The big stink at Darius D'Amore's Fragrances, Inc.
Armandi, Barry ; Sherman, Herbert ; Rowley, Daniel J. 等
CASE DESCRIPTION
This is a field-based disguised case which describes treatment of employees within Darius D'Amore's Financial Administration Division. The case describes a brief history of several employees who filed a lawsuit against the firm claiming racial, disability and gender discrimination after they were overlooked for promotion, or were poorly treated, and eventually terminated.
The case has a difficulty level appropriate for a junior level course in human resource management, business ethics, or principles of management. The case is designed to be taught in one class periods (may vary from fifty-five minutes to eighty minutes depending upon the course structure and the instructional approach employed) and is expected to require between four to six hours of outside preparation by students.
CASE SYNOPSIS
Derived from observation and field interviews, the case describes the plight of several workers within Darius D'Amore's Financial Administration Division and what incidents lead to their eventually filing a lawsuit against the firm. Rich Rogers, 43, had been with the company as a supervisor in the Corporate Credit Department since 1997. Mr. Rogers, a white male, had his Bachelor's degree in management and was enrolled in an MBA program at a local University. Rogers was fighting stage 4-lung cancer since 1996. His condition was not revealed to the Company or his co-workers until 1998. He made his condition known at that time because he needed to take a two-month leave to have bilateral lung surgery. Mr. Rogers, on several occasions, felt that he was passed over for promotion because of his illness and questioned why he was training his supervisors if he wasn't qualified for the job. When Rogers brought up several racial incidents to the head of the Division, Kevin Simmons, he was told to mind his own business and that no matter how hard you work, you will never be promoted. Several other racial and discriminatory incidents occurred that impacted and/or were observed by Les Ford, a 44 year old African American employee, and Jasmine Young, a 25 year old African American female. Their complaints to both management and human resource management went unheeded and eventually Rogers and Young were fired while Ford quit. The case ends with the three of them bringing a lawsuit against the firm.
INTRODUCTION
"The Job Position Opening Policy is to first post the job internally and if no qualified candidate is found, then the open position will be announced to the general public," stated Jeff Juda, Chief Financial Officer of Darius D'Amore, at a Finance Department meeting. "Likewise," he continued, "we fully abide by and support all laws and rules governing employment, especially those from the EEOC."
"What a load of bull!" whispered Rich Rogers to Les Ford. "Juda probably doesn't know what the hell's been going on in his own Department! But he will soon," responded Les.
BACKGROUND
The Darius D'Amore Company was one of the world's leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products. Darius and Dante D'Amore founded the Company in New York City in 1945. Its products were sold in over 120 countries and territories under the following brand names: Darius D'Amore, Darius, Dante, Beginnings, Inferno, Heaven, Cleanique, Zodiac, Avalon, Madeline and Seasons. Each division had its own specific and unique image, advertising and merchandising strategy.
The Company was headquartered in New York City, with manufacturing facilities located in the United States, Belgium, Switzerland, the United Kingdom and Canada. The Company went international in London in 1960 and established a presence in Hong Kong in 1961. There were approximately 20,000 full-time employees worldwide. The Company was publicly traded since November 1990, with members of the D'Amore family owning a majority of stock.
The Darius D'Amore Company sold its products through limited distribution channels, consisting mainly of upscale department stores (i.e. Macy's, Lord and Taylor), specialty retailers (i.e. Nieman-Marcus, Nordstrom's), international perfumeries and pharmacies and, to a lesser extent, freestanding company stores, spas and duty-free shops. Upon acquiring Madeline and Avalon, the Company entered two new channels of distribution: self-select retail (i.e. Wal-Mart) and professional hair salons. In November 1998, the Company began to sell certain products over the Internet.
Darius D'Amore, the flagship brand of the Company was founded in 1945. It marketed women's makeup, fragrance and skincare products, as well as men's fragrances and grooming products. The Darius D'Amore brand was known for the high quality, innovative and technologically advanced products it provided its customers. Darius D'Amore was sold in over 14,000 stores in more than 120 countries and territories and had nine full-service day spas in cities across the United States and in Toronto, Canada. In addition, it owned and operated two freestanding stores, one in Las Vegas and one in Youngtown, New York.
In fiscal year 2004, net sales for the Company were $5.2 billion. Net earnings were $428 million. The Darius D'Amore Company had more than 48 years of consecutive annual sales increases. The Darius D'Amore brand alone had global net sales of $2.5 billion. Net earnings were $282.4 million. A note for fiscal year 2003 reads, "Information includes the effect of a special charge of $22.0 million ($13.5 million after-tax) ... related to the proposed settlement of a legal action."
ORGANIZATIONAL STRUCTURE
Darius D'Amore owned or was the licensee to 21 companies. Each company or brand acted as a separate and distinguishable entity with their own laboratories and staff. However, all companies abided by the same standards of Darius D'Amore. Even though each company was under the D'Amore organizational umbrella, they competed with each other for market share.
All brands reported their financial information to corporate headquarters in New York City. Some of the corporate executives and departments were located in Huntington, Long Island. The Finance Division was run by the CFO, Jeffery Juda. Under Mr. Juda there were eight departments. Each department was structured slightly different but all had a Vice President, Staff Vice President, Executive Director(s), directors, managers, supervisors and the low-level employees. (See Appendices A and B for the organization charts.)
The Financial Administration Division had a total of 75 employees as of 2005. The Division was broken down into five departments: accounts receivable, accounts payable, credits and collections, payroll, and salary and commissions. Many of the employees were in the same department and position their entire Darius D'Amore career.
POSTING OPEN POSITIONS
When a job position became available, the policy of Darius D'Amore was to first post the job internally and if there was no qualified candidate, the position would be advertised to the public. Many low level positions were filled in this manner. However, when it came to management positions, there were some deviations.
Rich Rogers, 43, had been with the company as a supervisor in the Corporate Credit Department since 1997. Mr. Rogers, a white male, had his Bachelor's degree in management and was enrolled in an MBA program at a local University. Rogers was fighting stage 4-lung cancer since 1996. His condition was not revealed to the Company or his co-workers until 1998. He made his condition known at that time because he needed to take a two-month leave to have bilateral lung surgery.
Prior to his leave, two people had resigned from the positions of Manager of Credit Returns and Director of Credit Returns. Rogers let Al Savarino, Executive Director for Accounts Receivable and Credit & Collections, know he was interested in both. Both positions were a level up in management and meant more money, responsibility, and status. While on leave, Rogers received a call from Savarino who indicated that the positions had been filled with two people from outside the Department. Tony Miceli was the new Director and Tom Mathers was now Rogers' manager. When Rogers mentioned that he felt he was qualified, at least for the manager's position, Savarino told him that in his estimation he was not qualified and, therefore, would not post the position internally.
According to Laura Hertz, who works in the Accounts Receivable Department and a close associate of Rogers, "[Rogers] was devastated because if he was not qualified, why was it his responsibility to train both Miceli and Mathers?" To add fuel to the fire, Hertz had heard that Mathers told Rogers that Rogers did not get the position because Kevin Simmons, Vice President of the Financial Administration Department, said "He (Rogers) is a dead man and wouldn't return to work."
Kevin Simmons, a white male in his early fifties, had been with the Company for eight years. He was esteemed by upper management and his peers because of the dramatic changes he made to improve both the Department and the Company's profitability. Mary Connors, a black female who has worked in the Accounts Receivable Department for over twenty years, spoke of how, "Kevin came to the Department and made many improvements."
THE TAPE
Mary Connors revealed that in May 2001 Rogers taped a conversation with Mathers, who was unaware of the recording. On the tape, Mathers talked about certain employees, including Simmons and minorities. Some of Mathers' remarks regarding black employees were: I can't talk with Christine cause she's a moron. She's on a different planet. She's not for real. Or she'll start talking about things that aren't even words. I think she's one of them uh ... she's related to those Jamaican ones, that they drain the chicken blood and they start fires and stuff. You know the kind. Voodoo. Blow the white powder. You ever see that? How they blow the white powder? If it hits you, it puts you to sleep, you go into a voodoo trance. Hell yeah. She blows the white powder. She's one crazy n****r. She looks like a man, doesn't she? One ugly bitch ... She's a jungle bunny. Are you fascinated with this fat old coon?
Alongside one of his attorneys, Rich Rogers brought the tape to Kevin Simmons. Just a few minutes into the tape, Simmons made him shut it off and asked both of them to leave. Before he left, Simmons asked Rogers how he could continue to work for the Company if he was going around taping conversations. Rogers was surprised at the comment and also that Simmons didn't investigate the contents of the tape.
PERSONNEL CHANGES
Sometime during February 2000, Miceli transferred to the Director of Payroll position. His replacement, Christine Wines, was hired from outside the Company without the position being posted internally. Two years later in May 2002, both Wines and Mathers were terminated. As his supervisor, Kevin Simmons, noted, "Mathers was let go because he lacked consideration of others in his interpersonal skills." While Mathers was still the manager, Rogers interviewed a Puerto Rican female for an associate's position. Mathers told Rogers not to hire "the big fat Puerto Rican s**c pig." The female was not hired because Mathers' felt "she was unqualified", although Rogers thought differently.
After both Wines and Mathers were terminated, Rogers again let Simmons know he was interested in at least the manager's position (Mathers' job). Simmons did not post the positions internally and Rogers indicated again he was denied the opportunity to apply. Mary Connors remembered clearly that Rogers was crying hysterically when he came out of Simmons's office. While consoling him, Rogers was angry that the "a**hole Kevin Simmons told him no matter how hard you work, you will never be promoted. It is probably a good idea if you look for another job!" Mary was in shock but was even more disturbed by what Rogers' said Simmons told him in December 2002. Repeating word for word what Rogers told her with tears coming down his cheeks, "Simmons has the nerve to tell me that I am using my cancer to f**k the system."
LES FORD'S TURNDOWN
Les Ford, a 44 year old African American employee, worked in the Product Demonstration Department from August 1999--December 2002. His Department oversaw the payment of salaries and commissions to the cosmetic personnel. Ford was with the company for a few years making lateral moves from position to position.
Jasmine Young, a 25 year old African American female, was hired as a temporary employee in March 2001 to work in Salary and Commissions Department, with Les Ford.
Les Ford and Jasmine Young worked in a different department than Rich Rogers and neither of them had cancer. Even though they were from different departments, they were both on the same floor and reported to the same Vice President, Kevin Simmons. Vic Viola was the Executive Director.
Linda Evans, a secretary, and Mary Connors both agreed that Les Ford was liked by many of his co-workers. His supervisor, Deborah Jones, was leaving for another position and felt that he was the most qualified for her position. After Ford expressed interest in applying for the promotion, Jones took it upon herself to delegate some of her responsibilities to Ford. After applying for the position in December 2000, he was told by Vic Viola that the position was not going to be filled at the moment, but two new coordinator positions were being created. Ford felt cheated but took one of the positions in order to remain motivated.
One month after Ford began his new position, a white female from the customer service department was named the supervisor. Once again, upper management did not post the position. This was the same position that Ford was told was not being filled. The new hire was Cathy Richards, a white female who had been with the Company for over twenty-four years. According to Linda Evans and Mary Connors, she was the one who created most of the trouble for minority employees. An unnamed source from the Human Resource Department stated that Cathy was written up on a number of occasions for name calling, especially to those she supervised. Another minority, Elvin Shane, backed the claim found in the report. He worked in the same department as Ford and Young. Edward indicate that "Cheryl, along with other coworkers, would use derogatory slurs, such as 'jungle-bunny', 'voodoo bitch' and worse of all 'n****r'." The racial and sexual slurs went on even after people complained to Vic Viola and Kevin Simmons. Mary Connors described an incident where a black pregnant female employee under Rich Rogers reported to him that she was tripped and called a "n****r" by Cathy Richards. Rogers reported it to the people above him, including Kevin Simmons, but nothing was ever done.
Rogers and Young complained to their manager Mike Bonn and the director Mitch Henning about the verbal and non-verbal abuse by Cathy Richards. Only after numerous complaints did Henning decide to bring the issue to John Price, a human resources manager. Rogers and Young were stunned when Price told them " to let things slide." Linda Evans remembered a human resources secretary, Janice Lawrence, told Young "I know that there are people upstairs that do not like certain people, but you just have to ignore it."
Regarding Rogers and Ford, Mary Connors said "people in the Department started to believe that it was malicious intent by management to keep certain people from moving upward in the Company." She continued by saying that it is sad that no one, including herself, took it upon himself or herself to bring the situation to the correct authorities.
ENOUGH IS ENOUGH
Rogers was fired in December 2002 because of his "refusal to cooperate". Rogers claimed the firing was unjust because he had a great record and in fact his 2002 bonus was his largest in the 5 years with the company.
Young was laid off as a temp during May 2002. Mary Connors remembered Young telling her she wanted to quit the entire time but she needed the money to support her family. She kept telling herself that her treatment would get better; but it only got worse.
Out of frustration, Ford quit in April 2003. In May 2003, Rich Rogers, Les Ford and Jasmine Young, filed a $70 million lawsuit claiming racial, disability and gender discrimination.
[ILLUSTRATION OMITTED]
Appendix C
Excerpts from Code of Conduct, Darius D'Amore, 2004
From Pages 4-5.
How to Raise Concerns
Every employee Has the responsibility to promptly report any violation or suspected violation of this Code of Conduct, any other Company policy or applicable law or regulation, in order to protect the Company, its stockholders, its employees and its customers.
If you have information regarding any such violation or suspected violation you should report such information to your supervisor or bring the matter to the attention of:
The General Counsel, The Senior Vice President, Global Human Resources, or The Chief Internal Control Officer
You may also call the confidential, toll-free hotline at (877) XXX-XXXX or use the post office box cited below. Callers from outside the United States or Canada must first dial their country's access number, which may be found at http://www.usa.att.com/traveler/codes/index.jsp.
All such submissions will be treated confidentially to the extent possible. To assist and encourage the prompt reporting of suspected violations, we will accept reports made on an anonymous basis.
Questionable Accounting or Auditing Matters
If you have concerns regarding questionable accounting or auditing matters or internal accounting controls, you may also submit your concerns directly to the Audit Committee of the Board of Directors by writing to:
Darius D'Amore, Inc.
Attn: Audit Committee
P.O.Box XXXX
New York, New York XXXXX
You may also call the confidential, toll-free hotline at (877) XXX-XXXX. Callers from outside the United States or Canada must first dial their country's access number, which may be found at http://www.usa.att.com/traveler/codes/index.jsp.
All such submissions will be treated confidentially, to the extent possible. To assist and encourage the prompt reporting of suspected violations, we will accept reports made on an anonymous basis.
No Retaliation
The Company will not retaliate against any employee who in good faith raises concerns or makes a report about a possible violation of the Code of Conduct. It will not discharge, suspend or discriminate against an employee because such employee in good faith reports or otherwise provides information regarding a possible violation of this Code of Conduct or of any questionable business practice, accounting or auditing matter.
From Pages 25-27.
Our Workplace
A Safe and Fair Workplace
The continued success of the Company's businesses depends on a safe and equitable workplace in which all employees can perform to the best of their ability.
Equal Employment Opportunity. It is the policy and practice of this Company to provide all employees and applicants for employment with equal employment opportunities without regard to race, color, religion, gender, age, national origin, sexual orientation, disability, or veteran status or any other characteristic protected by law. This policy applies to all Company activities, including, but not limited to, recruitment, hiring, compensation, assignment, training, promotion, discipline and discharge.
The Company will provide reasonable accommodation consistent with the law to otherwise qualified employees and prospective employees with a disability and to employees and prospective employees with needs related to their religious observance or practices. What constitutes a reasonable accommodation depends on the circumstances and thus will be addressed by the Company on a case-by-case basis.
The Senior Vice President, Global Human Resources is the Equal Opportunity Director for the Company and is responsible for implementing this policy. Questions regarding this policy should be directed to that office (212-XXX-XXXX).
Prohibition Against Harassment. The Company endeavors to maintain a working environment in which all employees treat each other with respect. Accordingly, the Company strictly prohibits conduct that constitutes or that could lead or contribute to harassment based on gender (whether or not of a sexual nature), race, color, national origin, religion, age, disability, sexual orientation, or any other characteristics protected by law. Harassment does not require an intent to offend. Thus, inappropriate conduct meant as a joke, a prank, or even a compliment can lead or contribute to harassment.
Examples of prohibited conduct are: racial or ethnic slurs; threatening or intimidating acts directed at an individual because of his or her gender or sexual orientation; the posting or distribution of hostile written or graphic materials aimed at a particular sex or religion; the use of computers (including via the Internet) or the e- mail system to view or distribute racially or sexually offensive communications; and the use of an employee's home computer to send racially or sexually offensive communications to another employee at work.
Sexual Harassment. Sexual harassment is a particular type of discrimination. Sexual harassment includes unwelcomed sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature when: Submission to such conduct is made a term or condition of employment, either explicitly or implicitly; Submission to or rejection of such conduct is used as the basis for employment decisions affecting and individual; or Such conduct unreasonably interferes with an individual's work performance or creates an intimidating, hostile or offensive work environment.
The Company prohibits conduct that constitutes, or could lead or contribute to, sexual harassment. Examples of such conduct are: unwelcomed sexual flirtations, advances or propositions; inappropriate touching of an individual's body; comments about an individual's body or appearance; sexually degrading words used to describe an individual; and the use of computers (including the Internet or e-mail) to display or distribute images, messages or cartoons with a sexual content.
Additional rules apply to individuals with supervisory authority at the Company. No one with a supervisory role may at any time: (1) threaten or imply that an individual's submission to or rejection of a sexual advance will in any way influence any decision regarding the individual's employment, performance evaluation, advancement, compensation, assignments, discipline, discharge or any other term or condition of employment; or (2) make any employment decision concerning an individual on such an basis.
Procedures
If you believe that you have been subjected to prohibited conduct, you are urged and expected to report the relevant facts promptly. You may speak to your supervisor or your supervisor's supervisor (bypassing the chain of command), or, if you feel more comfortable, you may contact your Human Resources Manager, the Senior Vice President, Global Human Resources or the General Counsel. Individuals who have information about inappropriate conduct directed towards others also are expected to report the relevant facts promptly.
Your prompt reporting is very important so that the Company can take action to stop the conduct before it is repeated. All reports will be followed up on promptly, with further investigation conducted where needed to confirm the relevant facts. In conducting it investigations, the Company will strive to keep the identity of individuals making reports as confidential as possible.
Any employee or member of the Board of Directors of the Company found to have violated this policy will be subject to disciplinary action, including termination of employment. Individuals who violate this policy also may be subject to legal and financial liability.
No Retaliation
Threats or acts of retaliation against an individual who in good faith reports inappropriate conduct pursuant to these policies are prohibited. In the event you feel you have been retaliated against for having made such a report, you should report the retaliation as described above.
Barry Armandi (deceased), SUNY-Old Westbury
Herbert Sherman, Brooklyn Campus--Long Island University
Daniel J. Rowley, University of Northern Colorado
