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Doug Murphy v. Kmart Corporation

March 14, 2011

DOUG MURPHY,
PLAINTIFF,
v.
KMART CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Jeffrey L. VIKEN United States District Judge

ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

INTRODUCTION

This matter is before the court pursuant to defendant's motion for summary judgment. (Docket 180). Plaintiff resists defendant's motion in its entirety. (Docket 194). This matter has been fully briefed and is ripe for adjudication.

UNDISPUTED MATERIAL FACTS

The following recitation consists of material facts undisputed by the parties. These facts are contained in defendant's statement of undisputed material facts (Docket 182), as admitted to in plaintiff's response (Docket 197).

Plaintiff Doug Murphy began working for Kmart Corporation ("Kmart") in 1975 as an assistant management trainee. Mr. Murphy worked in a variety of positions at different store locations, but spent the last ten years of his employment as the store manager of the Rapid City Kmart in Rapid City, South Dakota. The Rapid City store is within Kmart's District 914.

Kmart distributes copies of its Associate Handbook ("handbook") and Code of Conduct ("code") to its employees. Mr. Murphy periodically received copies of the handbook and code, and he knew copies of the handbook were available in each store. The handbook sets forth Kmart's longstanding policy of providing a workplace free from all forms of unlawful discrimination and harassment. The code also expresses Kmart's commitment to a discrimination-free workplace. Both publications describe a reporting procedure for employees who suspect a violation of these anti-discrimination policies.*fn1

Employees should report any suspected violation to their store manager, their district manager, the office of compliance, or a toll-free ethics and compliance helpline. Mr. Murphy received training on and was fully aware of these anti-discrimination policies and reporting procedures.

Mr. Murphy's responsibilities as a store manager included the following: adhering to and enforcing anti-discrimination policies; implementing corporate merchandising programs and directives; emphasizing customer care standards; maintaining the appearance of the store; and keeping the store well merchandised and stocked.

Mr. Murphy received "marginal," "below expectations," "needs improvement," or "unsatisfactory" ratings in at least one category of his performance reviews for the years 1987 through 1993, 1996, 1999, and 2003. For example, Mr. Murphy's performance review for the 2003 fiscal year, prepared in early 2004, contained an "unsatisfactory" rating in the category "Drive for Results," a rating based on an 11.5 percent decrease in sales in the Rapid City Kmart for the 2003 fiscal year.*fn2

In June 2004, at age 49, Jerry Rudrude became the district manager for District 914. Mr. Rudrude thus became Mr. Murphy's direct supervisor. Later in 2004, Jesse Gonzalez became the regional manager for the region encompassing District 914. Mr. Gonzalez was Mr. Rudrude's direct supervisor.

Mr. Rudrude visited the Rapid City Kmart six times between June 2004 and August 2005, observing and providing feedback on areas in need of improvement. Mr. Rudrude noted similar issues during each visit.*fn3 On July 2, 2004, and September 1, 2004, Mr. Rudrude noted areas for improvement.*fn4 On October 7, 2004, Mr. Rudrude noted the store needed improvement in the following areas: painting and maintenance of the front end, counters and dressing rooms; repair of store fixtures; and merchandise organization. In January of 2005, Mr. Rudrude noted the outside curbs were in disrepair and rated the store a "C-." On February 2, 2005, Mr. Rudrude noted issues with lengthy checkout lines, incomplete store layouts, and inadequate staffing.*fn5 In April 2005, Mr. Rudrude noted issues with merchandise presentation and store cleanliness. Mr. Murphy received feedback following each store visit and attempted to correct the noted issues.

In early 2005, Mr. Rudrude evaluated Mr. Murphy's performance for the 2004 fiscal year. He provided Mr. Murphy with additional suggestions for improvement, but rated Mr. Murphy as "Effective" or "Very Effective" in individual categories and "Effective" overall. In April 2005, Mr. Rudrude noted issues with merchandise presentation and store cleanliness. Mr. Rudrude provided feedback to Mr. Murphy following each visit, and Mr. Murphy attempted to correct the noted issues.

From June to mid-July of 2005, Mr. Rudrude did not visit stores or regularly report to his office due to complications following a medical procedure. Instead, Bob Cline, the loss prevention manager for District 914, visited the stores and communicated his observations to Mr. Rudrude by, in part, sending photographs.

On August 2, 2005, Mr. Rudrude and Mr. Gonzalez visited the Rapid City Kmart.*fn6 This visit was unannounced. Mr. Rudrude and Mr. Gonzalez noted issues with the following: burned out lights; a dirty service desk, sidewalks, and fixtures; a messy jewelry area; dirty seasonal items strewn about the outside of the store; insufficient number of promotional items and signage; improper stocking; disheveled end caps, layouts, and other merchandising displays and promotions; excessive staffing; and poor customer service by store associates who failed to greet customers and who wore dirty vests without proper name tags.*fn7 Mr. Rudrude and Mr. Gonzalez rated the store an "F."*fn8

Mr. Rudrude placed Mr. Murphy on a Developmental Plan of Action ("DPA").*fn9 On August 8, 2005, Mr. Rudrude and Mr. Murphy met to discuss the DPA. Mr. Rudrude explained the goal of the DPA was to correct and improve Mr. Murphy's performance. The DPA highlighted specific performance concerns and set forth steps for improvement.*fn10 Mr. Murphy understood his performance would be reevaluated periodically.*fn11

On October 7, 2005, after at least two additional store visits, Mr. Rudrude and Mr. Murphy met to review Mr. Murphy's progress on the DPA. Mr. Rudrude noted Mr. Murphy's performance had not significantly improved and many issues had not been resolved, including problems with merchandise assortment and replenishment, store appearance (maintenance and cleanliness), and customer service.*fn12 On September 22, 2005, Mr. Rudrude drafted a Notice ...

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