associate Solicitor of Labor advised the Company in 1970 that as to the then current job classifications for salespersons, the Department did not feel they would be relied upon as evidence of compliance with the Equal Pay Act. See, however, Findings of Fact 40-43, infra.
6. Prior to 1971, the Mentor store classified all salespersons, both male and female, in three classifications, as either "salespersons" (since redesignated "customer assistants") position code 021; "head salespersons" (since redesignated "merchandising assistants") position code 242; or "Selling Specialist A" (position code 077). (The 077 position is not under comparison in this lawsuit.) In late 1971, the Mentor Store added a fourth classification of salesperson, the "Selling Specialist B" (position code 076). The 021, 242, and 076 salespersons are paid a flat hourly rate and no commissions, except for the salespersons in cosmetics who are classified as 021 or 242, and who receive a 5% commission on their sales in addition to their base hourly pay.
The range of hourly wages for these three classifications is set by "The Schedule of Hourly Rate Structures," (Plaintiff's Exhibit 8). This schedule divides the Penney hourly rated work force into 10 labor grades, called position levels, which provide for progressively higher over-lapping pay ranges. The 021 positions are in grade 1, which, as of August 1977, was assigned a rate range from $2.40 to $3.12 per hour; the 242 positions are in Labor Grade IV, which was assigned a range of from $2.91 to $3.99 per hour; and the 076 positions are in Labor Grade VI, which was assigned a range of from $3.39 to $4.71 per hour. The Penney company claims that the 076 positions require greater skill, effort, and responsibility than the 021 and 242 positions, thus justifying their higher pay.
7. Certain selling areas1 in the store, referred to herein as "021 areas," are authorized to use only the lower-paid 021 and 242 selling positions; other selling areas, referred to as "076 areas," are authorized to use the higher paid 076 position in addition to the 021 position. Some persons classified as 021 sell in the 076 areas. Defendant claims that these salespersons are "in training" for the 076 position.
The Secretary claims that the work required of persons in all these job classifications is substantially equal within the meaning of the Act because its performance requires substantially equal skill, effort, and responsibility and it is performed under similar working conditions in the following fourteen selling or merchandise areas at the store.2
8. Both males and females are hired into each of the job classifications. There is evident a greater...
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