The Issue Whether Respondent discriminated against Petitioner because of a handicap.
Findings Of Fact Sometime in July 2002, Petitioner was hired by Respondent as a Store Clerk (now known as a Sales Associate) at Store No. 3727 in Panama City, Florida. On March 1, 2003, Petitioner was promoted to Lead Sales Associate. Sometime around December 2005, Petitioner was diagnosed with absolute glaucoma and cataracts. As a result of her deteriorating eyesight, Petitioner asked the Store’s Manager, Michaelene Mellor, to be reassigned to her earlier Sales Associate position. Although there was some conflict in the evidence on whether Petitioner was reassigned as a “store stocker,” the better evidence demonstrated that Dollar General did not have a formal position known as a “store stocker.” Dollar General did have a position known as a “Sales Associate.” The Sales Associate position consisted of a variety of duties. Essential to the position were the following: assist in setting and maintaining planograms and programs; build merchandise displays; operate a cash register; itemize and total a customer’s purchase; collect payment from a customer and make change; operate a handheld scanner; and assist with ordering merchandise and maintaining inventory in the store. Planograms are shelving strips that contain shelf tags. They are the method that employees use to place merchandise in the store and on the shelves. They also help in inventory control. Petitioner was reassigned by Ms. Mellor. Her primary duties were to stock the store by using the planograms and shelf tags. Ms. Mellor advised the District Manager about the reassignment. However, she did not inform the District Manager that Petitioner would primarily be limited to stocking the store. Under Ms. Mellor’s tenure as Store Manager, Store 3727 was not properly managed. The store was dirty, had incorrect or out-of-date signage, incomplete or nonexistent planograms, merchandise on the floor and blocking the aisles, and a high incidence of inventory loss. Because of these problems, Ms. Mellor was terminated in October 2006. That same month, Thomas Rector became the Store Manager. His goal was to bring the store into compliance with Dollar General’s operation policies and to reduce the store’s inventory loss. At the time Mr. Rector took over Store 3727, the store had 4 positions and 7 employees allotted to it. The positions were Store Manager, Assistant Store Manager, Lead Sales Associate and Sales Associate. Each store was allotted a specific number of labor hours, excluding the hours worked by the manager, to cover the hours the store is open for business. Because Store 3727 had only 7 employees, only two or three employees worked during any given shift. With so few employees to cover each shift, it was essential that all employees be able to perform all the duties of the position that they filled. In this case, it was essential that Petitioner be able to read a scanner, run the cash register, make change, read a planogram, read a shelf tag, locate merchandise and stock merchandise. For the next several months, Mr. Rector observed that Petitioner could not clock herself in or out of work. More importantly, he observed that Petitioner had difficulties in stocking merchandise in the proper place. He observed that other employees had to sometimes help Petitioner with stocking. Improperly stocked items caused inventory control problems, increased the labor hours used by the store because time was required to correctly place store items and could result in lost revenue due to improper pricing. He also observed that she had trouble reading the scanner, the planograms and shelf tags. Based on his observations, Mr. Rector concluded that Petitioner could not fulfill the duties of a Sales Associate. He contacted the District Manager, Joe Peebles, and advised him that Petitioner could not perform the duties of a Sales Associate. On June 6, 2007, Mr. Peebles met with Petitioner. He read her the list of duties that a Sales Associate must perform and asked her if she felt she could perform those duties. Those duties are outlined above. Petitioner admitted she had difficulty with reading a planogram and operating a cash register. Likewise at the hearing, Petitioner admitted and demonstrated that she could not accurately read a planogram or shelf tag. She admitted she could not build a merchandise display, could not operate a cash register and could not make change for a customer. The evidence was clear that Petitioner could not perform the essential functions of a Sales Associate. Eventually, Petitioner was placed on leave and was told that, if her vision did not improve, she would be terminated. At no time did Petitioner ask for or identify any reasonable accommodation that could be made by Respondent to enable her to perform her duties as a Sales Associate and the evidence did not reveal that any such accommodations existed or were available. Ultimately, Petitioner was terminated because she could not perform the duties of a Sales Associate. The evidence did not demonstrate that her termination was discriminatory or the reasons given for her termination were pretextual. Finally, the evidence did not demonstrate that Petitioner’s vision impairment could be reasonably accommodated. Given these facts, Petitioner’s Petition for Relief should be dismissed.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: The Florida Commission on Human Relations enter a final order dismissing the Petition for Relief. DONE AND ENTERED this 9th day of January, 2009, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 9th day of January, 2009. COPIES FURNISHED: Larry Kranert, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Jean Marie Downing, Esquire 221 Thomas Drive Panama City Beach, Florida 32408 Alva L. Cross, Esquire 2300 SunTrust Financial Centre 401 East Jackson Street Tampa, Florida 33602
The Issue Whether the intended termination under that Notice of Termination of the Dealer Sales and Service Agreement, dated December 7, 2010, between Respondent Nissan North America, Inc., and Petitioner Hampton Automotive Group, Inc., d/b/a Hampton Nissan, is unfair or prohibited within the meaning of section 320.641, Florida Statutes.
Findings Of Fact Hampton is a “motor vehicle dealer,” as defined by section 320.60(11)(a), Florida Statutes. Nissan is a “licensee” as defined by section 320.60(8). Nissan does not sell cars directly to consumers in the state of Florida. Rather, it relies on its dealers to market and sell its vehicles to consumers. Hampton Automotive Group, Inc., purchased the Nissan dealership in Fort Walton Beach, Florida, on August 4, 1998, and entered into a Dealer Sales and Service Agreement with Nissan (Dealer Agreement). Mark Hampton is the 100 percent owner of Hampton.1/ The Dealer Agreement is a “franchise agreement” as defined by section 320.60(1). The Dealer Agreement, like other Dealer Sales and Service Agreements that Nissan enters with its dealers, contains several provisions designed to ensure that Hampton achieves and maintains sufficient levels of sales performance. Section 3 of the Dealer Agreement entitled “Vehicle Sales Responsibilities of Dealer,” sets forth Hampton's obligations with respect to the sale of vehicles. Section 3A sets forth the general sales obligation of Hampton, which is to “actively and effectively promote through its own advertising and sales promotion activities the sale at retail (and if Dealer elects, the leasing and rental) of Nissan Vehicles to customers located within the Dealer’s Primary Market Area.” Article Second, Section B outlines the same general obligation. Section 3B of the Dealer Agreement provides that “performance of [Hampton's] sales responsibility for Nissan Cars and Nissan Trucks will be evaluated by [Nissan] on the basis of such reasonable criteria as [Nissan] may develop from time to time.” This provision allows Nissan to evaluate Hampton's sales performance using any method, so long as it is reasonable. The Dealer Agreement contains specific examples of reasonable criteria that Nissan may use to evaluate sales performance. Although the Agreement does not restrict Nissan to the listed examples, Nissan uses sales penetration, which is “Dealer’s sales as a percentage of registrations of competitive vehicles,” as an example of reasonable criteria in section 3(B)(2)(ii). Section 3(B)(3) of the Dealer Agreement also specifies the region benchmark to which a dealer’s sales penetration is compared, stating that a dealer’s sales penetration may be compared to the “sales and/or registrations of all other Authorized Nissan Dealers combined in Seller’s Sales Region.” As permitted by section 3 of the Dealer Agreement, Nissan uses Retail Sales Effectiveness (RSE) to determine whether a dealer is meeting its sales obligation under the Agreement. RSE is calculated by first determining the dealer’s sales penetration or market share, which is the dealer’s total new Nissan vehicle sales anywhere, divided by the number of competitive new vehicles registered in the dealer’s Primary Market Area (PMA). The resulting number is expressed as a percentage to show the dealer’s sales penetration. The dealer’s sales penetration is then compared as a ratio to the sales penetration of the entire Nissan region, to determine the dealer’s RSE. A simple expression of the RSE formula is: Dealer’s Sales Penetration ÷ Region Sales Penetration. Breaking down each of these into their component parts, the RSE calculation would be: (Dealer’s sales anywhere ÷ Competitive Registrations in the Dealer’s PMA)÷(Combined Sales of all Region Dealers ÷ Competitive Registrations in the Region) A dealer who reaches 100 percent RSE is performing at an average level, which is a “C” level of performance. Although the terminology and calculations may vary slightly, RSE or sales penetration is the industry standard method used to measure dealer sales performance. RSE is a fair method of evaluating dealer performance with conservative expectations because no dealer is expected to perform above an average level and because the dealer gets credit for sales anywhere, while only being held responsible for the sales opportunities within its PMA. Approximately 60 percent of dealers in the Nissan's Southeast Region, within which Hampton is located, meet or exceed the “average” sales penetration of 100 percent RSE. Nissan has been using RSE as its standard to measure dealer sales performance for over 30 years. This evaluation method is communicated to dealers not only in the Dealer Agreement, but also in contacts and visits with the dealer and correspondence. Hampton’s owner admits that he knew Nissan was evaluating the dealership’s sales performance using RSE. RSE is a reasonable criterion to measure dealer sales performance and it was reasonable for Nissan to evaluate Hampton's sales performance using RSE. At the Final Hearing, Hampton argued that it should be evaluated based on market penetration rather than sales penetration. Market penetration is the ratio of Nissan registrations in a dealer’s PMA, no matter what dealer sold the vehicle, to competitive registrations in the PMA, which is then compared to Region average. Because market penetration looks at registrations in the market by any dealer, it does not measure the efforts or sales performance of the dealer in the market. Using market penetration as a measure artificially increases the perception of the sales effectiveness of an underperforming dealer because that dealer would get credit for sales made by other dealers through no effort of the underperforming dealer. Using the market penetration calculation, a dealer could sell no vehicles, yet reach 100 percent (or more) of region average base upon sales by other dealers to customers in its PMA. The market penetration within Hampton's PMA for years 2008 through 2010 was higher than Hampton's sales penetration within that PMA, indicating that consumers within Hampton's PMA desired Nissan’s products, but not so much from Hampton. Neither Nissan nor any other manufacturer uses market penetration to measure the sales performance of a dealer. Market penetration is not a reasonable criterion to measure Hampton's performance under the Dealer Agreement. Section 3H of the Dealer Agreement provides that Nissan will “periodically evaluate” Dealer’s performance of its sales responsibilities and discuss these evaluations with the dealer. The dealer agrees to correct any deficiencies. Nissan evaluates its dealers and provides feedback on their performance in several ways. First, Nissan has District Operations Managers (DOMs) who call on dealers routinely to discuss various areas of performance, and to review reports that outline the dealer's RSE performance and other information pertinent to dealer operations. Various department and training managers from Nissan may also assist a dealer. Nissan's senior management often notifies a dealer of violations of the Dealer Agreement, including poor sales performance. Nissan DOMs have extensive industry experience and have had the opportunity to work with top-performing dealers, as well as poor-performing dealers. DOMs provide advice and counsel and share best practices with dealers on things that can impact sales, including items such as customer service, product training, inventory management, and other areas. DOMs also share data with dealers to help identify areas of opportunity to grow and improve. Nissan counseled with Hampton and its owner for a number of years regarding Hampton's poor sales performance and operational deficiencies prior to the December 2010 Notice of Termination. Since becoming a Nissan dealer in 1998, Hampton has performed poorly from a sales perspective. In 2002 and 2003, Nissan issued several notices of default to Hampton based on their unsatisfactory sales performance and related operational deficiencies. On November 3, 2003, Nissan issued Hampton a notice of termination for poor sales performance. Around the same time, Nissan conducted a nationwide audit of dealer PMAs. As part of that audit, Nissan instituted a new rule limiting the size of a PMA to 25 miles. As a result of this new rule, Hampton’s PMA was reduced in size. Because Hampton was responsible for a smaller area, its sales penetration increased to 80 percent of average. Although this performance was still poor because it was 20 percent less than average, it was not among the worst in the state, and Nissan withdrew the NOT. After Nissan withdrew its NOT, Hampton’s operations did not change, and its RSE drifted back towards the bottom of the state, even in its reduced PMA. For the next few years, Nissan continued counseling with Hampton regarding its declining sales penetration, poor customer service scores, lack of training for its employees, and other problems at the dealership. During this time, Hampton experienced significant management turnover. Article Fourth of the Dealer Agreement, stresses the importance of "qualified management" for the dealer and requires Hampton to provide a qualified executive manager with "full managerial authority for [Hampton's operations], . . . [who] shall continually provide his or her personal services in operating the dealership and [who] will be physically present at the Dealership Facilities." The lack of a qualified executive manager was an ongoing problem at Hampton. Nissan continuously counseled with Hampton concerning this issue. Ben Bondi was the last approved executive manager at the dealership.2/ Following his departure in 2005, Hampton had a number of managers in a few short years. In mid-2005, after Ben Bondi was let go, Carl Roscitti became general manager for about five months. By November 2005, Mr. Roscitti was gone, and Rick Himmel was the manager for two months. Following Mr. Himmel's departure, in February 2006, Al Brockette served as manager for about three months. Alan Reese replaced him for three months beginning in April 2006. Brent Joy took over for Mr. Reese in August 2006 for a month. In September 2006, Tom Buckley took over for two or three months. None of these individuals were provided with the level of authority or decision-making ability expected of an executive manager. Throughout this period of management turnover, Hampton’s sales performance was declining. By the end of 2006, Hampton’s RSE, even in its new PMA, had fallen to 75.41 percent, which ranked it 132/154 dealers in the Southeast Region, 50/58 dealers in the State of Florida, and last among the 15 dealers in Hampton’s district. In 2007, Rusty Chambers and Jeff Kagan served as the management team at Hampton. Although neither of these individuals served as executive manager, they provided some consistency at the dealership, and they had more authority than prior managers. Operations improved somewhat under their management. For the first time in its history, Hampton reached region average in 2007, at 102.7 percent. In February 2008, after reaching region average RSE in 2007, Mr. Hampton intentionally put his dealership on finance credit hold so it could not order any more vehicles. This cancelled all vehicle orders and prevented the dealership from purchasing inventory. By taking this action, Hampton not only reduced its present inventory, but also lowered its sales rate, impacting future allocations. Upon learning that Hampton was on finance hold, Nissan notified Mr. Hampton of the drastic impact this would have on sales performance, incentives, and future allocations. During a meeting with the DOM, Mr. Hampton said that he had too much inventory and that he planned to force his sales staff to sell what they had before ordering any more. On March 6, 2008, with the finance hold still in place, Nissan personnel sent a letter to Hampton and met with its owner to discuss the situation. Although the flooring line had been suspended for over a month, the owner said he “planned to leave [the suspension] in place and force the staff to sell what they currently had available.” When told that this was a violation of the Dealer Agreement, Mr. Hampton stated that “he did not care about the agreement because Nissan had already tried to get him once and they could not get him.” Having a dealership put itself on finance hold is extremely unusual, and Nissan personnel had never seen any other dealership take this type of action. Even Hampton’s own expert agreed he would not recommend it. This operational decision had a direct impact on Hampton’s sales performance in 2008 and beyond. After Hampton put itself on finance hold, its inventory dropped from 160 vehicles to 60, and its sales penetration began to drop immediately. By mid-2008, Mr. Hampton had fired the management team of Rusty Chambers and Jeff Kagan, and the management turnover resumed. Following their departure, Ralph Harris served as sales manager at the store, and there was no executive or general manager. Nissan continued to counsel with Hampton throughout 2008 concerning sales performance, the lack of an executive manager, and operational deficiencies. During meetings with the dealership, the DOM reviewed empirical data and discussed areas of opportunity for the dealership. Rather than discussing ways to implement the suggestions and improve performance, Hampton’s owner accused the DOM of being critical, and would try to change the subject to irrelevant matters whenever the DOM asked a challenging question about dealership operations. Hampton’s performance continued to decline. In July 2008, Nissan’s DOM contacted Hampton’s owner to discuss the dramatic drop in sales, poor customer service performance, and what steps the dealership planned to take to turn the business around. Rather than provide an action plan, Mr. Hampton stated that he had nothing further to discuss and did not see the point of meeting with the DOM. At this point, Mr. Hampton decided he no longer wanted to meet with the DOM or Nissan personnel to discuss dealership business, despite the negative impact this could have on sales performance. By October 2008, the dealership had no executive manager, general manager, sales manager or finance and inventory manager. On several occasions, Nissan personnel attempted unsuccessfully to contact Mr. Hampton to discuss the situation. At the end of October, Carl Stark took over as sales manager at Hampton. Although he claimed to have authority over the store’s operations, he was not an executive manager. He did not have authority over parts, service, pay plans, advertising budget, used vehicle appraisals, or many other facets of the dealership operations. From October 2008 to May 2010, Mr. Stark remained the sales manager, but there was no general manager, executive manager or even an executive manager candidate at Hampton. Although he promoted Mr. Stark and left him in a management position for an extended period of time, Mr. Hampton said he was not effective and was “extremely slow.” By the end of 2008, Hampton’s RSE had dropped to 67.1 percent, which ranked 140/155 dealers in the Southeast Region and 53/58 dealers in the State of Florida. On January 14, 2009, Nissan’s Region Vice President sent a letter to Hampton expressing concern at the declining RSE performance, and asking him to submit a plan for improvement. No plan was ever submitted. Throughout 2009, Mr. Hampton refused to meet with the Nissan DOM, and there was no executive manager at the store. Although Mr. Hampton refused to meet with her, the DOM provided all relevant monthly reports to him by e-mail, expressed concern over the continuing decline in RSE, identified areas of opportunity, suggested best practices that could help the dealership improve, and offered to meet any time to discuss dealership business. Mr. Hampton never responded to any of these overtures. In October 2009, the Region Vice President sent additional letters to Mr. Hampton, expressing concern over the lack of an executive manager at the dealership, the continuing and alarming decline in RSE performance, and the poor owner loyalty that was contributing to this decline. He reminded the dealer of its obligations under the Dealer Agreement and requested that immediate steps be taken to turn things around. By the end of 2009, Hampton’s RSE had dropped to 58.4 percent, which ranked 227/245 dealers in the Region and 56/58 dealers in the State of Florida. In January 2010, Nissan’s fixed operations manager spoke with Mr. Hampton on the phone concerning an available program to help recapture service customers, improve marketing efforts, and increase customer traffic. Mr. Hampton was originally interested in the program, but later called back to decline the program because, according to Mr. Hampton, if it brought in more customers, he would have to hire additional staff, which would drive up expenses. On February 3, 2010, Nick Reese, Nissan’s Area General Manager (AGM), took his whole team to Fort Walton Beach to meet with Mr. Hampton and to express Nissan’s serious concerns over the dealership’s declining RSE and lack of an executive manager. They discussed the dealership’s poor sales performance, now ranked at the bottom of the state, and asked how the dealership planned to improve. Although Mr. Hampton agreed they were not delivering, he would not identify any plan to improve. Instead, he tried to change the subject to some unrelated business deal he was working on and to Hyundai’s launch of a new Sonata. He failed to focus on Nissan sales and expressed no sense of urgency to correct the problems. During this same meeting, Hampton’s sales manager stated that they could not improve sales with the dealership’s existing advertising budget. Advertising was a problem and a major contributor to the lack of traffic at the dealership. Total advertising for the dealership in 2009 had fallen to one-fourth of its 2007 levels –- from over $1 million in 2007 to $242,058 in 2009. Following the meeting, Mr. Reese sent a letter to Hampton concerning the poor RSE and owner loyalty at the store. He asked the dealer to take immediate action to improve, but this was never done. On April 27, 2010, Nissan’s DOM met with Carl Stark, the acting manager, to discuss the continuing decline in RSE, which had fallen to 45.5 percent, 240/244 in the Region and 57/58 in the state. Mr. Stark again expressed concern about the lack of advertising and stated that all advertising was being directed by Mr. Hampton’s staff in Lafayette. On May 4, 2010, Mr. Reese called Mr. Hampton to follow- up on their February meeting. He informed Mr. Hampton that there had been no change in performance, and the dealer would receive a notice of default. During this call, Mr. Hampton admitted he could not manage the store from 300 miles away and stated that it was his entire fault and that he would do the same thing as Nissan since the store is not performing. Mr. Hampton also claimed he had hired a “heavy hitter” to serve as general sales manager and wanted to see if he could turn things around. This new general sales manager never came to work at Hampton in Fort Walton. On May 20, 2010, Nissan issued a notice of default (NOD) to Hampton based on the dealership’s unsatisfactory sales performance and continued lack of an executive manager. The NOD provided Hampton with 180 days to cure the default, and it specifically warned that failure to cure the breaches set forth in the NOD would result in termination. The NOD outlined the many discussions Nissan had with the dealer over the course of several years regarding its declining sales performance, and it outlined numerous operational deficiencies that contributed to this performance, including lack of an executive manager, poor customer service, failure to market and effectively advertise, failure to maintain inventory, and lack of capitalization. Mr. Adcock, Nissan’s Region Vice President, hoped that issuing the NOD would get the dealership’s attention, notify Mr. Hampton of the seriousness of the situation, and give Hampton time to improve performance. By May 2010, when the NOD was issued, Hampton’s RSE had dropped to 47.3 percent, which ranked 56/58 dealers in the state of Florida. On May 22, 2010, Mr. Hampton contacted Mr. Reese to advise him that he hired Kevin Drye as the general manager of Hampton. He acknowledged that the store had been mismanaged and said that Mr. Drye would be his final attempt and, if it did not work out, he was going to sell the store. Mr. Drye lasted about a month as general manager and was gone by mid-June. On June 24, 2010, the DOM met with Mr. Hampton, as Mr. Drye was gone and the store had no general manager. During this contact, the DOM discussed Hampton’s low RSE and the effect that constant management changes, lack of training, minimal advertising, and other operational problems were having on the dealership. Mr. Hampton acknowledged the issues, but did not outline a plan for improvement. On June 28, 2010, Mr. Reese contacted Mr. Hampton and asked about his plans for a manager at the store since Mr. Drye had left. Mr. Hampton stated that he was bringing over a young, aggressive general manager from his Lafayette Toyota store and Nissan would be seeing good things soon. Following this call, Mr. Hampton did not move a general manager to the Fort Walton Beach store for at least two more months. On August 25, 2010, the AGM and DOM again traveled to Fort Walton Beach to meet with Mr. Hampton and discuss the performance problems at the dealership. The cure period was more than halfway over, and there had been no improvement in the Hampton’s sales performance. The AGM advised Mr. Hampton that the NOD would turn into a notice of termination if there was no improvement. Rather than providing a plan to improve, Mr. Hampton responded by stating that Florida is a dealer-friendly state and that Nissan would not terminate him. He showed no intention of trying to improve and no concern about the NOD cure period. Other than claiming that he had hired yet another new general manager, who had not relocated to Fort Walton Beach, Mr. Hampton outlined no plan to improve. On September 3, 2010, Mr. Reese again contacted Mr. Hampton to discuss the RSE and operational problems at the dealership. Rather than discussing dealership business, Mr. Hampton tried to change the subject to talk about unrelated matters. He also stated that he had purchased 100 used Nissans from an auto auction for the dealership to sell. This was a big concern for Nissan, as it would shift the focus of salespeople to used cars, which would not improve Hampton’s RSE. At the time of this contact, the new manager still had not relocated to Fort Walton, and nobody was on-site managing the store. In September 2010, Hampton’s new manager, Don Moyers, finally relocated to Fort Walton Beach, four months into the NOD period. Mr. Moyers, however, was still responsible for the management of Hampton Toyota in Lafayette, and he bounced back and forth between the two stores for the remainder of the NOD cure period. At the Final Hearing, Mr. Moyers described the state of the dealership when he arrived four months into the cure period. He stated that the dealership was disorganized, there was no accountability, they were not following procedures, they lacked training, they lacked leadership, there were no checks and balances, there were no systems in place for traffic control, and they were not consistently counting customers, or doing follow-up calls. He admitted the dealership was performing poorly in all areas –- sales, service, parts, and finance and insurance (F&I). Despite repeated requests from Nissan for several years, Hampton never provided a plan to improve performance or demonstrated a sense of urgency. Mr. Hampton admits that he never called the Nissan's Regional Vice President, never went to meet with him, never responded to any of the letters Nissan wrote during the NOD period, and never prepared any specific plan to address the deficiencies. In fact, Mr. Hampton did not even tell his manager, Mr. Moyers, that the store had been issued an NOD or that the dealership had a limited cure period to improve its sales performance. Based on the continuing poor performance of the store, its lack of improvement and lack of any commitment to improve, Mr. Adcock began the process for requesting a notice of termination. By early December, the cure period had expired, and there had been no improvement in RSE. The dealership’s RSE had declined from 102.7 percent in 2007 to 66.55 percent in 2008, 56.83 percent in 2009, and 49.73 percent through September 2010. This ranked Hampton 56th of the 58 dealers in Florida. From May 2010 to September 2010, RSE had barely changed, from 47 percent to 49 percent. As of early December, Nissan knew Hampton’s sales numbers for October and November, which were 22 and 13 respectively. This was less than half of what the dealer needed to sell to reach region average, and Nissan knew the RSE had actually declined from September to November. The November RSE data confirmed that sales penetration through November 2010 actually declined to 48.5 percent RSE. On December 7, 2010, Mr. Adcock made the final decision that Hampton's dealership should be terminated and Nissan issued a notice of termination (NOT) to Hampton for unsatisfactory sales performance. At trial, neither party disputed that Hampton’s sales performance was extremely poor. However, each party offered different explanations for this poor performance. Hampton argued that the economy, the real estate bubble, and unemployment in Fort Walton Beach caused its poor sales performance. The evidence does not support this. The RSE calculation takes into account the state of the economy in a particular PMA. If the economy slows for any reason in a PMA, it would affect every brand of vehicle, and the competitive registrations would be lower. This would lower the sales expectation for Hampton, as it is only expected to gain an average share of competitive registrations. The unemployment rate in Fort Walton Beach was far lower than the rest of Florida. If rising unemployment did affect RSE, it would impact other Florida dealers in PMAs with higher unemployment rates to a far greater degree than Hampton, thus improving Hampton’s relative performance. That expectation however, did not happen. The unemployment rate in nearby PMAs was much higher than Fort Walton Beach, yet those dealers exceeded region average RSE. This would not occur if the economy and unemployment rate was the cause of Hampton’s low RSE. Hampton’s arguments regarding economic conditions are further undercut by Mr. Hampton’s own statements. In June 2010, he told Mr. Reese there was a lot of growth in the area because it had not been hit by the oil spill and the military base was expanding. Hampton also blamed its poor performance on a large military population in its PMA and the lack of Nissan military incentives. The evidence does not support this. The military population in Fort Walton Beach declined from 2007 to 2010. If a higher military population was hurting Hampton’s RSE, its performance would have improved during this period, but it declined substantially. In addition, Nissan dealers with the largest military populations in their PMAs on average exceeded 100 percent RSE, including other dealers in the Florida Panhandle. Hampton’s own expert stated that the lack of military incentives probably did not have a big effect on Hampton’s sales performance. He further stated that if lack of military incentives were a problem, it would possibly be something that Hampton would want to discuss with a Nissan representative. Hampton, however, never mentioned to Nissan that lack of military incentives was a problem. Hampton also argued at the final hearing that Hampton had 27 competitors in its PMA, which was too many to reach RSE. The evidence does not support this. Hampton did not explain how it managed to reach 102.7 percent of Region average in 2007 despite having 28 competitors at that time. Hampton’s own expert analysis showed that a dealership with 27 competitors in its PMA should be expected to hit 99.6 percent of average, whereas Hampton reached only 48.5 percent through November 2010. Every other Nissan dealership in the entire state of Florida with 27 or more competitors performed at a higher level than Hampton. Dealerships with a similar number of competitors in the Nissan Southeast Region on average reached 110 percent RSE. Hampton also argued that the PMA was not drawn correctly. Hampton’s expert, however, admitted he had no dispute with how the dealership’s PMA is drawn and that he would draw it the same way. Hampton implied that the 2010 census may change the PMA and argued that if Nissan added a dealer in its PMA, this would reduce its size and increase Hampton’s RSE (assuming its sales do not change). Although Hampton’s PMA was reduced after the 2000 census, this was not because of the census results, but because Nissan limited its PMA to a 25-mile radius. There was no evidence that Hampton’s PMA would be significantly altered by the 2010 census. As with other manufacturers, Nissan assigns a PMA primarily based on proximity to the Nissan dealership, because a customer generally will buy from the most convenient dealer. The actual census tract of the population closest to Hampton is larger than the 25-mile radius assigned to Hampton. Because its PMA is smaller than the census tract of the closest population, Hampton’s RSE is enhanced because Hampton can sell into nearby unassigned areas, but Hampton is not held responsible for the competitive registrations within those unassigned areas. If Hampton’s PMA were constructed on a pure proximity of population to dealership basis, including areas beyond the 25-mile limitation, Hampton’s RSE would be even lower. Although Hampton argued that adding a new dealer would reduce the size of its PMA, it never suggested that Nissan add a new dealer, and its expert denied that another dealer was needed in the PMA. To affirm that the PMA definition had no impact on Hampton’s performance, Nissan’s expert analyzed Hampton based on sales by distance, without regard to PMA boundaries. This confirmed that Hampton’s performance was far below that of other Panhandle dealers. In a 0-4-mile radius, Hampton penetrated the market at 38.3 percent RSE versus 112.8 percent for nearby Nissan dealers. The results were similar at 4-8 miles, 8-12 miles, and beyond, confirming that the PMA definition did not cause Hampton’s poor RSE. Hampton further argued that its sales performance was caused by a lack of available inventory and that it did not receive enough vehicles during the cure period to reach 100 percent RSE. This argument ignores the application of Nissan’s uniform allocation system, Hampton’s long history of declining vehicles and reducing inventory levels, and its ability to obtain additional vehicles by working within the allocation system and taking advantage of supplemental vehicles that were available. Nissan’s allocation system is based on the relative "days’ supply" of each dealer, and it fairly and equitably distributes vehicles to the dealers who need them the most. "Days’ supply" is the industry standard measurement of dealership inventory. A dealer’s days’ supply is the number of days their current inventory would last based on their sales rate. For example, if a dealer sells one car per day (30 per month) and has 60 vehicles in inventory, that dealer would have a 60-days’ supply. If the dealer sells 3 cars per day (90 per month) with the same inventory, the dealer would have only a 20-days’ supply. The system is responsive to a dealer’s sales rate and inventory levels. As a dealer increases its sales rate by selling its inventory faster, this also lowers its days’ supply, allowing the dealer to earn more vehicles. Both Hampton’s owner and general manager admitted that Hampton earned vehicles under the allocation system the same as every other dealer. Mr. Hampton also admitted that other dealers have more inventory because they have a higher sales rate and lower days’ supply. Hampton’s claims of insufficient inventory are undercut by its own actions in the timeframe prior to the NOT. For a period of several years, the dealership declined a substantial number of vehicles that it had been allocated. From April 2007 to November 2010, Hampton declined over 1400 vehicles. Hampton’s practice was to decline the majority of product offered and “dealer trade” for what it needed. This strategy was repeatedly invoked by various managers at the dealership, even though Nissan personnel counseled against it because it limited vehicle availability at the dealership. Mr. Hampton admitted it was his strategy, even in 2010, to intentionally keep a low inventory of only the fastest moving vehicles and to dealer trade for any other vehicles. He testified that he does not care how many vehicles are in inventory, as long as they do not have any aged units. This strategy is reflected in the dealership’s pay plan, which reduces the manager’s pay if he orders inventory that does not sell within 90 days. The financial hold to reduce inventory levels which Mr. Hampton instituted at the dealership in 2008 served as a clear demarcation for the dealership’s inventory levels. Hampton’s inventory levels dropped from 120 vehicles to a range of 60-80 vehicles, and its sales rate was soon cut in half. Hampton does not claim that it lacked inventory overall, but claims only that it did not receive enough of certain “hot models” in late 2010. Hampton’s inventory levels in these “hot models,” however, were consistent with the rest of the Southeast Region. In addition, Hampton’s sales were poor in almost every segment, showing that it was not a lack of certain “hot models” that caused its poor sales performance. For example, although it had access to plenty of Titans, Pathfinders, and Armadas, Hampton penetrated those segments at only 64 percent, 33 percent, and 16 percent of region average, respectively. Nissan personnel explained the allocation system in detail to various managers at Hampton over the years. As Nissan personnel explained, the best way to earn more vehicles under the allocation system is to increase the sales rate by selling the vehicles you have faster. During the cure period from May to November 2010, Hampton was offered 166 vehicles in the allocation system, even though it sold only 123. Thus, its inventory on the ground went up during this time period, although its sales penetration did not change. If Hampton had increased its sales rate during the cure period, it would have earned more vehicles under the allocation system. Hampton also had the opportunity to obtain additional vehicles from the “Pass Two” turndown list. “Pass Two” vehicles are specified and equipped by the region with the most popular equipment to sell quickly. If any dealer in the district declines or fails to affirmatively accept any Pass Two vehicles offered in allocation, the DOM offers these to dealers within his district. During the cure period, the DOM offered Hampton first cut at the entire Pass Two turndown list each month before offering them to any other dealer. When the DOM provided the list (often including over 150 vehicles) to Hampton each month, he either got no response or Hampton accepted only a few vehicles. Hampton also suggested that there was a market issue that affected its sales. Hampton argued that, because the successors to two other terminated dealers (Love Nissan and Classic Nissan) performed poorly after termination, this must mean the problems those dealers and Hampton faced were the result of some unidentified market issue, rather than their own operations. The evidence did not support this. Hampton’s expert admitted that he did not analyze the operations of those other two terminated dealerships, and that he could not tell one way or the other whether the performance at those dealerships was based on operational rather than market issues. After the initial final hearing was completed on February 16, 2012, Hampton argued that incentive variations were an additional cause of its poor performance. As a result of that argument and the granting of a motion on that issue filed by Hampton, the record was reopened and the parties were permitted to obtain additional discovery and present additional evidence on this issue, the findings on which are detailed below. Beginning in May 2009, Nissan began to vary incentives offered on a few specific models depending on where the customer resided. On these few select models, customers residing in Florida were offered more favorable lease incentives, and customers residing in the rest of the Southeast Region were offered more favorable purchase incentives. Hampton argued that it was harmed by the incentive variations because Fort Walton Beach has a lower leasing rate than the State of Florida or the Southeast Region as a whole. Hampton’s expert, however, could not quantify the impact, if any, this had on Hampton Nissan’s sales performance, and he did not analyze any PMA other than Fort Walton Beach. Both sales and leases count as a retail transaction for purposes of calculating sales penetration. It is very common in the automobile industry to vary incentive offers based on customer residency. The mere fact that incentive variances existed does not show a negative impact on Hampton or any other dealer. To determine if there was any impact, it is necessary to analyze the sales and registration data. Prior to mid-2009, the incentive programs for customers located in Florida and in the rest of the Southeast Region were identical. Thus, incentive variations did not trigger Hampton’s sales performance decline, which began in 2007 and declined most dramatically from 2007 to 2008. If incentive variations benefited Florida dealers located in areas where leasing was more prevalent, as Hampton argues, Hampton’s sales performance in 2009 would have declined more when compared to the rest of the state than when compared to the Southeast Region. However, Hampton’s sales performance decline is similar regardless of whether a state or region benchmark is used. Sales penetration can be adjusted to account for the leasing rates in a particular area by separating lease and purchase data and adjusting the expectation accordingly. After adjusting for the lower leasing rates in the Fort Walton Beach PMA, Hampton’s sales penetration during the cure period from June through November 2010, was only 45.9 percent of the region average, showing that low leasing rates in the market had very little impact, if any, on Hampton's sales performance. The incentive variations beginning in mid-2009 impacted only four models –- Sentra, Maxima, Rogue, and Murano. Both before and after the incentive variations began, these models accounted for only 25 percent of Hampton’s sales. If the incentive variations had caused Hampton’s poor performance, its sales decline should have been greater in these models, but Hampton’s sales performance decline was consistent among both impacted and non-impacted models. Hampton’s expert testified that advertising better purchase incentives on one model could bring in customers who ultimately purchase a different model. He did not know, however, if this actually happened, and there is no evidence that Hampton changed their advertising in any way based on the available incentives. On a few other models –- Pathfinder, Armada, Z, and Frontier –- a Florida customer was eligible for the same purchase incentive as a customer in the rest of the Region, but also was eligible for a more beneficial lease incentive than customers in the rest of the Region. Because the incentives offered to Florida customers on both lease and purchase were equal to or better than incentives offered outside Florida, the incentives on these models could not have negatively impacted Hampton or any other dealer in Florida. Although industry lease levels in the Fort Walton Beach PMA were lower than the State of Florida as a whole, leasing was more prevalent in Fort Walton Beach than in the other three West Panhandle PMAs –- Panama City, Pensacola, and Marianna (5.9 percent leasing rate compared to 7.1 percent in Fort Walton Beach). If the incentive variations negatively impacted Florida dealers in low leasing areas, these dealers should perform worse than Hampton after the lease variations began, yet all three exceeded region average sales penetration. If the incentives offered to customers in the Fort Walton Beach PMA were uncompetitive because of low leasing preferences, the brand performance in the PMA would have declined after the incentive variations began. However, the data shows that the Nissan brand actually performed better in the Fort Walton Beach PMA after the incentive variations began. While Nissan brand penetration increased in the PMA, Hampton’s contribution declined, meaning that customers in Hampton's PMA were purchasing (or leasing) Nissan vehicles at higher rates, yet not from the Hampton dealership. This reflects an operational problem at the dealership. Ultimately, the leasing rates for a brand in a particular market are impacted by the methodology and sales processes of the dealer in the market. Hampton’s own expert conceded that advertising, dealer operations, sales strategy, pricing, management, sales staff ability, sales training, and the number of sales people influence both sales performance and whether a customer decides to buy or lease a vehicle. Although industry leasing in the Fort Walton Beach PMA was 7.1 percent, Nissan brand leasing was only 5.9 percent. By comparison, Nissan leasing in the other West Panhandle PMAs was 12 percent, more than double the industry-leasing rate. This reflects a lack of effort by Hampton. According to its financial statements, Hampton made only one Nissan lease from 2006-2010. Had it captured the available lease opportunity at the same rate as other district dealers, it would have made an additional 22 to 45 retail transactions per year. Although not asserted as an excuse for its poor performance, Hampton argued that Nissan acted in bad faith because (1) the termination was secretly based on Hampton’s decision not to enroll in Nissan’s facility program; and (2) Nissan offered to provide financial assistance to a potential buyer of the store. The evidence does not support Hampton’s argument. Nissan’s facility program is similar to those used by other manufacturers, and it is voluntary. Nissan offered the program to Hampton, as it did to its other dealers. Nissan's market study suggested that conversion of Hampton to an image facility devoted exclusively to sales of Nissan products would be successful in Hampton's location. Although Nissan recommended that Hampton consider converting to an imaged facility, it was not required. Although it may have contributed to the poor sales performance, Hampton’s decision to decline participation in the facility program had no bearing on the decision to issue the NOD or NOT. Nissan’s offer to provide financial assistance to a potential buyer of the store also does not evidence any bad faith. Mr. Hampton’s own broker referred the potential buyer to Nissan. Prior to engaging in any substantive discussions with this potential buyer, Nissan personnel obtained Mr. Hampton’s permission. The price Mr. Hampton sought for the dealership was very high, and Nissan offered financial assistance to help bridge the gap. This offer would allow Mr. Hampton to get a higher price for his dealership, and provide Nissan with a proven performer. Reasons for Hampton's Poor Performance Lack of Executive Manager It is critically important for a dealership to have an authorized on-site executive manager to provide leadership and direction. Without this, it is difficult for Nissan’s field team to work with anyone at the dealership to help a dealer improve sales. Mr. Hampton admitted that the number one reason for the poor sales performance at the store was his failure to have qualified management on-site. He admitted that he made all the management-hiring decisions and that Nissan sent him many written notifications about the failure to have qualified management at the store. Management turnover and lack of an executive manager was a continuing problem at Hampton. Hampton had between 10-12 general managers or management candidates from 2006-2010. Even when the dealership had someone serving as general manager, he did not have the authority of an executive manager. Most dealership decisions and functions were run out of Hampton’s headquarters in Lafayette, including accounts payable, parts and service statements, payroll, financial statements, inventory logging, and floorplan redemptions. The team in Lafayette also made the decisions regarding all manager pay plans and most employee pay plans, set the advertising budget, and re- appraised every used vehicle traded in at the dealership. A number of Hampton’s managers expressed frustration over their lack of authority over the dealership operations, with everything being controlled out of Lafayette and their hands being tied regarding advertising, vehicle appraisals, and other day-to- day operational issues. At the Final Hearing, Hampton argued that the lack of an executive manager at the dealership was Nissan’s fault because they did not help Hampton hire a good executive manager. However, Nissan had no system to identify or recommend potential employees for its dealers, who are independent businesses responsible for making their own hiring and firing decisions. Capitalization Mr. Hampton is the 100 percent owner of Hampton Automotive Group and 13 other entities. The Hampton organization pulled significant amounts of money out of the Fort Walton Beach dealership through owner’s salary, institutional advertising (which consisted of “talent fees” paid to Mr. Hampton to star in commercials), outside services, rent, and management fees. In these five categories alone, $6.3 million was pulled out of the dealership’s balance sheet in five years. Hampton argued that the removal of capital was irrelevant because there was money available for the dealership from the Hampton organization. Even if this money was available, it was never invested in the dealership. The financial statements reveal that, because of various “costs” paid to the Hampton organization, the Fort Walton Beach store lost over $1 million per year in 2008 and 2009. In addition, the Fort Walton Beach dealership lost capital by paying off millions of dollars in loans to other Hampton entities in 2008-2010, further lowering its capital levels. These losses and the withdrawal of capital correlate to the declining sales performance at the dealership. In meetings with Nissan, Mr. Hampton stated that he kept the dealership because he personally made $10 million from it in five years. He also stated that owners’ salaries, management fees, institutional advertising, and other entries on the financial statement were “fluff that went directly to him,” and that, although the dealership showed a loss, it provided him with plenty of profit. (c) Advertising In 2006 and 2007, the dealership spent over $1 million on advertising. In 2008, Hampton cut its advertising budget in half, to $526,355. In 2009, Hampton cut its advertising budget in half again, to $242,058. Despite the issuance of an NOD, Hampton’s advertising expenditures remained low in 2010, at $284,430. During this same time period, sales performance steadily declined, from 102.7 percent in 2007 to 67.1 percent in 2008, to 58.4 percent in 2009, to 48.5 percent through November 2010. While the dealership advertising was cut in half in 2008 and again in 2009, the owners’ salary stayed consistent at $480,000. There is a direct correlation between investment in advertising and sales volume. The less a dealership advertises, the less traffic it attracts, and the less it sells. Nissan DOMs noted that advertising was a major problem at the dealership and the limited ad budget hurt the dealership’s sales performance. Even in 2010, Hampton’s managers complained that their “options were limited based on [the] meager advertising budget” and their “hands are tied due to the limit[ed] amount of resources allocated to advertise in the community.” Though advertising had been cut by 75 percent from 2007 levels, Hampton did not increase its advertising budget during the NOD period. Several experts analyzed Hampton’s advertising trend and noticed the same decline on a relative basis that is reflected on an actual basis in the financial statements. On a per-new-unit (vehicle) basis, advertising dropped from an above average $500- $600 per unit in 2006-2008 to 20 percent below average at less than $400 per unit in 2009-2010. Hampton also spent less of its gross profit to advertise than other dealers in the region. Hampton’s advertising per expected sale fell from a high of $620 in 2007 to $263 in 2010. d) Sales Staff From 2007 to 2010, Hampton cut its sales staff in half, from 13 in 2007 to 6 in 2010. Hampton’s general manager testified that, when he arrived in August 2010, they only had seven salespeople, and they needed 10 just based on the traffic they had at that time. The pay plan for managers discouraged hiring salespeople by lowering management pay if salesperson compensation increased. Successful dealers have a trained and certified sales staff, as product knowledge is a key element in selling. Hampton failed to have training programs in place and failed to take advantage of Nissan’s offers of training. Hampton refused to send any of its staff to off-site training offered by Nissan. Hampton’s own manager admitted that sales personnel lacked sufficient training as late as August 2010. Other than in 2007, when Hampton performed at average, the dealership lacked a sales force that was dedicated to the Nissan brand. Having a dedicated sales staff can make a great impact on sales performance, as they have better product knowledge and are vested in the sale of Nissan products. At the Final Hearing, Mr. Hampton testified that one of the reasons Nissan sales suffered is that the sales force focused more on Hyundai sales. (e) Lack of Focus on Sales Performance At the Final Hearing, Mr. Hampton admitted that he was focused on personal profitability rather than sales numbers or adequate representation of the Nissan brand. He testified that he was proud of how the dealership performed in 2007-2010 because it was profitable, despite its poor sales performance. Hampton's pay plan for General Managers was not based on sales performance, but instead on gross profit, even during the NOD period. In addition, salespeople at Hampton are paid based on gross profit, and they had no incentive to focus on a particular brand, even during the NOD period. Hampton did not take advantage of programs and incentives offered to improve sales performance. The dealership never participated in any tactical incentive programs offered by Nissan, which provide employees with trips, cash, and other incentives directly from Nissan to help drive sales. Mr. Hampton advised his staff not to try to hit retro bonuses, which provide a great monetary incentive to make a certain number of sales. He decided that making the sales necessary to hit a retro would just open them up to an audit. Hampton was one of only two or three dealers in the entire region that refused to participate in a truck retro where Nissan offered up to $10,000 in incentives on each Titan sale. Nissan’s Treatment of Other Dealers Section 12(B)(1) of the Dealer Agreement allows Nissan to terminate the Agreement if a dealer fails to substantially fulfill its sales responsibilities. Due to the complexities involved, Nissan evaluates potential dealer terminations on a case-by-case basis. Both Hampton’s expert and Nissan’s expert agreed that it would be unreasonable to apply a bright-line test for termination, because circumstances affecting sales penetration must be considered. Consistent with this opinion, Nissan first considers the dealer’s sales penetration and then reviews any circumstances that might affect sales penetration or warrant delaying the termination. Nissan does not terminate every dealer who falls below 100 percent RSE, because a dealer that is just slightly below average would not considered to be in substantial and material breach of the Dealer Agreement. Nissan’s starting point for considering a sales performance termination is the dealer’s RSE, and those dealers near the bottom of the state in terms of performance may be considered in substantial breach warranting termination. Next, in making the determination of whether to issue a notice of default or termination, Nissan considers the materiality of the RSE deficiency, the ranking among other dealers in the state, the effectiveness and turnover in management, ineffective or insufficient advertising, and other factors that might contribute to the success or failure of a dealer. Nissan also considers whether the dealer has come forth with a meaningful plan to improve and turn things around. Each of these factors is applied consistently and uniformly to any dealer facing potential termination. After considering Hampton’s extremely poor performance, its steady decline in RSE, its long history of management turnover and operational deficiencies that continued during the NOD period, and its lack of a plan or even a willingness to take the steps necessary to improve, Nissan determined it was necessary and appropriate to terminate Hampton. Hampton’s counsel specifically identified three other dealers that he believed must be terminated before Hampton to uniformly apply the grounds for termination: Ocala Nissan, Celebrity Nissan, and Crystal Nissan. Notably, Hampton’s expert report reflects that the PMAs of all three of these dealers performed better than Hampton in Registration Effectiveness, Hampton’s preferred measure of performance. With respect to RSE, Hampton’s expert analysis shows that Ocala Nissan’s average sales performance from 2008-2010 was better than Hampton’s, with an average RSE of 65.8 percent compared to 59.6 percent for Hampton. Like Hampton, Ocala was issued a notice of default. Unlike Hampton, Ocala immediately called the Region Vice President to schedule a meeting after receiving the notice of default, came to the Region office with a plan to provide qualified management at all levels, and implemented a plan to overhaul the dealership operations with a substantial increase in advertising. While any one of these actions alone may not have been enough to delay a notice of termination, the action plan convinced Nissan that the dealer was taking the necessary steps to improve performance, and they delayed the issuance of a notice of termination to provide Ocala with a limited time to implement the plan and improve performance. While not stellar, Ocala’s RSE performance was better than Hampton’s at the time the NOT was issued to Hampton. Celebrity Nissan was a replacement dealer for Classic Nissan, a dealer who was issued a notice of termination, but sold the dealership while appealing the Department’s decision approving the termination. Upon purchasing the dealership, Celebrity had to operate from the same substandard facility as the terminated dealer and had to overcome the prior dealer’s history of poor performance in the market. When Celebrity failed to significantly improve performance at the store, Nissan issued a notice of default. In response, Celebrity notified Nissan that Celebrity was going to sell the dealership and requested Nissan to provide a buyer's assistance letter. Once Celebrity was in active negotiation with the buyer, Nissan saw no benefit in seeking termination and, instead, gave the dealer time to move forward with the sale. The dealer who purchased Celebrity began performing well. Like Celebrity, Crystal Nissan was a replacement for a terminated dealer who sold the dealership while appealing the Department’s decision approving the termination. Crystal had to share a facility with the prior dealer’s Honda store until it could build its own facility. Crystal’s predecessor had been a 20-year poor performer, and Crystal was tasked with essentially creating the market. According to Hampton’s own expert, Crystal’s “average” performance from 2008-2010 was higher than Hampton’s. In addition, Crystal, with an 80 percent RSE at the end of 2009, was performing far better than Hampton and remained over 15 points higher than Hampton at the time the NOT was issued to Hampton in December 2010.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter a final order dismissing Petitioner’s protest and approving the December 7, 2010, Notice of Termination. DONE AND ENTERED this 12th day of September, 2012, in Tallahassee, Leon County, Florida. S JAMES H. PETERSON, III Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of September, 2012.
The Issue Pursuant to Subsection 320.641(3), Florida Statutes (2006),1 the issues in the case are whether Nissan North America, Inc.'s (Respondent), proposed termination of the dealer agreement with Classic Nissan, Inc. (Petitioner), was clearly permitted by the franchise agreement, undertaken in good faith, undertaken for good cause, and based on material and substantial breach of the dealer agreement; and whether the grounds relied upon for termination have been applied in a uniform and consistent manner.
Findings Of Fact Pursuant to definitions set forth at Section 320.60, Florida Statutes, the Petitioner is a "motor vehicle dealer" and the Respondent is a "licensee." In 1997, the Petitioner and the Respondent entered into an agreement whereby the Petitioner took control of an already- existing Nissan dealership located in Orlando, Florida. In 1999, the Petitioner and the Respondent entered into a Dealer Sales and Service Agreement (Dealer Agreement), which is a "franchise agreement" as defined at Subsection 320.60(1), Florida Statutes. The Respondent's proposed termination of the 1999 Dealer Agreement is at issue in this proceeding. At all times material to this case, the dealership has been owned by Classic Holding Company. Classic Holding Company is owned by four members of the Holler family. Christopher A. Holler is identified in the Dealer Agreement as the principal owner and the executive manager of the dealership. The family owns a number of other dealerships, representing a variety of auto manufacturers. The Respondent does not sell cars at retail to individual purchasers. Standard Provision Section 3.A. of the Dealer Agreement requires that the Petitioner "actively and effectively promote" vehicle sales to individual retail purchasers. Standard Provision Section 3.B. of the Dealer Agreement permits the Respondent to develop and select the criteria by which sales are measured, as long as the measurement criteria is reasonable. Standard Provision Section 12.B.1.a. of the Dealer Agreement permits the Respondent to terminate a dealership when a dealer fails to substantially meet its vehicle sales obligation. The Dealer Agreement includes examples of various criteria that may be used to measure dealer performance. Specifically included among the examples is the calculation of a dealer's "sales penetration" within a defined geographic "Primary Market Area" (PMA) around the dealership as compared to other local and regional dealers. Sales penetration is calculated by dividing a dealer's total new vehicle sales by the number of competitive new vehicles registered in the dealer’s PMA. Data related to vehicle registration was compiled by R. L. Polk (Polk), a nationally recognized organization commonly relied upon in the auto industry for such information. There was no evidence offered to suggest the Polk data was incorrect. The dealer's sales penetration is compared to Nissan's regional sales penetration to determine the dealer's sales performance as measured against other Nissan dealer's in the region. A dealer performing at 100 percent of the regional average is performing at an "average" level. Otherwise stated, an average dealer is performing at a "C" level. The use of sales penetration calculations as a measurement of dealer performance is common in the automotive industry. The Respondent has used sales penetration as a measurement of dealer sales performance for more than 20 years. The Respondent's use of sales penetration as a measurement of dealer performance was reasonable or was permitted by the specific terms of the Dealer Agreement. The Respondent's use of the sales penetration measurements was widely communicated to dealers, who were advised on a routine basis as to the performance of their dealerships compared to local dealers and on a regional basis. The Petitioner knew, or should have known, that sales penetration was being used to measure the Petitioner's sales performance. There was no credible evidence presented at the hearing that the Respondent calculated sales penetration in order to disadvantage the Petitioner relative to other Nissan dealers in the region. At the hearing, the Petitioner suggested alternative standards by which sales performance should be reviewed, including consideration of total sales volume. The use of sales volume to measure retail effectiveness would penalize dealerships in smaller markets and fail to reflect the market opportunity available to each dealer. There was no credible evidence presented at the hearing that total sales volume more accurately measured the Petitioner's sales performance than did sales penetration. The Petitioner suggested that the use of sales penetration to substantiate the proposed termination of the Dealer Agreement at issue in this case was unreasonable and unfair because approximately half of Nissan's dealerships will be performing below 100 percent of the regional average at any given time, yet the Petitioner has not proposed termination of dealership agreements with half of its dealer network; however, the proposed termination at issue in this case is not based merely on the Petitioner's sales penetration. In 2002, the Petitioner's sales penetration was 110.5 percent, well above the regional average. At that time, the Respondent was preparing to introduce a number of new vehicles to the market. Some of the new vehicles were revisions of previous models, while others were intended to compete with products against which Nissan had not previously competed. Nissan representatives believed that the new models would substantially expand sales opportunities for its dealerships, and they encouraged their dealer network to prepare for the new environment. Some dealers responded by increasing staff levels and modernizing, or constructing new facilities. The Petitioner failed to take any substantive action to prepare for the new model lineup. Beginning in 2003, and continuing throughout the relevant period of this proceeding, the Petitioner's regional sales penetration went into decline. From 2002 to 2003, the Petitioner's annualized sales penetration fell more than 30 points to 85.13 in 2003. The Petitioner's sales penetration for 2004 was 65.08 percent. The Petitioner's sales penetration for the first quarter of 2005 was 61.78 percent. Following the introduction of the new models and during the relevant period of this proceeding, regional Nissan sales increased by about 40 percent. By 2004, the average Nissan dealer in the Petitioner's region had a sales penetration of 108.8 percent of the regional average. Through the first quarter of 2005, the average dealer in the region had a sales penetration of 108.6 percent of the regional average. Compared to all other Florida Nissan dealers during the relevant period of this proceeding, the Petitioner was ranked, at its best, 54th of the 57 Florida Nissan dealerships and was ranked lowest in the state by January 2005. Every Florida Nissan dealership, other than the Petitioner, sold more new cars in 2004 than in 2002. The Petitioner sold 200 fewer vehicles in 2004 than it had two years earlier. The three other Orlando-area Nissan dealers experienced significant sales growth at the same time the Petitioner's performance declined. The Petitioner has suggested that the Respondent failed to provide the information to appropriate management of the dealership. The Dealer Agreement indicated that Christopher A. Holler was the executive manager of the dealership; however, his address was located in Winter Park, Florida, and he did not maintain an office in the dealership. The Respondent's representatives most often met with managers at the dealership, who testified that they communicated with Mr. Holler. On several occasions as set forth herein, Nissan representatives met with Mr. Holler for discussions and corresponded with him. There was no credible evidence presented at the hearing that the Petitioner was unaware that its sales penetration results were declining or that the Petitioner was unaware that the Respondent was concerned with the severity of the decline. The Respondent communicated with the Petitioner on a routine basis as it did with all dealers. As the Petitioner's sales performance declined, the Respondent communicated the monthly sales report information to the Petitioner, and the topic of declining sales was the subject of a continuing series of discussions between the parties. In February 2003, Tim Pierson, the Respondent's district operations manager (DOM), met with the Petitioner's on- site manager, John Sekula, and discussed the dealership's declining sales penetration. Mr. Sekula was subsequently transferred by the ownership group to another auto manufacturer's dealership. In August 2003, Mr. Pierson met with the Petitioner's new manager, Darren Hutchinson, as well as with a representative from the ownership group, to discuss the continuing decline in sales penetration, as well as an alleged undercapitalization of the dealership and the lack of an on-site executive manager with authority to control dealership operations. On October 1, 2003, the Respondent issued a Notice of Default (NOD) charging that the Petitioner was in default of the Dealer Agreement for the failure to "retain a qualified executive manager" and insufficient capitalization of the dealership. In December 2003, Mr. Pierson met with Christopher A. Holler to discuss the dealership's problems. By the time of the meeting, Mr. Hutchinson had been designated as the executive manager, although Mr. Hutchinson's decision-making authority does not appear to have extended to financial operations. During that meeting, based on the Petitioner's failure to meet the capitalization requirements and respond to the deterioration in sales, Mr. Pierson inquired as to whether the Petitioner was interested in selling the dealership, but Mr. Pierson testified without contradiction that Mr. Holler responded "no." Mr. Hutchinson explained at the hearing that he asked the question because there was little apparent effort being made to address the deficiencies at the dealership, and he was attempting to ascertain the Petitioner's intentions. Mr. Hutchinson was directed to prepare a plan to address the Petitioner's customer service rating, which had fallen to the lowest in the area. Based on an apparent belief that the ownership group was going to remedy the Respondent's concerns about capitalization, the Respondent extended the compliance deadline set forth in the NOD, but the extended deadline passed without any alteration of the dealership's capitalization. A letter to the Respondent dated March 25, 2004, allegedly from Mr. Holler, noted that sales and customer service scores had improved; however, there was no credible evidence presented during the hearing to support the claimed improvement in either sales or customer service. The letter also stated that the capitalization of the dealership would be increased in April 2004 and that new vehicle orders were being reduced. On March 19, 2004, Mr. Pierson spoke with Mr. Holler and believed, based on the conversation, that a meeting would be scheduled to discuss the sales and capitalization issues. In anticipation of the meeting, Pierson sent the sales penetration reports directly to Mr. Holler, but the meeting did not occur. There was no additional capital placed into the dealership during April 2004. In April 2004, Andy Delbrueck, a new DOM for the area, met with Mr. Hutchinson to discuss the continuing decline in sales penetration through the end of March 2004. Other dealers in the area were experiencing increased sales at this time, but the Petitioner's regional sales penetration continued to decline and was below the region for almost all Nissan models. Mr. Hutchinson advised that he was hiring additional staff and had sufficient advertising funds to return the regional sales penetration averages by June. In early May 2004, Mr. Delbrueck and a Nissan vice president, Patrick Doody, sent a letter about the Petitioner's declining sales performance to Mr. Holler and requested that the Petitioner prepare a plan to address the problem. On May 18, 2004, Mr. Delbrueck again met with Mr. Hutchinson and discussed the decline in sales performance and customer service scores, as well as the issue of the dealership's undercapitalization. A May 25, 2004, letter to the Respondent, allegedly from Mr. Holler, noted that the dealership's sales penetration had improved, that additional staff had been hired, and that the Petitioner anticipated reaching or exceeding the regional sales penetration average by the end of the third quarter of 2004. The Petitioner never reached regional sales penetration averages following this letter, and, at the time it was written, there had been no material improvement in the dealership's sales penetration. On June 17, 2004, Mr. Delbrueck met with Mr. Holler to discuss the continuing decline in the Petitioner's sales performance. Mr. Delbrueck believed, based on the meeting, that Mr. Holler was aware of the problem and would make the changes necessary to improve sales, including employing additional sales staff. On July 7, 2004, the Respondent issued an Amended NOD, citing the continuing decline in the Petitioner's sales performance as grounds for the default, in addition to the previous concerns related to capitalization that were identified in the earlier NOD. The Amended NOD established a deadline of November 29, 2004, by which time the cited deficiencies were to be remedied. One day later, Mr. Delbrueck met with Mr. Hutchinson, discussed the Amended NOD, and made various suggestions as to how the Petitioner could improve the dealership's sales, including marketing and staffing changes. Mr. Delbrueck also offered to send in a trained Nissan representative, William Hayes, to review dealership operations and provide suggestions to improve conditions at the facility and ultimately to increase car sales. Mr. Hutchinson accepted the offer. A letter to the Respondent dated July 23, 2004, allegedly from Christopher A. Holler, noted that staffing levels had increased as had sales for the month of July; however, there was no credible evidence presented at the hearing that any substantive increase in staffing had occurred or that the Petitioner's sales penetration had increased. The letter contained no specific plan for remedying the problems cited in the Amended NOD. In late July 2004, a Nissan training representative, William Hayes, performed a focused review of the Petitioner's operations and provided a list of specific recommendations intended to improve the Petitioner's sales performance. He met with Mr. Hutchinson at the dealership and discussed the list of recommendations. At that time, Mr. Hutchinson stated that he believed the recommendations were useful. On September 10, 2004, Nissan Vice President Doody sent another letter to Mr. Holler referencing the Petitioner's declining sales performance and, again, requesting that the Petitioner prepare a plan to address the issue. A September 30, 2004, letter to the Respondent, allegedly from Mr. Holler, noted that staffing levels had been increased, a new executive manager (Mr. Hutchinson) had been hired, advertising funds had been increased, and customer service scores had improved. However, by that time, Mr. Hutchinson had been employed at the dealership since at least August of 2003, and there was no credible evidence presented at the hearing that staffing levels, advertising funds, or customer satisfaction scores had been materially increased. On October 18, 2004, Nissan Vice President Doody, sent another letter to Mr. Holler about the Petitioner's declining sales performance, noting that whatever efforts had been made by the Petitioner to improve sales had been unsuccessful. Thereafter, Mr. Doody arranged a meeting with Mr. Delbrueck, Mr. Holler, and another member of the Holler family to discuss the deteriorating situation at the dealership and between the parties. The meeting occurred on October 26, 2004, during which the Nissan representatives addressed the issues including under- capitalization, declining sales, and customer satisfaction scores. The Nissan representatives noted the Petitioner's failure to respond to any of the continuing problems and advised the Petitioner that, if the situation did not improve, the Respondent could initiate proceedings to terminate the Dealer Agreement. At the hearing, the Nissan representatives testified that the Holler family members in attendance at the October 26th meeting had no response during the discussion and offered no specific plan to resolve the situation. The Petitioner presented no credible evidence to the contrary. Shortly after the meeting, and in the absence of any substantive attempt by the Petitioner to resolve the concerns set forth in the NODs, the Nissan representatives decided to pursue termination of the Dealer Agreement if the Petitioner's sales penetration continued to be unsatisfactory. The Petitioner's regional sales penetration as of November 2004 was 65.69 percent. The year-end sales penetration for 2004 was 64.5 percent of regional average. On January 7, 2005, Mr. Delbrueck met with Mr. Hutchinson to discuss the dealership's sales performance. By that time, more than a year had passed since Mr. Hutchinson's designation as executive manager, yet the dealership's sales performance had not improved. Mr. Delbrueck inquired as to whether the Petitioner would be interested in using an additional Nissan resource (the EDGE program) designed to identify specific deficiencies in the sales process. The EDGE program included an extensive review of the sales process from the customer perspective, including a six-month survey period and four hidden camera "mystery shopper" visits. There was a charge to dealers participating in the EDGE program. Mr. Hutchinson told Mr. Delbrueck that he would have to discuss the program with the owners. The Petitioner subsequently chose not to participate. During the January 7th meeting, Mr. Delbrueck also encouraged Mr. Hutchinson to hire additional sales staff. At the hearing, Mr. Hutchinson testified that at the time of this meeting, he had been "building a sales force" yet by March of 2005, the Petitioner's full-time sales staff was approximately one-half of what it had been in 2003. On February 11, 2005, Mr. Delbrueck met with Mr. Hutchinson and Holler family members to follow up on the NOD and the October 26th meeting, but made no progress towards resolving the problems. On February 23, 2005, Mr. Delbrueck and Mr. Hayes met with Mr. Hutchinson to follow up on the recommendations Mr. Hayes made in July 2004. Mr. Hutchinson continued to state that the recommendations were useful, but very few had been implemented, and he offered no plausible explanation for the delay in implementing others. On February 24, 2005, the Respondent issued a Notice of Termination (NOT) of the Dealer Agreement that set forth the continuing decline in sales penetration as grounds for the action, as well as the alleged undercapitalization. At some point in early 2005, the Petitioner increased the capitalization of the dealership and corrected the deficiency, although it was implied during the hearing that the correction was temporary and that the increased capital was subsequently withdrawn from the dealership. In any event, the Respondent issued a Superceding NOT on April 6, 2005, wherein capitalization was deleted as a specific ground for the proposed termination. The Petitioner's January 2005 sales penetration was 49.3 percent of regional average, the lowest of any Nissan dealer in the State of Florida. Consumers typically shop various automobile brands, and a consumer dissatisfied with a dealer of one brand will generally shop dealers of competing brands located in the same vicinity, in order to purchase a vehicle at a convenient dealership for ease of obtaining vehicle service. The Respondent asserted that it was harmed by the Petitioner's deteriorating sales performance because Nissan sales were "lost" to other manufacturers due to the Petitioner's failure to appropriately market the Nissan vehicles. The Petitioner asserted that because Nissan's overall sales performance in the Petitioner's PMA was average, no Nissan sales were lost. The Respondent offered testimony suggesting that sales lost to Nissan may not have been lost to the Holler ownership group because the group also owned nearby Mazda and Honda dealerships. The evidence regarding the calculation of lost Nissan sales was sufficiently persuasive to establish that Nissan was harmed by the Petitioner's inadequate vehicle sales volume and by the Petitioner's failure to meet its obligation to "actively and effective promote" the sale of Nissan vehicles to individual purchasers as required by the Dealer Agreement. The number of sales lost is the difference between what a specific dealer, who met regional sales averages, should have sold compared to what the dealer actually sold. In 2003, the Respondent lost 185 sales based on the Petitioner's poor sales performance. In 2004, the Respondent lost 610 sales based on the Petitioner's poor sales performance, 200 more lost sales than from the next poorest performing Nissan dealer in Florida. The parties offered competing theories for the Petitioner's declining performance, which are addressed separately herein. The greater weight of the evidence presented at the hearing establishes that as set forth herein, the Respondent's analysis of the causes underlying the Petitioner's poor sales performance was persuasive and is accepted. The Respondent asserted that the sales decline was caused by operational problems, including an inadequate facility, inadequate capitalization, poor management, ineffective advertising, inadequate sales staff, and poor customer service. Competing dealerships in the area have constructed improved or new facilities. Customers are more inclined to shop for vehicles at modern dealerships. Upgraded dealerships typically experience increased customer traffic and sales growth. The Petitioner's facility is old and in disrepair. Some dealership employees referred to the facility as the "Pizza Hut" in recognition of the sales building's apparent resemblance to the shape of the restaurant. Nissan representatives discussed the condition of the facility with the Petitioner throughout the period at issue in this proceeding. When the Respondent began preparing for the introduction of new models in 2002, the Respondent began to encourage dealerships including the Petitioner, to participate in the "Nissan Retail Environment Design Initiative" (NREDI), a facility-improvement program. Apparently, the Petitioner was initially interested in the program, and, following a design consultation with the Respondent's architectural consultants, plans for proposed improvements to the Petitioner's facility were created. At the time, the Respondent was encouraging dealers to improve facilities, the Respondent had a specified amount of funding available to assist dealers who chose to participate in the NREDI program, and there were more dealers interested than funds were available. Although funds were initially reserved for the Petitioner's use, the Petitioner declined in June of 2003 to participate in the program, and the funds were reallocated to other dealerships. The Respondent implied that one of the reasons the Petitioner did not upgrade the dealership facility was a lack of capitalization. The allegedly inadequate capitalization of the dealership was the subject of continuing discussions between the Petitioner and the Respondent for an extended period of time; however, inadequate capitalization was specifically deleted from the grounds for termination set forth in the NOT at issue in this proceeding. Although the evidence indicates that lack of capitalization can limit a dealer's ability to respond to a multitude of problems at a dealership, the evidence is insufficient to establish in this case that an alleged lack of capitalization was the cause for the dealership's failure to upgrade its facility. In a letter to the Respondent dated June 30, 2003, the Petitioner stated only that it was "not feasible" to proceed and indicated an intention only "to proceed in the future," but offered no additional explanation for the lack of feasibility. Similarly, it is not possible, based on the evidence presented during the hearing, to find that Petitioner's failure to respond to the deteriorating operations at the dealership was due to a lack of financial resources. Daily operations at the dealership were hampered by the lack of appropriate management at the dealership location. Although Mr. Holler was identified in the Dealer Agreement as the principal owner and the executive manager of the dealership, his address was located in Winter Park, Florida, and there was no credible evidence presented that he managed the operation on a daily basis. As sales deteriorated, the Respondent began to insist that the Petitioner designate someone located on-site at the facility as executive manager with full control over the day-to- day operations of the dealership. In June 2003, Mr. Sekula was appointed as executive manager, but his authority was limited and his decisions required approval of the ownership group. At the hearing, Mr. Sekula acknowledged that the ownership group was bureaucratic. Shortly after his appointment, he was transferred by the ownership group to another of their competing dealerships. Several months later, Mr. Hutchinson was appointed as executive manager. There was no credible evidence presented to establish that Mr. Hutchinson ran the fiscal operations of the dealership. He prepared budgets for various expenditures and submitted them to the ownership group. The ownership group apparently controlled the "purse strings" of the dealership. There was no credible evidence presented as to the decision- making process within the group; however, decisions on matters such as the dealership's advertising budget required approval of the ownership group. The failure to provide appropriate on-site management can delay routine decisions and negatively affect the ability to manage and motivate sales staff. For example, when Nissan offered Mr. Hutchinson the opportunity to participate in the Nissan EDGE sales program, Mr. Hutchinson was initially unable to respond, because he lacked the ability to commit the financial resources to pay for the program. Mr. Hutchinson testified that the ownership group routinely approved his advertising budget requests. As the Petitioner's sales declined, so did advertising expenditures, from $694,107 in 2002 to $534,289 in 2004. The Petitioner's declining advertising expenditures were a contributing factor in deteriorating sales. The Petitioner reduced its total advertising budget while the Orlando market was growing, and the Petitioner's sales penetration declined while competing dealerships sales increased. Additionally, the Petitioner did not monitor the effectiveness of its advertising. The Petitioner's advertising was implemented through "Central Florida Marketing," a separate company owned by the Holler organization. There is no evidence that either the Petitioner or Central Florida Marketing monitored the effectiveness of the advertising. A substantial number of Nissan buyers within the Petitioner's PMA purchased vehicles from other dealerships, suggesting that the advertising failed to attract buyers to the Petitioner's dealership. Only eight percent of the Petitioner's customers acknowledged seeing the Petitioner's advertising, whereas about 20 percent of car shoppers in the Orlando area admit being influenced by dealer advertising. The Respondent asserted that the Petitioner failed to have sufficient sales staff to handle the increased customer traffic precipitated by the introduction of new Nissan models in 2002 and 2003. The Respondent offered evidence that the average vehicle salesperson sells eight to ten cars monthly, five to six of which are new cars and that, based on sales expectations, the Petitioner's sales force could not sell enough cars to meet the regional averages. Although the evidence establishes that the Petitioner cut sales staff as sales declined at the dealership, there is no credible evidence that customers at the Petitioner's facility were not served. The assertion relies upon an assumption that the Petitioner experienced increased sales traffic upon the introduction of new models and that the sales staff was inadequate to sufficiently service the increased traffic. The evidence failed to establish that the Petitioner experienced an increase in sales traffic such that sales were lost because staff was unavailable to assist customers. However, the Petitioner's sales staff failed to take advantage of customer leads provided to the dealership by the Respondent. The Respondent gathered contact information from various sources including persons who requested vehicle information from the Respondent's internet site, as well as the names of lease customers whose lease terms were expiring. The contact information was provided to dealers without charge through the Respondent's online dealer portal. The Petitioner rarely accessed the data, and it is, therefore, logical to presume that the leads resulted in few closed sales. The Petitioner's customer satisfaction scores also declined during the time period relevant to this proceeding. Poor customer service can eventually influence sales as negative customer "word-of-mouth" dampens the interest of other prospective customers. The Respondent monitored the customer opinions of dealer operations through a survey process, which resulted in "Customer Service Index" (CSI) scores. Prior to 2003, the Petitioner's CSI scores had been satisfactory, and then CSI scores began to decline. By the close of 2003, the CSI scores were substantially below regional scores, and the sales survey score was the lowest in the Petitioner's district. Although the Petitioner asserted on several occasions that CSI scores were increasing, the evidence established that only the March 2004 CSI scores improved and that no other material improvement occurred during the time period relevant to this proceeding. The Petitioner asserted at the hearing that the sales performance decline was caused by a lack of vehicle inventory, the alteration of the Petitioner's PMA, a lack of available financing from Nissan Motors Acceptance Corporation (NMAC), hurricanes, improper advertising by competing dealers, and the death of Roger Holler, Jr. The Petitioner also asserted that this termination action is being prosecuted by the Respondent because the Petitioner declined to participate in the NREDI dealer-facility upgrade program and declined to sell the Respondent's extended service plan product. A number of the suggested causes offered by the Petitioner during the hearing were omitted from the Petitioner's Proposed Recommended Order, but nonetheless are addressed herein. The Petitioner asserted that the Respondent failed to make available marketable inventory sufficient for the Petitioner to meet sales penetration averages. The evidence failed to support the assertion. Nissan vehicles were distributed according to an allocation system that reflected dealer sales and inventory. The Respondent used a "two-pass" allocation system to distribute 90 percent of each month's vehicle production. The remaining 10 percent were reserved for allocation by Nissan market representatives. Simply stated, dealers earned new vehicles to sell by selling the vehicles they had. New vehicle allocations were based upon each dealer's "days' supply" of cars. The calculation of days' supply is essentially based on the number of vehicles a dealer had available on the lot and the number of vehicles a dealer sold in each month. Through the allocation system, a dealership that failed to sell cars and lower its days' supply would be allocated fewer cars during the following month. More vehicles were made available to dealers with low days' supplies than were available to dealers with higher supplies. It is clearly reasonable for the Respondent to provide a greater supply of vehicles to the dealers who sell more cars. At some point during the period relevant to this proceeding, Nissan removed consideration of sales history from the days' supply-based allocation system calculation; however, there was no credible evidence presented to establish that the elimination of the sales history component from the calculation reduced the vehicle allocation available to the Petitioner. The Respondent applied the same allocation system to all of its dealerships, including the Petitioner. There is no evidence that the Respondent manipulated the allocation system to deny any vehicles to the Petitioner. The Respondent provided current inventory and allocation information to all of its dealerships, including the Petitioner, through a computerized database system. The Petitioner was responsible for managing vehicle inventory and for utilizing the allocation system to acquire cars to sell. Although the Petitioner asserted that the decline in sales was related to a lack of vehicle inventory, there was no evidence that the Petitioner's inventory declined during the period relevant to this proceeding. In fact, the evidence established that the Petitioner's inventory actually increased from 150 vehicles in early 2003 to 300 vehicles in early 2004, at which time the Petitioner reduced vehicle orders and the inventory began to decline. The Petitioner also asserted that it was provided vehicles for sale that were undesirable to the Petitioner's customers, due to expensive or excessive options packages. There was no credible evidence that the Petitioner's sales declines were related to an inventory of undesirable vehicles. Further, there was no evidence that the decline in sales penetration was related to poor supply of any specific vehicle model. Other than two truck models, the Petitioner's sales penetration decline occurred across the full range of Nissan vehicles offered for sale. Every Nissan dealer had the ability to exercise significant control (including color and option package choices) over most of the inventory acquired during the "first pass" allocation. Any inventory deficiencies that may have existed were the result of the Petitioner's mismanagement of inventory. Mr. Hutchinson did not understand the vehicle allocation system or its relationship to the days' supply calculation. The Petitioner routinely declined to order units of Nissan's apparently most marketable vehicles during the allocation process. During 2003, the Petitioner declined 137 vehicles from the "first pass" allocation, including 18 Sentras and 56 Altimas, and declined 225 vehicles from the "second pass" allocation, including 59 Sentras and 59 Altimas. During the first half of 2004, the Petitioner declined 58 vehicles from the "first pass" allocation and 42 vehicles from the "second pass" allocation. During the hearing, one of the Petitioner's witnesses generally asserted that the Respondent's turndown records were erroneous; however, the witness was unable to identify any errors of significance, and the testimony of the witness was disregarded. After the two-pass allocation process was completed, there were usually some vehicles remaining for distribution to dealers. Nissan assigned responsibility to DOMs to market these units to dealers. The DOMs used the days' supply calculation to prioritize the order in which they contacted dealers, although the vehicles were available to any dealer. There is no evidence that any DOM manipulated the days' supply-based prioritization of vehicles for denying the Petitioner the opportunity to obtain vehicles to sell. Any vehicles remaining available after the DOM attempts to distribute the vehicles were identified as "Additional Vehicle Requests" (AVR) and were made available to all dealers simultaneously. Dealerships were notified of such availability by simultaneous facsimile transmission or through the Nissan computerized database. There was no evidence that the Petitioner was denied an opportunity to obtain AVR vehicles, and in fact, the Petitioner obtained vehicles through the AVR system. The Petitioner asserted that the Nissan practice of reserving 10 percent of each month's production for allocation by market representatives rewarded some dealers and punished others. Market representative allocations are standard in the industry, and such vehicles are provided to dealerships for various reasons. Nissan market representative allocations were used to supply extra cars to newly opened dealerships or in situations where a dealership was sold to new ownership. Nissan market representative allocations were also provided to dealers who participated in the NREDI facility upgrade program. The provision of additional vehicles by market representatives to new or expanded sales facilities was reasonable because the standard allocation system would not reflect the actual sales capacity of the facility. The Petitioner presented no evidence that the Respondent, or any of its market representatives, manipulated the 10 percent allocation to unfairly reward any of the Petitioner's competitors or to punish the Respondent for not participating in various corporate programs. Prior to 2001, the Respondent had a program of providing additional vehicles to under-performing dealers in an apparent effort to increase sales by increasing inventory; however, the program did not cause an increase in sales and actually resulted in dealers being burdened with excessive unsold inventory and increased floor plan financing costs. The Respondent eliminated the program in 2001, and there is no evidence that any dealership was provided vehicles through this program during the time period relevant to this proceeding. There is no evidence that the Respondent eliminated the program for the purpose of reducing the vehicles allocated or otherwise provided to the Petitioner. The Petitioner asserted that the Respondent altered the Petitioner's assigned PMA in March 2004 and that the alteration negatively affected the Petitioner's sales penetration calculation because the Petitioner's area of sales responsibility changed. Prior to March 2004, the Petitioner's PMA was calculated using information reported by the 1990 United States Census. After completion of the 2000 Census, the Respondent evaluated every Nissan dealer's PMA and made alterations based upon population changes as reflected within the Census. Standard Provision Section 3.A. of the Dealer Agreement provides that the Respondent "may, in its reasonable discretion, change the Dealer's Primary Market Area from time to time." There was no credible evidence presented to establish that the 2000 PMA was invalid or was improperly designated. There was no evidence that the Respondent's evaluation of the Petitioner's PMA was different from the evaluation of every other PMA in the United States. There was no evidence that the Respondent evaluated or altered the Petitioner's PMA with the intent to negatively affect the Petitioner's ability to sell vehicles or to meet regional sales penetration averages. There was no credible evidence that the 2000 PMA adversely affected the dealership or that the Petitioner's declining sales penetration was related to the change in the PMA. The alteration of the PMA did not sufficiently affect the demographics of the Petitioner's market to account for the decline in sales penetration. Recalculating the Petitioner's sales penetration under the prior PMA did not markedly improve the Petitioner's sales penetration. The Petitioner suggested that the 2000 PMA revision was an impermissible modification or replacement of the Dealer Agreement, but no credible evidence was offered to support the assertion. There was no evidence that the Petitioner did not receive proper notice of the 2000 PMA. At the hearing, the Petitioner implied that the Respondent caused a decline in sales by refusing to make Nissan Motor Acceptance Corporation (NMAC) financing available to the Petitioner's buyers. NMAC is a finance company affiliated with, but separate from, the Respondent. NMAC provides a variety of financing options to dealers and Nissan vehicle purchasers. NMAC relies in lending decisions, as do most lenders, on a "Beacon score" which reflects the relative creditworthiness of a customer's application to finance the purchase of a car. Vehicle financing applications are grouped into four general "tiers" based on Beacon scores. Various interest rates are offered to customers based on Beacon scores. The Petitioner offered data comparing the annual number of NMAC-approved applications submitted in each tier by the Petitioner on behalf of the Petitioner's customers to suggest that the decline in the Petitioner's sales indicated a decision by NMAC to decrease the availability of NMAC credit to the Petitioner's customers. There was no evidence that NMAC treated the Petitioner's customers differently than the customers of competing dealerships or that NMAC-financed buyers received preferential interest rates based upon the dealership from which vehicles were purchased. There was no evidence that the Respondent exercised any control over individual financing decisions made by NMAC. There was no evidence that the Respondent manipulated, or had the ability to manipulate, the availability of NMAC financing for the purpose of negatively affecting the Petitioner's ability to sell vehicles. A number of hurricanes passed through the central Florida region in August and September of 2004. The Petitioner asserted that the dealership's physical plant was damaged by the storms, and that the hurricane-related economic impact on area consumers caused, at least in part, the decline in sales. The evidence failed to establish that the Petitioner's physical plant sustained significant hurricane damage to the extent of preventing vehicle sales from occurring. None of the Petitioner's vehicle inventory sustained hurricane- related damage. There was no evidence presented to indicate that the Petitioner's customers experienced a more significant economic impact than did the customers of competing dealers in the area. There was no credible evidence that the hurricanes had any material impact on the Petitioner's sales penetration. The Petitioner's sales penetration immediately prior to the hurricanes was 62.8 percent. The Petitioner's sales penetration in August 2004 was 61.6 percent, in September was 61.1 percent, and in October was 62.3 percent. Generally, within 30 to 45 days after a hurricane, customers with damaged vehicles use insurance proceeds to purchase new vehicles. The Petitioner's sales volume increased at this time; although because other dealers in the region also experienced increased sales, there was no change to the Petitioner's sales penetration calculation. The Petitioner asserted that improper advertising of "double rebates" by competing dealers caused declining sales, and offered evidence in the form of newspaper advertisements in support of the assertion; however, the Petitioner's own advertising indicated the availability of such rebates on occasion. There was no evidence presented to establish that the Respondent was responsible for creating or approving advertisements for dealerships. The Respondent has a program whereby dealers who meet certain advertising guidelines can obtain funds to defray advertising costs, but the program is voluntary. The Respondent does not regulate vehicle advertising or retail pricing. There was no evidence that the Petitioner reported any allegedly misleading or illegal advertising with any law enforcement agency having jurisdiction over false advertising or unfair trade practices. Mr. Hutchinson testified that the death of Roger Holler, Jr., in February 2004, negatively affected sales at the dealership, but there was no evidence that Roger Holler, Jr., had any role in managing or operating the dealership. The Petitioner's sales decline commenced prior to his death and continued thereafter. The evidence failed to establish that the death had any impact on the operation of the dealership or the Petitioner's sales performance. The Petitioner asserted that the Respondent's effort to terminate the Dealer Agreement was an attempt to punish the Petitioner for declining to participate in the NREDI program and offered a chronology of events intended to imply that the Respondent's actions in this case were a deliberate plan to force the Petitioner to either build a new facility or sell the dealership. The assertion is speculative and unsupported by credible evidence. During the time period relevant to this proceeding, only one of the four Orlando-area Nissan dealers agreed to participate in the NREDI program. Of the four dealerships, three experienced increased sales activity during the period relevant to this proceeding. The Petitioner was the only one of the four dealerships to experience a decline in sales penetration during this period. The Respondent has taken no action against the two other dealerships that declined to participate in the NREDI program. There was no credible evidence that the Respondent has taken any punitive action against any dealership solely based on a dealership's decision not to participate in the NREDI program. The Petitioner asserted that the Respondent's actions in this case were intended to punish the Petitioner for not selling the Respondent's extended service contract (known as "Security Plus") and for selling a product owned by the Petitioner, but there was no evidence supporting the assertion. A substantial number of dealers in the region did not sell the Security Plus product to new car buyers. There was no evidence that the Respondent has penalized any dealer, including the Petitioner, for refusing to sell the Nissan Security Plus product. During the hearing, the Petitioner identified a number of other troubled Nissan dealerships, ostensibly to establish that other dealerships similarly situated to the Petitioner had not been the subject of Dealer Agreement termination proceedings and that the Respondent had failed to enforce the Dealer Agreement termination provisions fairly. A number of the dealerships cited by the Petitioner are outside the State of Florida and are immaterial to this proceeding. The Dealer Agreement provides for termination of an agreement if the dealer materially and substantially breaches the agreement. The Dealer Agreement does not require termination of every dealership that fails to achieve average regional sales penetration. Termination of a Dealer Agreement because of sales performance requires a dealer-specific analysis that includes consideration of the factors underlying poor sales and consideration of conditions that may warrant delaying termination proceedings. As to the other Florida Nissan dealers cited by the Petitioner, many had higher sales penetration levels than did the Respondent. When compared to the Florida dealerships, the magnitude of the Petitioner's sales penetration decline exceeded that of all the other dealerships. Many of the cited dealerships had also initiated changes in management, staffing, and facilities to address sale and service deficiencies. Some of the cited dealers had already shown sales and service-related improvements. One dealership, Love Nissan, had already been terminated, even though its sales penetration had exceeded that of the Petitioner. One dealership cited by the Petitioner was Hampton Nissan, against whom the Respondent had initiated termination proceedings in 2003. Changes to Hampton's PMA based on the 2000 PMA resulted in an increase in the dealership's sales penetration eventually to levels exceeding those of the Petitioner, and Nissan has rescinded the action. There was no evidence that the Hampton Nissan PMA was calculated differently than the Petitioner's PMA, or that either PMA was altered purposefully to affect the dealer's sales penetration results. Other dealerships cited by the Petitioner were being monitored by the Respondent to ascertain whether efforts to improve sales performance succeed. The Respondent may ultimately pursue termination proceedings against underperforming dealerships if sales performance fails to improve. There was no credible evidence that, prior to initiating this termination proceeding, the Respondent failed to consider the facts and circumstances underlying the Petitioner's poor sales and the Petitioner's response to the situation. The Petitioner has experienced a substantial and continuing decline in sales penetration and has failed to respond effectively to the deteriorating situation during the period at issue in this proceeding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter a final order dismissing Petitioner's protest and approving the April 6, 2005, Superceding Notice of Termination. DONE AND ENTERED this 20th day of March, 2007, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of March, 2007.
The Issue The issue in this case is whether Respondent, Winn Dixie, discriminated against Petitioner, Simon Rowland, on the basis of his disability (cerebral palsy) in violation of the Florida Civil Rights Act.
Findings Of Fact Petitioner is an elderly man who has had cerebral palsy since birth. In August 2004, Petitioner went to work at the Dundee, Florida, Winn Dixie store as a courtesy clerk or bagger. His duties were to retrieve shopping carts from the parking lot, help customers, clean restrooms, and other general duties. He was not as fast a worker as others, but Winn Dixie accommodated him so that he could continue working. Petitioner claims that he was initially told he would work 20 to 25 hours per week. Winn Dixie asserts that he was given no indication of hours he might work. It is clear that Petitioner worked approximately ten hours per week during his employment. Lora Prine was the manager of the Dundee store, and Petitioner enjoyed working with Prine. Prine was later transferred to the Winter Haven store, and Petitioner asked to be transferred there, as well. There was no position open at first, but when a position became available, Prine contacted Petitioner to apply. When he was hired at the Winter Haven store, Petitioner was told that he would average between ten and 15 hours per week. While Petitioner was working at the Winter Haven store, Prine would make sure that his duties were consistent with his capabilities. She would make sure that Petitioner had assistance when lifting heavy objects, for example, when he was bagging groceries. Prine also allowed Petitioner to leave work early on many occasions due to illness and to miss work altogether at times, e.g., when he needed to visit his ailing brother in Gainesville. Petitioner freely admits that Prine and Winn Dixie accommodated him when he was working there. In November 2009, Petitioner was hospitalized for a week. The hospitalization involved an unnamed malady, but Petitioner was adamant that it did not involve a stroke. There is no evidence that Winn Dixie believes Petitioner suffered a stroke at that time. Upon release from the hospital, Petitioner was provided with portable oxygen. He said that the oxygen was supposed to be used while he was sleeping, but he used it a few times during the day right after he got out of the hospital. Prine learned from Petitioner's son that Petitioner was using oxygen. In mid-January 2010, Petitioner called Prine to see about coming back to work. Prine had just returned from medical leave and asked Petitioner to call her back in a few days. When Petitioner called back, he discussed his hospitalization and convalescence with Prine. He informed Prine of his need to utilize oxygen as a result of his illness. Prine suggested to Petitioner that maybe it was time for him to retire; Petitioner agreed with Prine that it was time. Prine annotated Petitioner's work file to indicate he was on retired status.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Commission on Human Relations denying Petitioner, Simon Rowland's, Petition for Relief in full. DONE AND ENTERED this 19th day of April, 2011, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 19th day of April, 2011.
The Issue Whether Respondent Employer is guilty of an unlawful employment practice by reason of racial discrimination.
Findings Of Fact The Amended Charge of Discrimination (Joint Exhibit A) was dated by Petitioner October 28, 2000. It was stamped-in as filed with the Commission on November 1, 2000. There is nothing of probative value in the record to show when the Charge of Discrimination, if any, was filed with the Commission.3 The Amended Charge of Discrimination alleges discrimination by Respondent due to Petitioner's race because: On or about September 16, 1999, [Petitioner] was constructively discharged (forced to resign) from my position with Respondent. During . . . employment I was denied raises and treated differently than similarly situated white employees. Therefore, the Amended Charge of Discrimination asserts racial discrimination by disparate treatment which allegedly occurred before September 16, 1999, and constructive discharge (termination) occurring on September 16, 1999. The Commission entered its "Determination: No Cause" on April 24, 2002. The Petition for Relief was filed with the Commission on May 31, 2002. The Petition describes alleged disparate treatment, but it makes no mention of any termination. Petitioner is an African-American male. Respondent conducts a furniture rental and rent-to-buy business and operates one of its stores in Palatka, Florida. Petitioner was first hired in the Palatka store in May 1998, when that store was first opened. When he was hired, it was as a Customer Accounts Manager (CAM), at $7.25 per hour. The function of a CAM is essentially that of a collection agent. As a CAM, Petitioner was responsible for collecting money from customers who had become delinquent in making their rental payments. This was accomplished by Petitioner's either telephoning or personally visiting the delinquent customers and working with them to get their payments current. Petitioner typically spent mornings making telephone calls and afternoons visiting delinquent account holders. Prior to coming to work for Respondent in May 1998, Petitioner had no experience working in the furniture rental and sales business. However, after he was hired in May 1998, Petitioner received two weeks of training as a CAM. In addition, Petitioner worked with the Palatka store's General Manager in trying to bring the store's delinquent accounts current. Respondent typically gives raises in June and December of each year based on employee performance and tenure with the company. In June 1998, after he had only worked for Respondent for one month, although he had not completed the usual six months required before being eligible for a raise, and despite his collection rate not meeting Respondent's standard (see infra.), Petitioner received a raise of 25 cents per hour. In September 1998, Petitioner voluntarily left Respondent's employ to work for a local restaurant, because he had been offered more money to work there. Petitioner admitted that nothing inappropriate happened while he worked for Respondent from May 1998 until September 1998. In March 1999, Petitioner was recruited and rehired by Respondent to work as the sole CAM at its Palatka store. Prior to being rehired, Petitioner was interviewed by Respondent's District Manager, Greg Bellof, a Caucasian male. Petitioner was rehired at the same $7.50 per hour that he had been making when he voluntarily quit in September 1998. One of the ways in which Respondent tracks the respective performance of its stores is to measure each store's delinquent account collections rate. In 1999, including the time that Petitioner worked there, the Palatka store had the worst collections rate of the six stores in Mr. Bellof's district. During the entire time that Petitioner worked as a CAM in that store, including both his 1998 and 1999 employment periods, the Palatka store never met Respondent's standard for collections. As of the date of hearing, the Palatka store was doing well in terms of collections and had been meeting or exceeding Respondent's standard. Petitioner contends that from his March 1999 rehire until July 1999, everything relating to his employment went fine. Three months post re-hire, Petitioner did not get a June 1999 raise because of a combination of his not having worked for Respondent a full six months and the below-standard collection rate. This was different than what had occurred in his previous employment with Respondent (see Finding of Fact 10 supra.), but it was not shown that any similarly situated employee was treated differently than Petitioner in June 1999. In July 1999, Petitioner overheard his store's General Manager's end of a telephone conversation with an unidentified individual. Petitioner contends that the Caucasian General Manager and this individual were discussing replacing Petitioner as the CAM. Petitioner assumed that the person on the other end of the phone was another manager, but he admitted that he did not know whether the individual with whom his General Manager was speaking was an employee of Respondent. Petitioner could not hear anything that the other individual was saying. When Petitioner confronted his General Manager about this telephone conversation, the General Manager denied that he had been discussing replacing Petitioner as the CAM during that telephone conversation. The General Manager told Petitioner that, "You did not hear what you thought you heard."4 Respondent did not, in fact, replace Petitioner until after he voluntarily quit the following September. (See Finding of Fact 35). The District Manager, Mr. Bellof, testified credibly that he never had any plans to replace Petitioner as the CAM. Petitioner contended that beginning in August 1999, Mr. Bellof, who typically spent only one or two days per week at the Palatka store, began spending more time standing over Petitioner as Petitioner made telephone calls, and frequently asked Petitioner what he was doing. Mr. Bellof admitted that when one of his stores is having trouble with accounts, he spends more time in the CAM's office, observing the CAM performing his or her job, so that he can look for ways to help the CAM improve the store's collections rate. In particular, Mr. Bellof listens to telephone calls the CAM is having with delinquent customers, to find out how the CAM is handling certain situations. In addition, when one of his stores has not met Respondent's collections rate standard, Mr. Bellof accompanies the CAM on visits to delinquent customers, in an effort to help identify areas for improvement. By observation and descriptive testimony, it is found that Mr. Bellof is what might be described in the common jargon as "a go-getter" and "wunderkind" in Respondent's rent-to-own industry. He is very intense. Despite Mr. Bellof's emphasizing his observation of Petitioner over his inquiry and correction of Petitioner, it is clear to the undersigned that there may have been some degree of micro-management involved in their relationship. However, Petitioner never complained to Mr. Bellof that he felt Mr. Bellof was hounding him or giving him a hard time, and Petitioner's witness, La Tonya Fuqua, testified that she did not notice any tension between Petitioner and Mr. Bellof. Ms. Fuqua was the only other African-American, besides Petitioner, working in the Palatka store. Petitioner contended that Mr. Bellof once referred to him as a "road dog," in the presence of other superiors. However, Petitioner admitted that as the CAM, he was required to, and did, spend quite a bit of time on the road for the purpose of visiting customers with delinquent accounts. Petitioner testified that he does not believe that the phrase "road dog" has any racial connotations. Instead, Petitioner simply felt that it was not proper language to be used to someone of his rank in Respondent's managerial hierarchy. Petitioner spoke to Mr. Bellof about the impropriety of his use of this term, and Mr. Bellof never used the term again. Petitioner demonstrated that Mr. Bellof spent a lot of time watching, listening, and urging Petitioner with regard to his duties as a CAM and that he sometimes rode with Petitioner on his calls, but Petitioner was the only CAM in the Palatka store, and he did not demonstrate that Mr. Bellof treated him any differently than any other CAM of any race. Petitioner simultaneously complained that Mr. Bellof and other managers did not adequately train him to do his job better as a CAM, train him as a CAM beyond his initial two weeks' training, or train him as a Sales Manager so he could move up to the General Manager position. Petitioner complained that, while he worked for Respondent in 1999, Respondent twice hired Caucasian Customer Accounts Advisors (CAAs), Randy Nobenger and Derrick Christian, at a pay rate of 20 to 25 cents more per hour than Petitioner was making. CAAs generally assist the CAM with collections, so Petitioner felt those CAAs hired in his store should have been paid less than he was, especially since he was required to train them. It is not unusual for Respondent to hire a CAA at a pay rate higher than that being paid to the CAM at the same store. On at least two other occasions, Mr. Bellof has hired CAAs for other stores at a rate of pay higher then the same store's CAM. On one of those occasions, the CAA was African- American and the CAM was Caucasian. A CAA may be hired at a rate above the rate paid the CAM for a number of reasons. During the interview process, desirable candidates are typically asked how much s/he would like to be paid. If the desired CAA candidate is making a higher rate of pay at his or her existing job or for any reason will not accept less-than-a certain amount in order to meet his or her ongoing financial obligations, then that rate of pay is offered by Respondent. If the CAA has more experience than the CAM, a competitive rate of pay is offered. In some instances, as was the case with both Mr. Nobenger and Mr. Christian, Respondent was unable to secure a desired CAA candidate at a rate of pay below the CAM's rate. Petitioner acknowledged that it was understandable that Respondent paid CAA Nobenger more than a CAM because Nobenger had 15 years of previous managerial experience. Petitioner did not feel that a higher pay rate was reasonable with regard to CAA Christian. Petitioner contended that he should not have been required to train people who were paid more than he was; that he could not have been such a poor employee if he were required to train other employees to do his job; that the requirement that he train Messrs. Nobenger and Christian detracted from his opportunity to do his job as CAM; and that training the CAAs was part of a management plot to have him train these employees and then fire him. However, Petitioner conceded that he worked directly with his store's General Manager, that the General Manager had other duties besides training and that Petitioner was the only employee, besides the General Manager, available in the Palatka store to train CAAs. Petitioner further contended that he was denied opportunities for advancement through training, which training was provided to CAA Christian. However, Petitioner's request for training appears to have been the equivalent of "Show me. Show me how to do a better job as CAM," which was fairly vague, and Mr. Bellof believed his involvement with Petitioner constituted training in the CAM position. Petitioner testified that Mr. Christian was being trained for a General Manager slot "within 4 to 6 months" of Mr. Christian's being hired. Petitioner only worked for Respondent during four months in 1998 and five months in 1999. Mr. Christian was trained in collections as a CAA by Petitioner and trained by someone else as a Sales Manager. He wound up being offered a General Manager position. Whether Mr. Christian was offered a General Managership before or after Petitioner left Respondent's employ in September 1999, is unclear, but since the Palatka store still had its General Manager when Petitioner quit in 1999, Mr. Christian clearly was not promoted in that store while Petitioner was still employed by Respondent. In September 1999, Petitioner was contacted by one of his former employers, Wal-Mart, which asked if he wanted to return to his previous position as a Loss Control Manager at $8.00 per hour, plus full health benefits. Petitioner accepted the Wal-Mart job and resigned his position with Respondent. There is no evidence that Petitioner was looking for another job in order to leave Respondent's employment before Wal-Mart initiated its offer to him. Respondent replaced Petitioner with a new employee (race not of record) after Petitioner resigned. Respondent did not promote one of the Caucasian CAAs into Petitioner's position of CAM. Every week during his employment with Respondent, Petitioner signed a timesheet verifying the number of hours that he worked. These timesheets also contained a statement Petitioner signed certifying that if he felt he had been discriminated against or harassed, he had telephoned Respondent's toll free number listed on the timesheet and reported the discrimination or harassment. During his employment with Respondent, Petitioner signed this certification on his timesheets. He also never called the toll free number and never complained about being harassed or discriminated against.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a Final Order dismissing the Petition for Relief, the Amended Charge of Discrimination, and if applicable, the Charge of Discrimination thereto appertaining. DONE AND ENTERED this 31st day of December, 2002, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 31st day of December, 2002.
Findings Of Fact Petitioner was employed as a part-time store clerk from January 11, 1983 until January 14, 1986 at Respondent's 7-Eleven Store No. 1413-25564 located at 2990-16th Street, North, St. Petersburg, Florida. Respondent is an employer within the terms of the Human Rights Act of 1977, Chapter 760, Florida Statutes. Upon employment by Respondent, employees must sign an Awareness Form which provides, in pertinent part, that "consumption or possession of alcoholic beverages or illegal drugs while on company property (this includes the parking lot and rear of the store)" is grounds for dismissal. Petitioner signed this Awareness Form, and thereby acknowledged having been informed of Respondent's disciplinary policies set forth on said form. On December 25, 1985, at approximately 1:15 a.m. Petitioner and coworker Debbie Meany consumed one bottle of champagne in 7-Eleven Store 1413- 25564 after closing-up the store at 1:00 a.m. Meany had purchased the champagne during their shift on the evening of December 24, and then drank it with Petitioner "because it was Christmas Eve." Meany testified that she became drunk while she and Petitioner drank the bottle of champagne. Petitioner's testimony at hearing that the champagne he drank with Meany was nonalcoholic is specifically rejected based upon Meany's testimony, the fact that nonalcoholic champagne was not sold in this 7-Eleven store at the time, and the fact that he referred to the champagne as "booze" in a letter written to Fred Nichols, Respondent's personnel manager, on January 10, 1986. Meany was fired along with Petitioner for consumption of alcoholic beverages on the premises, and has no apparent motive to be untruthful in her contention that the champagne was alcoholic. Due to an audit of 7-Eleven Store 1413-25564 which revealed a merchandise shortage of approximately $1300, polygraphs were ordered for all store employees. Meany's polygraph was on January 6, 1986, and it was during her examination by Robert Rathbun that she admitted to consuming the bottle of champagne with Petitioner. She signed a statement, which she confirmed at hearing, indicating Petitioner opened the bottle, and they drank the champagne together. Petitioner was polygraphed on January 10, 1986, after executing a consent form, and during the course of his examination, he showed deception in his answers to questions about the use of alcohol on the job. When he was confronted with this indication of deception and with Meany's statement, he admitted to drinking champagne with Meany in 7-Eleven Store 1413- 25564 after they had closed at 1:00 a.m. on December 25, 1987. Thereafter, Petitioner met with Mike McKenzie, field manager, and Larry Good, district manager, on January 13, 1986 to discuss the results of the polygraph. McKenzie and Good also met with Meany. Petitioner was terminated on January 14, 1986 for consumption of an alcoholic beverage in the 7-Eleven store at which he worked. Petitioner did not disclose any handicap or physical condition which would prevent him from performing the job of store clerk on his initial application for employment, or on an application he completed and submitted to Respondent on May 27, 1986, subsequent to his termination. There is no evidence that Petitioner ever informed McKenzie or Good of his handicap. However, Petitioner's immediate supervisors Watley and Egge, store managers, did know of his handicap, and did not require him to "front shelves." This is a normal part of a store clerk's duties by which merchandise is brought forward to the front of a shelf to take the place of products that have been purchased. It has been established that Petitioner is physically handicapped due to the injury of both his knees while in the Army. He was discharged from the Army due to his disability. This handicap makes it very difficult for him to bend down, and therefore the accommodation which Watley and Egge provided was reasonable and appropriate under the circumstances. Respondent does hold Christmas parties at which alcoholic beverages are consumed in its district office. However, the district office is a separate office building and there is no 7-Eleven store located at said office. Since the district office is not a store licensed to sell alcoholic beverages, the consumption of alcohol at that location is not a violation of Respondent's policy about the consumption of alcohol set forth on the Awareness Form. A review of Petitioner's personnel file indicates prior warnings for writing bad checks, and making unacceptable advances on a female coworker.
Recommendation Based on the foregoing, it is recommended that a Final Order be issued by the Florida Commission on Human Relations dismissing Petitioner's charge of discrimination against Respondent. DONE and ENTERED this 10th day of March, 1988, in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of March, 1988. APPENDIX Rulings on Petitioner's Proposed Findings of Fact: Adopted in Finding of Fact 9. Rejected as not based on competent substantial evidence. Rejected as irrelevant, unnecessary and as simply a summation of testimony which is not persuasive. Rejected in Findings of Fact 4, 6, 7 and 12. Rejected in Finding of Fact 4. Rejected as irrelevant. Rejected in Finding of Fact 4. Rejected as not based on competent substantial evidence. Rejected in Findings of Fact 5 and 6. Rejected in Finding of Fact 6. Rejected in Finding of Fact 12. Rejected as not based on competent substantial evidence. Rulings on Respondent's Proposed Findings of Fact: Adopted in Findings of Fact 1 and 2. Adopted in Finding of Fact 1. 3-5. Adopted in Finding of Fact 3. 6-7. Adopted in Finding of Fact 4. 8-10. Adopted in Finding of Fact 5. 11-13. Adopted in Findings of Fact 4 and 6. 14-15. Adopted in Findings of Fact 4 and 7. Rejected as irrelevant and unnecessary. Adopted in Finding of Fact 4. 18-19. Rejected as unnecessary. Adopted in Finding of Fact 11. Adopted in Finding of Fact 12. 22-24. Adopted in Finding of Fact 8. 25. Adopted in Findings of Fact 7 and 8. COPIES FURNISHED: WINSTON S. MCCLINTOCK 475 - 41ST AVENUE, NORTH ST. PETERSBURG, FLORIDA 33703 E. JOHN DINKEL, ESQUIRE POST OFFICE BOX 1531 TAMPA, FLORIDA 33601 DONALD A. GRIFFIN EXECUTIVE DIRECTOR FLORIDA COMMISSION ON HUMAN RELATIONS 325 JOHN KNOX ROAD BLDG. F, SUITE 240 TALLAHASSEE, FLORIDA 32399-1925 SHERRY B. RICE, CLERK HUMAN RELATIONS COMMISSION 325 JOHN KNOX ROAD BLDG. F, SUITE 240 TALLAHASSEE, FLORIDA 32399-1925
The Issue The primary issue in this case is whether Respondent committed a violation of Section 760.10, Florida Statutes, as alleged, by terminating Petitioner because of her race and age. Respondent claims that Petitioner was terminated for a legitimate business reason, her job performance, and that other employees similarly situated were treated the same way. Petitioner admits that her sales declined, but claims that her performance was sabotaged. She also claims that white, young employees were not fired for similar performance problems.
Findings Of Fact Margarette Dublin, a black female, was born on October 24, 1932. She has a 12th grade education and a high school diploma, but no other formal education. Her work experience has been solely in retail sales. In 1965, she was working as a salesperson at McCrory's in the Big Apple Shopping Center in Titusville, Florida. George Browne, the store manager at Belk Lindsey in Titusville, personally recruited and hired her to work as a sales clerk in the women's ready-to-wear department at his store. In 1972, Dublin was promoted to buyer for women's ready-to-wear when her supervisor, Donna Smith, a white female in her mid-thirties, was terminated for poor performance (failing to stay within her buying limits and declining sales) and alcoholism. In addition to purchasing stock for her department, as buyer, Dublin was responsible for supervising the sales clerks, keeping the department organized and presentable, taking markdowns on the merchandise, and assisting with sales. Over the years, Margarette Dublin built excellent relations with certain customers. She had a pleasing and helpful personality and went out of her way to select items she knew they would like. Some of these women depended on her to establish their wardrobe. They would call her before a trip or special occasion, and she would have a selection ready when they came in. Their husbands would shop in Dublin's department for their gifts, and some would spend several hundred dollars on the clothes and accessories she picked out for them. George Browne was proud of her sales work and would call her when he saw her special customers on the floor. She received Belks' sales club certificates in 1976, 1977, 1980, 1981, 1983, 1984 and 1985, for "outstanding customer service and sales achievement." Margarette Dublin was terminated on February 22, 1986, without notice. She was given 13 weeks severance pay and approximately $23,000.00 as her share in the Belk profit-sharing program. Belk Lindsey Company of Orlando, Inc., owns department stores located primarily throughout the central Florida area. There are Belk stores throughout the southeast, but they are separate corporations. All are served by another separate corporation, Belk Stores Services, Inc., in Charlotte, North Carolina. The Belk stores operate under a merchandising system known as the "retail system," used in various forms by major retail companies in the United States. The purpose of a retail merchant is to buy and sell merchandise at a profit. Under the retail system, appropriate inventory levels are planned. Based on anticipated sales for a period, an open-to-buy account is established to allow the buyer to know how much money is available for additional purchases. By maintaining appropriate inventory levels in relationship to sales, a retailer is able to achieve a turnover in inventory which maximizes his return on the investment in the inventory. As sales are made, the sales dollars are added to the open-to-buy account in order to replace merchandise sold. The retail system uses the phrase, "You buy back your sales." Merchandise that fails to sell freezes the investment; thus markdowns are a major tool to stimulate sales. The retail system has established optimum percentages and schedules for markdowns for different types of merchandise. George Browne, the Titusville Belk store manager, understands the retail system, and in that sense, is a "good" manager. He is white and was born on July 17, 1926. He has approximately 40 years experience with Belk Lindsey and has been manager of the Titusville store since January 1960. He is in charge of the overall operation of the store and supervises the buyers and department managers. The Titusvilie store, with 45-50 employees and approximately $3 million in annual sales, is moderately sized in comparison with other Belk Lindsey stores. Browne does a good job in planning, documentation and working with people, but he has serious problems with taking decisive disciplinary action against employees. He has never single-handedly fired a manager under his supervision. He has difficulty enforcing demands. He recognizes these deficiencies in himself and relies on the advice and assistance of John Land, the Belk Lindsey Vice-President for Personnel. John Land works out of the corporate office in Tampa and has 18 years experience with Belk Lindsey. He functions as an administrative assistant to the corporation's Senior Vice-President, A. J. "Del" Finieri. He oversees the performance of the store managers and is personally familiar with their personnel and with the stores' overall operations. His birthdate is 9/30/33. In the last two years, 1987 and 1988, the Titusville store has had excellent performance. In calendar year 1987, it had the highest percent increase in sales of any other store in its size class among all Belk stores in the southeast. It was among the top twelve of all stores, regardless of class. Prior to 1987, however, the Titusville store's performance was poor. The company was dissatisfied with its sluggish sales since the late 1970's. There were problems with lack of sales, lack of inventory turnover and lack of general profitability. Other stores in the Belk Lindsey group had problems as well, but the performance of the Titusville store was poor compared to the company as a whole. While sales generally increased annually, the increases were smaller than the increases company-wide. The Belk Lindsey store managers meet annually in Tampa in February at the end of the fiscal year. They take inventory and are given their bonuses, based on the performance of their individual store. The February 1985 annual meeting was a jolt to George Browne. His store had a 1.3% increase in sales in the past (1985) fiscal year, compared to the company's overall 6.7% increase. Del Finieri told him that he was tired of defending the Titusville store's poor performance to the Belk family. Browne was told that he would have to take control of his buyers and improve gross margins. Browne had some indication previously that problems existed, but the distinct impression that he got from the 1985 meeting was that his job was on the line. John Land participated in the meeting and confirmed this. A shaken George Browne met with his buyers in Titusville the following day for their annual inventory and bonus meeting. Buyers receive a weekly salary based on the sales volume in their department, but they, too, receive year-end bonuses based on the performance (profit) in their department. At their meeting, they are given a sheet ("P. and L.") with the prior fiscal year's breakout of sales, inventory, gross margin, operating cost, profit and bonus calculations. George Browne attempted to communicate the company's dissatisfaction to his managers. The general message was "my job is on the line, but before I go, some heads are going to roll here." The buyers were each given, orally, their gross margin goals for the 1986 fiscal year (February 1985 - January 1986) Gross margins are computed by subtracting the retail cost of goods sold from the total retail sales and dividing by the sales. The Titusville store did not improve in fiscal year 1986, but rather plummeted to a 12.9% decrease in sales. The company also decreased 2.4% that year. At the February 1986 meeting in Tampa, Del Finieri told George Browne that his store's performance was unacceptable and intolerable. They went through each of the departments, and after discussing the women's department decrease of 18.9%, Browne asked Finieri, "Should we fire her?" Land asked Browne, "Is that what you want?" In the absence of a clear answer, Land asked "Do you want to do it or do you want me to?" Browne responded in stumbling terms that he would like Land to come over to help. John Land came to Titusville on Saturday, February 22, 1986. He and George Browne discussed the possibility of moving Margarette Dublin to sales in a different department. Browne felt the store was too small and said a demotion would not be in the store's best interest. Dublin was at work on Saturday morning and was called in to George Browne's office. John Land did all the talking. He told her that he had bad news, that she was being terminated for a decline in sales. She was at first incredulous, but when Land said they were serious, she became upset and left. She returned later to clean out her desk. Prior to the termination, Margarette Dublin was never specifically told orally or in writing that her job was in jeopardy. Except for a brief period in the 1970's, Belk Lindsey did not have a policy of providing performance evaluations. The company expected its managerial level employees to track their performance through the sales records of their department. These figures were available to buyers in the form of computer printouts prepared monthly. Since the buyers' compensation was based in part on those figures, they were motivated to keep track regularly. Superficially, at least, George Browne and Margarette Dublin had a good relationship. She admits that no manager or official at Belks ever made statements to her regarding her race or age. She called him, "Mr. B"; he called her, "Mar-gar-ee-ta", with a sort of Spanish accent. She knew her sales were declining, but felt that it was a store problem and that if Browne had a problem with what she was doing, he would tell her. John Land spent a lot of time at the Titusville store in 1975. He never told Dublin about problems because he felt it was Browne's job. Whenever he asked her how things were going, she would say, "fine." From time to time, Browne would discuss Dublin's inventory and open-to-buy with her. She attended buyers' meetings out of town and visited other stores. Generally, Browne left purchases entirely up to the buyers so long as they had open-to-buy available. In retrospect, George Browne believes that Margarette Dublin was complacent about the performance of her department. She understood and enjoyed sales work, but did not spend enough time managing her department. She could have earned much higher bonuses if she had spent less time selling and more time with her managerial duties. On several occasions, Browne and women from the stockroom went to the floor to take markdowns on Dublin's merchandise. He did this with other departments as well, but not as much as with the women's department. George Browne was accessible to discuss problems with his buyers. Margarette Dublin claimed that she did not ask for help as he was always in the stockroom. She admitted not questioning practices because the "boss knew best." In retrospect, Margarette Dublin believes that George Browne deliberately sabotaged her performance by refusing to allow her to make purchases, by cancelling her orders and by not giving her the sales help she needed. She felt as long as she worked at Belk that Browne was a good manager, that the morale was good and that she was liked and appreciated. Her opinion has changed during the course of litigation. Given George Browne's concern about his own job and the fact that his own compensation is tied to the performance of his store, the sabotage theory is not credible. It is undisputed that after the memorable meeting in Tampa in February 1985, George Browne took a hard look at his inventory and made a concerted effort to cut back in divisions, such as the women's ready to wear, that were overbought. Browne did cancel Dublin's orders to reduce the inventory. Cancelled orders included statements such as "Dublin, let me know" or "Dublin, suggest you cancel. Let me know by return memo." She never questioned Browne about these nor suggested that the stock was vital to her operation. Although her monthly inventories were available on a twelve month merchandise plan, Dublin was unaware of her inventory and concentrated on her open-to-buy dollars. All buyers are told to stay within their open-to-buy dollars, although on occasion, with Browne's consent, they are allowed to exceed those. Dublin was also allowed to exceed her open-to-buy. At the hearing, Dublin was unable to interpret the twelve month merchandise plan. Although approximately 43% of Dublin's purchases were mandated by Belk's statewide buyers, all store buyers were required to take mandated stock. This allowed the company to take advantage of special prices based on large quantity purchases and to engage in statewide advertising campaigns. The store buyers, including Margarette Dublin, attended buyers' meetings where the purchases were discussed and voted on. The number of sales persons in each department is dictated by that department's volume of sales. Staff allocations are determined in the same manner in each store division, although the percentages vary. When sales declined, the staff hours were cut back. Pat Carr, the office manager, computed the staff hours available for each department. She was never told to deviate from the formula in order to cut back on Dublin's staff. In her direct testimony, Dublin claimed that Pat Carr never explained to her how the payroll worked or how she got her staff. She said she was never told that if she sold more dresses she would get more help. These admissions, as well as her testimony that she was not told when she was hired that her compensation was tied to her sales, and her failure to question Browne about her cancelled orders, confirm Respondent's claims regarding Dublin's lack of initiative, her complacency and her ignorance of the management of retail sales. In fiscal year 1985, Margarette Dublin's department sold $631,691.00; her gross margin was 41.18%, and her profit before year-end expenses was $76,914.00. In fiscal year 1986, her sales dropped 18.9% to $512.532.00; her gross margin was 40.82%, and her profit before year-end expenses was $53,902.00. Her drop in sales was the largest in any Belk Lindsey women's department in 1985 and 1986, with the exception of the Gainesville store, which had a fire in 1985, and was temporarily closed. Immediately after Dublin was terminated, her successor, Anne Gillard, was hired. She had been mentioned by John Land as a replacement when George Browne was in Tampa for the February 1986 annual-meeting. She was the only candidate interviewed for the position. Anne Gillard, a white female, was born on February 14, 1954. She began working for the company in September 1982. At the time that she was hired by George Browne, she was an assistant buyer for two stores in Melbourne. Under the Belk compensation plan, she was making $255.00 base salary per week, $55.00 more than the $200.00 per week that Dublin made. Because the move to Titusville was considered a promotion, her weekly salary was not cut, but she was told by John Land that the extra would come out of her bonus at the end of the year. When that time came, the company was so pleased with her turnaround in the women's department, she was allowed to keep her full bonus. In fiscal year 1987, the first year under Gillard, the Titusville's women's department sales increased 39.4% to $714.686.00. In 1988, they increased another 17.7%, to $848.193. Anne Gillard's gross margin in 1987 was 41.14%, and profit before year-end expenses was $88,193.00. ,The profit, therefore, increased 38.8% over fiscal year 1986. Her inventory increased substantially from a beginning $81,241.00 to $125.626.00 at the end of the fiscal year, but the volume of sales supported the increase, as her profit kept pace with her rate of increase in sales. Gillard's tenure in Titusville has not been entirely problem-free. She has failed to meet her gross margin goal of 44%, and understands that her job is in jeopardy if she does not meet the goal next year. Recently she made a large (over $30,000.00) purchase of stock without George Browne's permission when she had no open-to-buy. She received a written reprimand from John Land informing her that the next violation would result in her immediate termination. Margarette Dublin was not the only buyer in the Titusville store with a substantial sales decline in 1986. Jason New, a white male, over 40 years of age, had a 7.6% decline in his men's department in 1985 and a 12.7% decline in 1986. He, also, was the subject of discussion at the February 1986 company meeting. Finieri did not want to fire him at the same time as Dublin, as New's was the largest department in the store, and the women's and men's departments produced over half of the store's sales volume. Moreover, New had been in the department only about two years, and the company felt he should have a chance to improve. New resigned in 1987 and was replaced by Darrell Pulido, a young (under 35 years) Hispanic. Velda Knight's termination was not considered. She is white and was born September 11, 1927. She is the buyer for the children's department and has been with the store for 24 years. Her sales decline in 1986 was 25.7%, substantially higher than Dublin's. The children's department has a much smaller volume than any other department in the store and is considered a "follower" department. That is, most of the sales in that department are made to customers who are in the store for other purchases. In 1987, after Anne Gillard's 39.4% increase, the children's department increased 16.4%. Other Belk managerial employees have been terminated for poor performance over the years. Dublin's predecessor was, of course, terminated for poor performance and alcoholism. Georgianna Shaw, a buyer in the Ocala store, was terminated in 1986, for a decrease in sales. She is white and was approximately 30 years old at the time of termination. She had been with the company for five years and had been a buyer for about one year. P. Ball is a white male store manager in the Cocoa store and was fifty years old when he was terminated in 1981. He had been employed by the company in 1956. His store had a slightly higher volume than the Titusville store, but had a reputation for bad profits. John Land was informed when Ball had past-due invoices. The company investigated the situation for less than a week and fired the manager without warning. Ruby Secosh, a buyer in the Titusville store, was fired in 1979 for defiance and refusal to stay within her open-to-buy. She is white and was 49 years old at the time of her termination. In the past ten years, approximately 19 management employees, other than Dublin, have been terminated by the Belk Lindsey company for performance related problems. Of these, all 19 are white, and 16 were younger than Dublin. Since 1970, approximately 23 employees, at all levels, have been terminated from the Titusville store. Twenty-two are white and 19 were younger than Dublin. Although white buyers in other Belk Lindsey women's departments had substantial decreases in 1986 and were not fired, the company had valid reasons not to terminate these individuals. Carolyn Wilson, in the Bartow store, had a 13.8% decrease in 1986; Mary Jo Robinson in the Lake Wales store had an 11.1% decrease. Both stores are located in Polk County, an economically depressed area due to problems in the citrus industry and phosphate industry. Polk County's unemployment rate was over twice that of Brevard County in the immediate preceding years. Brevard County was also affected by the freezes and canker in the citrus industry, but at the same time the Brevard County area was enjoying the economic benefit of the space industry's preparation for the Challenger launch. Belk Lindsey has written policies and procedures for establishing employees' base compensation bonuses and staffing patterns. Margarette Dublin's $200.00 per week salary, the same level throughout her fourteen years as a buyer, was consistent with that policy. So also were her bonuses and the staffing patterns in her department. Belk Lindsey, at the time of Dublin's termination, did not have a clear policy with regard to disciplinary actions. Just as the buyers were given considerable autonomy in the operation of their departments, the store managers were given the authority to manage their stores. Some managers were tough and decisive; others, like George Browne, were easy-going. In the absence of gross misconduct or illegal activity, the test of effectiveness of buyers and managers is the bottom line each year: the sales, the profit and the gross margin. George Browne failed that test, but to a greater degree so did Margarette Dublin. The company's willingness to terminate her before further action in the Titusville store was a business decision unrelated to the race or age of this employee. The abruptness and insensitivity of the manner of termination obscures, but does not obviate, that fact.
Recommendation Based on the foregoing, it is hereby, RECOMMENDED: That Petitioner's Petition for Relief be denied. DONE and RECOMMENDED this 7th day of July 1988, in Tallahassee, Florida. MARY CLARK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of July 1988. APPENDIX The following constitute my rulings on the findings of fact proposed by the parties. Petitioner's Proposed Findings of Fact Adopted in paragraph #1. Adopted in part in paragraph's #2 and #6. The fact that she was able to perform to the reasonable satisfaction of her employer is rejected as inconsistent with the weight of evidence that, at the time she was terminated, she was not performing satisfactorily. 3-7. Rejected as contrary to the weight of evidence. 8. Rejected as irrelevant. 9-10. Rejected as unsupported by the evidence. Respondent's Proposed Findings of Fact 1-2. Adopted in paragraph #1. 3. Adopted in paragraph #2. 4-5. Adopted in paragraph #3. 6-7. Adopted in paragraph #6. Adopted in paragraph #19. Adopted in paragraph #21. Rejected as unnecessary. Adopted in paragraph #37. Adopted in paragraph #36. Rejected as cumulative and unnecessary. Adopted in paragraph #37. 15-19. Adopted in substance in paragraph #34. 20-21. Adopted in substance in paragraph #38. 22-25. Adopted in substance in paragraph #35. 26-27. Rejected as unnecessary. 28. Adopted in paragraph #35. 9-30. Adopted in substance in paragraph #20. 31. Adopted in paragraph #33. 32-33. Adopted in paragraph #39. 34-36. Adopted in paragraph #31. 37. Rejected as unnecessary. 38-41. Adopted in substance in paragraph #2&. 42-45. Rejected as unnecessary. 46-47. Adopted in paragraph #23. Adopted in paragraph #25 Rejected as unnecessary. 50-52. Adopted in paragraph #29. Adopted in paragraph #32. Rejected as unnecessary. Adopted in paragraph #12. 56-57. Adopted in paragraph #8. 58. Rejected as unnecessary. 59-60. Adopted in paragraph #22. 61-64. Rejected as unnecessary. 65. Adopted in paragraph #22. 66-75. Rejected as unnecessary. 76. Adopted in paragraph #26. 77-78. Rejected as unnecessary. 79. Rejected as inconsistent with the weight of evidence. The buyers could order as long as they had "open-to-buy". 80-81. Adopted in paragraph #25. 82-93. Rejected as unnecessary. 94-95. Adopted in paragraph #25. 96-97. Rejected as unnecessary 98. Adopted in paragraph #25. 99-103. Rejected as unnecessary. 104-106. Adopted in paragraph #25. 107-116. Rejected as unnecessary. 117-118. Adopted in paragraph #22. 119-122. Rejected as unnecessary. 123-124. Adopted in substances in paragraph #14. 125. Adopted in paragraph #15. 126-128. Adopted in paragraph #16. Rejected as unnecessary. Adopted in paragraph #16. Rejected as unnecessary. The evidence never established that these written goals were given to the buyers. Adopted in paragraph #8. Rejected as irrelevant. Adopted in paragraph #9. Adopted in paragraph #11. COPIES FURNISHED: Susan K. W. Erlenbach, Esquire 503 South Palm Avenue Titusville, Florida 32796 G. Thomas Harper, Esquire Suite 300 4905 West Laurel Street Tampa, Florida 33607 Margaret Agerton Clerk Human Relations Commission 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1570 Donald A. Griffin Executive Director Human Relations Commission 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1570 Dana Baird General Counsel Human Relations Commission 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1570
The Issue The issue in this case concerns whether the Petitioner should issue a cease and desist order and/or impose sanctions against the Respondent on the basis of allegations that the Respondent, by failing to have its books, accounts, and documents available for examination and by refusing to permit an inspection of its books and records in an investigation and examination, has violated Sections 520.995(1)(a), (f), and (g), Florida Statutes.
Findings Of Fact Sometime during the month of February of 1991, Ms. Jennifer Chirolis, a Financial Investigator from the Department of Banking and Finance, visited the offices of the Barat Company. She spoke with Mr. Roque Barat and determined that the Barat Company was conducting retail installment sales without being licensed to do so under Chapter 520, Florida Statutes. Mr. Chirolis advised Mr. Roque Barat that he needed a license and asked him to cease operations until he obtained the necessary license. The Barat Company thereafter obtained the necessary license and was still licensed as of the time of the formal hearing. Thereafter, the Department received a complaint about the Barat Company from a customer. The customer's complaint was to the effect that the Barat Company had made misrepresentations concerning the fee paid by the customer. The Department initiated an "investigation" of the customer's complaint and also decided to conduct an "examination" of the Barat Company. On April 22, 1992, a Department Examiner, Mr. Lee Winters, went to the office of the Barat Company to conduct the "examination" and "investigation". The Barat Company is operated out of a small office with two employees and a few filing cabinets. When Mr. Winters arrived, employees of the Barat Company were conducting business with two customers. Mr. Winters identified himself to the employees and informed them that he had been assigned to conduct an "examination" and "investigation" of the Barat Company. A Barat Company employee, Mr. Fred Vivar, said that he could not produce the company's records without express authorization from Mr. Roque Barat, that Mr. Roque Barat was out of the country, that he could not get in touch with Mr. Roque Barat at that moment, but that when he did get in touch with him, he would advise Mr. Roque Barat of Mr. Winter's desire to examine the company's books and records. Following a number of telephone calls over a period of several days, on May 1, 1992, Mr. Vivar advised Mr. Winters that he had received authorization from Mr. Roque Barat for the Department to inspect the books and records of the Barat Company. An appointment was made for the Department to inspect the books and records on May 6, 1992, beginning at 10:00 a.m. On May 5, 1992, a letter from an attorney representing the Barat Company was hand delivered to Mr. Winters. The letter included the following paragraph: It is my understanding that you have requested the opportunity to view the records of the above-referenced company, said inspection to take place on May 6, 1992. Please be advised that if this "inspection" is purportedly being done by your agency's authority, pursuant to F.S. 520.996, that no records will be produced absent compliance by your department with F.S. 520.994 including, but not limited to, the Barat Company exercising its right to challenge said subpoena. The Department concluded from the letter of May 5, 1992, that the Barat Company not only refused to produce records without a subpoena, but that, even if served with a subpoena, the Barat Company would resist compliance with the subpoena unless and until ordered to comply by a court. For that reason the Department did not pursue the issuance of a subpoena. Mr. Winters has been involved in over one hundred "examinations" under Chapter 520, Florida Statutes. In the course of those "examinations" there have been only two licensees that did not produce their records. Those two licensees were the Barat Company and another company known as Phase One Credit. Mr. Roque Barat is an officer and director of both Phase One Credit and the Barat Company. The license of Phase One Credit was revoked for its failure to produce its books and records. The refusal to produce the books and records of the Barat Company was occasioned by an effort on the part of Mr. Roque Barat to avoid payment of "examination" fees authorized by Section 520.996, Florida Statutes. In the summer of 1992, the Barat Company filed for bankruptcy, closed down its business operations, and is currently winding up the business.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Banking and Finance issue a Final Order in this case to the following effect: Dismissing the charge that the Barat Company has violated Section 520.995(1)(a), Florida Statutes; Concluding that the Barat Company has violated Sections 520.995(1)(f) and (g), Florida Statutes, as charged in the Administrative Complaint; Imposing a penalty consisting of: (a) an administra-tive fine in the amount of one thousand dollars, and (b) revocation of the Barat Company's license; and Ordering the Barat Company to cease and desist from any further violations of Chapter 520, Florida Statutes. DONE AND ENTERED this 23rd day of February, 1993, in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of February, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-5620 The following are my specific rulings on the proposed findings of fact submitted by the parties. Proposed findings submitted by Petitioner: Paragraph 1: Rejected as constituting a conclusion of law, rather than a proposed finding of fact. Paragraphs 2, 3 and 4: Accepted in substance. Paragraph 5: Accepted in substance, with the exception of the last five words. The last five words are rejected as irrelevant to the issues in this case and as, in any event, not supported by clear and convincing evidence. Paragraph 6: Accepted in substance. Paragraph 7: First sentence accepted in substance. Second sentence rejected as irrelevant to the issues in this case. Paragraph 8: First sentence accepted. Second sentence rejected as inaccurate description of letter. (The relevant text of the letter is included in the findings of fact.) Last sentence rejected as subordinate and unnecessary evidentiary details. Paragraph 9: Rejected as irrelevant to the issues in this case. Paragraph 10: First two sentences rejected as irrelevant to the issues in this case. Last two sentences accepted in substance. Paragraph 11: Accepted in substance. Paragraph 12: First sentence accepted in substance. Second sentence rejected as irrelevant to the issues in this case. Paragraph 13: Accepted. Proposed findings submitted by Respondent: As noted in the Preliminary Statement portion of this Recommended Order, the Respondent's proposed recommended order was filed late. The Respondent's proposed recommended order also fails to comply with the requirements of Rule 60Q-2.031, Florida Administrative Code, in that it fails to contain citations to the portions of the record that support its proposed findings of fact. A party's statutory right to a specific ruling on each proposed finding submitted by the party is limited to those circumstances when the proposed findings are submitted within the established deadlines and in conformity with applicable rules. See Section 120.59(2), Florida Statutes, and Forrester v. Career Service Commission, 361 So.2d 220 (Fla. 1st DCA 1978), in which the court held, inter alia, that a party is not entitled to more than a reasonable period of time within which to submit its proposals. Because the Respondent submitted its proposals late and because those proposals fail to comply with the requirements of Rule 60Q-2.031, Florida Administrative Code, the Respondent is not statutorily entitled to a specific ruling on each of its proposed findings and no such specific findings have been made. (As noted in the Preliminary Statement, the Respondent's proposed recommended order has been read and considered.) COPIES FURNISHED: Ron Brenner, Esquire Office of the Comptroller 401 Northwest 2nd Avenue Suite 708-N Miami, Florida 33128 Louis J. Terminello, Esquire 950 South Miami Avenue Miami, Florida 33130 Michael H. Tarkoff, Esquire 2601 South Bayshore Drive Suite 1400 Coconut Grove, Florida 33133 Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Copies furnished continued: William G. Reeves, General Counsel Office of the Comptroller The Capitol, Room 1302 Tallahassee, Florida 32399-0350
The Issue Whether Respondent discriminated against Petitioner based upon sex, race, or disability and/or retaliated against her for engaging in a protected activity.
Findings Of Fact Based on the testimony and exhibits admitted at the final hearing, the following Findings of Fact are made. Petitioner’s Background At all times material to this matter, Petitioner identified as a Caucasian woman. In February of 2020, Ms. Smith was diagnosed with Hashimoto’s disease.3 Ms. Smith’s Hashimoto’s disease, when active, causes her to experience debilitating fatigue, gastric problems, muscle aches, headaches, and hair loss. Her condition, when active, substantially limited several of Ms. Smith’s major life activities, including the ability to function on even a basic level. Ms. Smith testified that she requires treatment from a doctor to manage and minimize the most debilitating aspects of her condition. Ms. Smith was hired by Cellular Sales in 2016, as a sales representative. In October 2018, Ms. Smith moved to Florida and was transferred to a Cellular Sales location in Florida. In December 2019, Ms. Smith was transferred to the Cellular Sales location in the Brandon Town Center Mall (Brandon Mall) in Brandon, Florida. Ms. Smith was then promoted to assistant store manager at that location. As a sales representative, Ms. Smith was responsible for sales, client services, and developing sales leads. She had the same responsibilities as a store lead. 3 Hashimoto’s disease is a condition that causes one’s immune system to attack one’s thyroid. During Ms. Smith’s employment with Cellular Sales, she never received disciplinary action. Cellular Sales Policies and Procedures Respondent, Cellular Sales, sells Verizon Wireless products, services, and accessories. The Cellular Sales Employee Handbook contains a Pyramid of Ethics, which prohibits employees from “discriminating, offensive, abusive, or harassing behavior and/or language” against another employee and prohibits “retaliation against those who report suspected violations of law or Company policy.” Cellular Sales also maintains an open-door policy, which directs employees to notify a supervisor, contact the corporate human resources department, or submit a complaint via the Report It Hotline, if they have any concerns about their employment or policy violations. Cellular Sales also maintains an Equal Employment Opportunity policy which prohibits discrimination based, among other characteristics, on sex, national origin, disability. The Individuals With Disabilities policy directs employees to notify both their supervisor and the corporate human resources department of any reasonable accommodation requests so that they can be addressed by the human resources department. Ms. Smith received and signed for a copy of the Employee Handbook when she began working for Cellular Sales in 2016 and received an updated copy of the handbook in 2017. She also received annual training on the company’s policies, including those related to the prevention of discrimination. All managers that were involved in this matter also received annual training on Cellular Sale’s policies. Brandon Mall Managers Mr. Abujbara identifies as a male of Arab national origin. Prior to working at the Brandon Mall, Ms. Smith worked with Mr. Abujbara at a Cellular Sales location in the Central Florida market. Mr. Abujbara became the store lead at the Brandon Mall store at the end of 2019. When Mr. Abujbara became the Brandon Mall Store Manager, he selected the sales representatives that he wanted on his team, which included Ms. Smith, an African-American female, and another Caucasian female. Mr. Abujbara also promoted Ms. Smith to be the assistant team lead. Mr. Abujbara did not select a male of Arab origin for the position. Mr. Abujbara was later promoted to store manager at the Brandon Mall. During Mr. Abujbara’s tenure as store manager, Ms. Smith received scheduling privileges as a result of her position as store lead. In June 2020, Mr. Abujbara was promoted to general manager. As a result of Mr. Abujbara’s promotion, Mr. Alabed became interim store lead for the last two weeks of June 2020. Business Practice for Cellular Sales During COVID-19 At some point, the Brandon Mall store closed for a period of time due to the COVID-19 pandemic. Employees were given the option to accept COVID-19 leave pay during that time. Ms. Smith accepted the paid leave. Mr. Walkover testified that the pandemic changed the Cellular Sales business, especially at the Brandon Mall location, because it could not depend on traffic walking in the door. It required Cellular Sales to be creative in the way it drove traffic to its locations. Cellular Sales implemented new performance standards, including a goal for sales representatives to make a minimum number of weekly phone calls. Mr. Crutcher, the regional director, e-mailed the Central Florida market about the new sales calls standards. He instructed sales representatives that “[e]very sales rep will be responsible to make at least 10 calls each week – this will be tracked and credited weekly to keep our leads list from running dry.” The new performance standard was effective starting May 1, 2020. Ms. Smith acknowledged that she received the email. Notably, the email did not indicate which day would mark the end of the week. All sales representatives were required to make the calls through a program called RingCentral, a voiceover IP phone application that allows Cellular Sales to track and monitor calls. The sales representatives could use RingCentral to make calls outside the store as well. RingCentral also has a built-in team chat allowing communications among the sales team. Mr. Abujbara’s used the RingCentral chat feature to communicate with his sales team at the Brandon Mall. On May 16, 2020, Mr. Abujbara sent at least two specific messages to his sales team using RingCentral which stated: First Message: “[t]he market-wide standard for outbound phone calls through ring central from our leads app is 10 per week. These will be monitored weekly and write ups will be issued at the end of the week for all that do not meet this minimum expectation of 10 calls.” Second message: “This week. Calls are due by Friday.” On May 21, 2020, Mr. Abujbara sent a reminder message that stated: “Minimum expectations/n10 calls for the week due tomorrow/n Total of 40 by end of month due on 31st Any issues with leads or powerapp reach out to Mo Khalel and communicate with me.” In addition to the messages, two other members of the Brandon Mall sales team testified that Mr. Abujbara also announced the Friday deadline in a meeting. Ms. Smith testified that she did not receive the RingCentral messages that the calls were due on Fridays. The undersigned finds that there is competent substantial evidence to demonstrate that Mr. Abujbara provided timely and sufficient notice, using the method of communication commonly used by his team, that the sales call deadline was Friday of each week. Ms. Smith’s Work Performance and Discipline History Ms. Smith made 10 calls for the first, second, and fourth weeks of May 2020. In these weeks she worked two shifts, three shifts, and four shifts, respectively. However, she made seven calls the third week of May 2020. Thus, she failed to meet the minimum 10 calls goal by Friday for the third week of May 2020. Ms. Smith testified that she missed work days the third week of May 2020 because she had “doctors’ appointments.” Ms. Smith testified that she had a chiropractor appointment that week and that she regularly gets blood work. The evidence offered at hearing was not sufficient to rebut her testimony and thus, it is credited. However, even if Ms. Smith had an appointment the third week of May, there was no credible evidence that anyone else at Cellular Sales had knowledge that she had an appointment the third week or that she missed her sales goals as a result of the appointment. On May 23, 2020, Mr. Abujbara sent Ms. Smith an e-mail with a Disciplinary Action Form. The disciplinary action was for insubordination in a meeting and for failing to make the required minimum 10 calls the third week of May 2020.4 Ms. Smith was then placed on a performance plan which stated the following, “[g]oing forward we need to make sure that you are attaining minimum standard for phone calls on a weekly basis … .” 4 The third week in May 2020 ended on May 22, 2020. After receiving the email containing the disciplinary action on May 23, Ms. Smith disputed the basis for the action. The text exchange between Ms. Smith and Mr. Abujbara was as follows: Ms. Smith: Give me a call when you can. I have 9 completed calls for the week Mr. Abujbara: Hey I’m out of the office until Monday for religious purposes. I will follow-up with you Monday when I return. Ms. Smith: I will accept the write up for the calls. But I will be having extensive conversation with you, Eric Brown or Eric Walkover regarding what is happening at this store. So please get back to me when you can. Ms. Smith then texted Mr. Brown on the same date. The text exchange in pertinent part was as follows: Ms. Smith: Also, are calls due on Friday or By end of day Saturday? Since the week technically ends on Saturday. Mr. Brown: Technically the original email was sent Friday. It should have been discussed at your draft as well that day so we have been running it Friday to Friday. Ms. Smith: Okay. I made 8 calls this weeks because we got slammed yesterday as I was finishing them. So to avoid a write up I was wondering if I could have today to complete them. Ms. Smith never told Mr. Abujbara or Mr. Brown that the reason for missing the call goal was due to her medical condition or related appointments, discrimination, or retaliation. Ms. Smith also disputed the disciplinary action with Mr. Walkover stating that she got her calls done by Saturday and should not have received the disciplinary action. Mr. Walkover told her that she missed the deadline, which was Friday. Like with Mr. Abujbara and Mr. Brown, Ms. Smith also never told Mr. Walkover that she did not meet her sales call goal because she had a medical appointment, nor did she complain that the disciplinary action was based on discrimination. Similar to the failure to make calls, Ms. Smith also contested the insubordination claim. Mr. Abujbara described her insubordination and unprofessional conduct that stemmed from her behavior during a team meeting where she expressed her disagreement5 with the new “chumming” policy. “Chumming” refers to the process of greeting and engaging clients in front of the store to attempt to bring them in for sales. Each sales representative working on that day would share in the commission for that sale. The new chumming policy for the Brandon Mall store permitted a sales representative who brought in a customer and closed a sale to keep the commission for the sale. Thus, the other sales representatives would not share the commissions for that sale. Mr. Brown created the policy because the store’s numbers were struggling with sales and he wanted to incentivize the sales representatives to attract customers that otherwise would not shop in the store. It was known amongst Ms. Smith’s coworkers that she did not like chumming and did not chum often. More importantly, she never requested an accommodation for chumming due to a disability or medical condition. Reading Book While at Work In June 2020, Mr. Abujbara was promoted to general manager and Mr. Alabed became the interim store lead at the Brandon Mall store. Ms. Smith wanted Mr. Alabed to be the store manager of the Brandon Mall store. Mr. Alabed testified that during the time he was the interim store lead, he had no knowledge that Ms. Smith had an autoimmune disease. 5 Petitioner’s former coworker, Mr. Sanchez confirmed that she was disrespectful to Mr. Abujbara in the meeting by interrupting him and complaining about the rule. On June 19, 2020, Mr. Alabed observed Ms. Smith reading a book on the sales floor while she was on duty. Instead of sending her home, Mr. Alabed directed her to put the book away and to begin “chumming.” Ms. Smith went into the mall area to chum but then, returned to reading her book. Given Ms. Smith’s failure to follow Mr. Alabed’s instructions, Mr. Alabed then took a picture of Ms. Smith reading, sent it to Mr. Brown, and notified him of Ms. Smith’s actions. The following day, on June 20, 2020, for the second time, Mr. Alabed observed Ms. Smith reading a book on the sales floor while on duty. On this day, customers were in the store. Mr. Alabed took a picture of Ms. Smith reading on that day and sent it to Mr. Brown. Mr. Brown called Mr. Walkover, both times he learned of Ms. Smith’s behavior, to inform him that Ms. Smith was reading a book on the sales floor and was not participating in team activities. Mr. Brown also sent the pictures of Ms. Smith reading a book to Mr. Walkover. Mr. Walkover contacted Mr. Jenkins to seek further advice regarding Ms. Smith’s actions. Mr. Jenkins testified that Mr. Walkover related to him that a sales representative was observed reading a book two days in a row on the sales floor, and that she was on a performance plan for not meeting phone call requirements. Mr. Walkover also sent the pictures to Mr. Jenkins that he received from Mr. Alabed. Mr. Walkover was concerned that Ms. Smith was not working while sitting at the desk reading a book. He believed her reading a book was also distracting to the rest of the team. He was also concerned that she had previously missed the minimum phone call expectations, for which she was on a performance plan. Mr. Jenkins told Mr. Walkover he would investigate Ms. Smith’s actions. Mr. Jenkins confirmed that Ms. Smith had been written up less than 30 days earlier for not making her minimum phone calls and that a security video showed her reading a book on the sales floor with customers in the store. Mr. Jenkins showed Mr. Walkover the security video. The video, from June 20, 2020, clearly shows Ms. Smith reading a book at her desk, while customers were in the store and other employees were working. After his investigation, Mr. Jenkins determined that Ms. Smith’s actions warranted termination. To ensure he was making the appropriate decision, Mr. Jenkins decided to speak with the corporate human resources department. Mr. Jenkins and Mr. Walkover called Ms. Calvert and explained the facts related to Ms. Smith, i.e., the employee was on a performance plan, reading a book twice while on duty and had a medical condition. Ms. Calvert affirmed Mr. Jenkin’s decision to terminate Ms. Smith because the decision was related to her work performance and behavior and not related to her medical condition. Mr. Jenkins shared his decision with Mr. Walkover and ultimately, Mr. Brown was directed to meet with Ms. Smith to terminate her. On June 24, 2020, Mr. Brown met with Ms. Smith to notify her that she was terminated and presented her with paperwork outlining the reasons for her termination. Ms. Smith opposed her termination on the basis that other employees engaged in non-work-related activities on the sales floor. She testified that other employees played games on their phones or watched movies. Mr. Walkover testified that sales representatives are expected to either be selling phones or gathering sales leads while at work. If they do not have a client in front of them, their job is to do what they can to try to draw in a client. Sales representatives were not permitted to watch movies, read books, or play games. He did note, however, that on occasion, employees were permitted to use their phones to direct business to the store. Ms. Smith admits that she openly read a book to learn more about her medical condition while at work on two separate days. Ms. Smith’s Disability The record is not clear regarding when Ms. Smith was first diagnosed with a thyroid condition. However, her medical records reflect a doctor’s visit of April 16, 2020, in which Ms. Smith was diagnosed with a thyroid condition. Ms. Smith testified that she notified her supervisors about her medical condition and about her periodic need to go to doctors’ appointments in order to keep her medical condition under control. Mr. Alabed testified that he was not aware of Ms. Smith’s condition. Ms. Smith testified that she was diagnosed with Hashimoto’s disease, and, a few months later, with Lupus. Throughout her employment, Mr. Abujbara gave Ms. Smith time off for medical appointments and other reasons, including for a car accident. At some point, Ms. Smith informed Mr. Abujbara that she thought she had Lupus and may need some time for doctors’ appointments. Mr. Abujbara asked if Ms. Smith needed shifts off, said he would help her get them covered, and to let him know of anything else he could do. Mr. Abujbara then contacted Mr. Jenkins to inform him they had a sales representative who was diagnosed with Lupus and needed guidance with how to assist her. Mr. Jenkins instructed Mr. Abujbara to contact Mr. Holloway, a sales representative who also serves as the Employee Relations Ambassador. He is responsible for talking to employees about their well-being and helping them get counseling services or Family Medical Leave Act (FMLA). Mr. Abujbara reached out to Mr. Holloway to inform him that Ms. Smith had some health conditions and may need assistance with FMLA. Mr. Holloway told Mr. Abujbara to provide Ms. Smith with his (Mr. Holloway’s) contact information to reach out to him so they could start the process for FMLA. The record contains extensive testimony about referring Ms. Smith for FMLA assistance. However, there is no mention about assistance for Ms. Smith regarding a request for a reasonable accommodation. Ms. Smith testified that she did not request FMLA; she was seeking a reasonable accommodation due to her disability. The undersigned finds Ms. Smith requested a reasonable accommodation in the form of intermittent leave for doctors’ appointments to treat her condition. Mr. Holloway e-mailed Ms. Vissicchio, who assists with FMLA requests. On June 19, 2021, Ms. Vissicchio e-mailed Ms. Smith, requesting information for her leave. Ms. Smith responded, “I do not currently need days.” On June 22, 2021, Ms. Vissichio followed up with an email as follows: “I didn’t file anything yet since you said you currently do not needs days off. Once I file they will require a dr evaluation and note and the paperwork filled out. Please let me know when that is all done and then I can put you in for intermittent FMLA in case future days are needed.” Ms. Smith replied to Ms. Vissichio as follows: “The days off most likely will not be in bulk. This is more of a long term condition. Will be seeing the doctors again these next two weeks. I can have them fill out the paper work. The days I need off this month have been covered.” Ms. Vissicchio testified that she did not file anything at that point because Ms. Smith was not requesting time off and the Cellular Sales’ third- party administrator that processes FMLA requests would deny a request without receiving supporting paperwork within 15 days of submitting the request. Ms. Smith did not complain to Ms. Vissicchio, who works in human resources, about discrimination based on her race, sex, or disability. Proposed Comparators At the hearing, Ms. Smith offered Ameer Salti and Mohammed Zarour as comparators to establish that she was treated differently than other employees. Mr. Salti was a sales representative with Cellular Sales. He received disciplinary action for insubordination because he refused to assist a client. He was instructed to go home for the remainder of his shift, on December 30, 2019. On March 17, 2020, Mr. Salti was disciplined a second time for making a client wait on an appointment, leaving his work station messy, and coming to work in flip flops. He was suspended for two weeks. On November 18, 2020, Mr. Salti was terminated for a failed drug screen. Cellular Sales maintains a drug-free workplace policy that subjects an employee to immediate termination for violation of the policy. Mr. Zarour, also a sales representative, was disciplined and terminated as well. He was disciplined on June 6, 2020, for failing to make 40 calls in May 2020. The evidence established that Mr. Zarour made 18 calls the third week of May. However, he failed to meet the required 40 calls per month. The simple math establishes that at least on one week, Mr. Zarour failed to meet the 10 calls minimum. However, the competent substantial evidence did not establish whether he failed to meet the minimum the fourth week (at the end of the month) or a different week. Thus, the evidence is not sufficient to establish that he was not disciplined for his failure to meet the minimum weekly call goals. However, the evidence did establish that he was disciplined for failing to meet required minimum sales calls. On July 27, 2020, Mr. Zarour was terminated by Eric Brown and Eric Walkover for policy violations, not dropping cash, not dropping trades, and failure to meet minimum call goals. Similar to Ms. Smith, Mr. Zarour was disciplined for failing to meet the minimum sales calls. However, there were no other similarities in behavior as Ms. Smith. In fact, neither of the offered comparators was observed reading a book two days in a row on the sales floor. There was discussion in Petitioner’s PRO pertaining to progressive discipline. While progressive discipline was not a Cellular Sales policy, Mr. Jenkins testified that Ms. Smith’s behavior warranted termination. Ultimate Findings of Fact Ms. Smith admitted she never complained about discrimination or retaliation to the human resources department or the Report It Hotline. She also admitted that she did not complain to anyone at Cellular Sales regarding discrimination or retaliation, or that a male of Arab national origin, or a non- disabled employee received better treatment. Ms. Smith admitted that she was reading a book on the sales floor on two separate, consecutive days. The evidence offered does not support a finding that Cellular Sales treated Ms. Smith differently than males of Arab national origin, or disabled employees. The evidence offered at hearing did not support a finding that Cellular Sales retaliated against Ms. Smith for engaging in a protected employment action. The evidence demonstrated that Ms. Smith was terminated for failing to meet workplace performance goals and reading a book on the sales floor on two days while on duty.
Conclusions For Petitioner: James Moten Thompson, Esquire Thompson Legal Center, LLC Suite 245 777 South Harbour Island Boulevard Tampa, Florida 33602 For Respondent2: Robert L. Bowman, Esquire Bryce E. Fitzgerald, Esquire Kramer Rayson LLP Suite 2500 800 South Gay Street Knoxville, Tennessee 37929 1 The hearing was conducted in person. However, the court reporter and one witness (Peggy Vissicchio) attended by Zoom conference. 2 The Respondent was represented by Robert L. Bowman and Bryce E Fitzgerald who were accepted as qualified representatives in this matter.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations issue a final order finding that Petitioner, Jaqueline Smith, did not prove that Respondent, Cellular Sales Services Group, LLC, committed an unlawful employment practice against her; and dismissing her Petition for Relief from an unlawful employment practice. DONE AND ENTERED this 20th day of December, 2021, in Tallahassee, Leon County, Florida. S YOLONDA Y. GREEN Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of December, 2021. COPIES FURNISHED: Tammy S. Barton, Agency Clerk Florida Commission on Human Relations Room 110 4075 Esplanade Way Tallahassee, Florida 32399-7020 Samuel J. Horovitz, Esquire Rogers Towers, P.A. Suite 1500 1301 Riverplace Boulevard Jacksonville, Florida 32207 James Moten Thompson, Esquire Thompson Legal Center, LLC. Suite 245 777 South Harbour Island Boulevard Tampa, Florida 33602 Robert L. Bowman, Esquire Kramer Rayson LLP Suite 2500 800 South Gay Street Knoxville, Tennessee 37929 Lori S. Patterson, Esquire Rogers Towers, P.A. Suite 1500 1301 Riverplace Boulevard Jacksonville, Florida 32207 Stanley Gorsica, General Counsel Florida Commission on Human Relations 4075 Esplanade Way, Room 110 Tallahassee, Florida 32399 Bryce Ellsworth Fitzgerald, Esquire Kramer Rayson LLP Suite 2500 800 South Gay Street Knoxville, Tennessee 37929
The Issue The issue for consideration in this matter is whether Petitioner, Classie Sales, Inc. (Classie), is entitled to be compensated for produce sold and delivered to Respondent, Tolar Farms (Tolar), and if so, in what amount.
Findings Of Fact On June 30, 1990, Roger Harloff, on behalf of Roger Harloff Farms, and John A. Tipton, Secretary of Classie Sales, Incorporated, a sales agent founded by Harloff, entered into a written agreement whereby Classie would serve as sales agent for all sales of produce grown by or on Roger Harloff Farms. Between October 17, 1995 and December 9, 1995, Classie, on behalf of Roger Harloff Farms, sold watermelons with a total net sales price of $170,839.27 and tomatoes with a total net value of $1,720.00 to Tolar Farms. These sales were not direct sales to Tolar but transactions wherein Tolar was to sell the produce to whomever would buy it at an agreed price and would withhold its 3/4 per pound commission from the sales price, remitting the balance to Classie. Trucks arranged for by Tolar picked the produce up at the growing field and at the time of pickup, Classie issued to Tolar a packet jacket for each load sold. As the loads were sold Tolar would issue a ticket for that load which bore the shipping date, the lot number, the farmer, the transporting trailer's tag, the truck broker, the truck driver, and the weight of the product. Sometime later, when the produce was sold, Tolar issued an invoice bearing Classie Sales' logo, reflecting Tolar as the buyer and showing the lot number which corresponded to the load ticket, the shipping date, a description of the produce, the quantity, the unit price for that load, and the extended price from which was deducted Tolar's commission and an unspecified assessment. These documents were then forwarded to Classie. The terms of the sale between Tolar and Classie, on behalf of Harloff, were loose. The invoice documents reflected a net due 21 days after invoice date. The first delivery in issue here was made on October 17, 1995, and 21 days after that is November 7, 1995. The amount reflected by the deliveries made after that date is $27,509.72. Respondent, Preferred, claims that since Classie continued to make deliveries to Tolar's drivers after it was not paid within 21 days after the first shipment, it failed to mitigate its damages and should not be paid for any deliveries made after November 7, 1995. Classie was not paid for any of the instant invoices by Tolar, but Classie did not become concerned about Tolar's failure to make timely payment until January 1996. Tolar's payment and pricing practices were no different during this time than in years past. Typically, Tolar would start out quickly notifying Classie of the sales. As the number of shipments grew, however, the time for notification grew longer. It must be noted that less than two months transpired from the date of the first shipment in issue to the last.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Agriculture enter a Final Order in this matter directing Tony and Robert Tolar, d/b/a Tolar Farms, to pay Classie Sales, Inc., the sum of $172,559.27. In the event this sum is not paid by Tolar, the Department should apply the bond posted by Preferred National Insurance Company in the amount of $75,000.00. DONE and ENTERED this 15th day of July, 1996, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of July, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 96-1776A To comply with the requirements of Section 120.59(2), Florida Statutes (1995), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1. - 13. Accepted and incorporated herein. Accepted and incorporated herein as the testimony of the witness. Not a Finding of Fact but a comment on the issues. Accepted and incorporated herein. Respondent Preferred's Proposed Findings of Fact. Preferred accepted all of Classie's Proposed Findings of Fact but suggested an amendment to Number 14. The suggested amendment was made a part of the Findings of Fact made by the Hearing Officer. Respondent Tolar's Proposed Findings of Fact: Tolar consented and agreed to all Petitioner's Proposed Findings of Fact except for Number 9. The substance of Tolar's objection to Classie's Number 9, relating to a provision for a commission, has been made a part of the Findings of Fact of the Hearing Officer. COPIES FURNISHED: Hywel Leonard, Esquire Carlton Fields Post Office Box 3239 Tampa, Florida 33601-3239 Scott R. Teach, Esquire Meuers and Associates, P.A. 2590 Golden Gate Parkway, Suite 109 Naples, Florida 34106 David A. Higley, Esquire Higley and Barfield, P.A. The Maitland Forum 2600 Lake Lucien Drive, Suite 237 Maitland, Florida 32751-7234 Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler General Counsel Department of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Bureau of Licensing and Bond Department of Agriculture 508 Mayo Building Tallahassee, Florida 32399-0800
