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Walgreens Race Bias Case Moves Forward

Eric Simple, an African-American, worked for several years at a Walgreens store in Normal, Ill., as a management trainee and as an assistant manager. His goal was to one day manage a Walgreens, but his district manager, Michael Palmer, offered him management posts in predominately black, low-income areas where Simple felt his chances for success were limited.

So when a managerial position became available in October 2003 in a location Simple desired and he was not told about it until after the position had been filled by a white candidate with less experience, he became upset.

As consolation, Simple's direct supervisor, Leanne Turley, told him that he may not have been happy at that Pontiac, Ill., store because Pontiac was known to "have some very racial tendencies."

Simple filed racial discrimination charges against the Deerfield, Ill.-based drugstore chain in September 2004, claiming emotional distress and asking for lost wages and benefits. Walgreen Co. denied race played a factor in the promotion decision. The U.S. District Court for the Central District of Illinois granted the company summary judgment in October 2006, finding Turley's comments did not qualify as direct evidence of discrimination.

Simple appealed, and 7th Circuit Judge Richard Posner reversed the district court ruling in December 2007. Posner said the lower court should not have granted summary judgment because Palmer, the person who made the hiring and promotion decisions in Simple's district, admitted that he consulted Turley about the appointment of the new manager. Posner ruled the communication "constitutes evidence that [Palmer's] decision was influenced by racism on Turley's part, and that the plaintiff has made a prima facie case."

"The District Court minimized Turley's comments and the role she played in the hiring decision, but the 7th Circuit took a very different view," says Shannon Farmer, a partner at Ballard Spahr Andrews & Ingersoll. "Driven by a concern that the company was engaging in racial discrimination through racial segregation, they held that a racial comment on hiring practices by a superior who plays any role in the hiring process is an admission by the company."


Racial Segregation
Walgreens hired Simple in 1995 as a management trainee and four years later promoted him to assistant manager, which is a prerequisite to becoming a manager. When Palmer, who is white, kept trying to steer Simple to stores in low-income, predominantly black neighborhoods, Simple made it clear he wanted to manage a more profitable store in the Normal, Ill., area because store managers' bonuses are based on their stores' profits.

Palmer offered Simple a store to manage in Kankakee, Ill., which Simple describes as a "socioeconomically challenged" area with high "shrink," which means there is a gap between expected and actual profits due to shoplifting. The following year Palmer offered Simple two more stores, both of which he rejected. The average annual income of customers of those stores was less than $40,000, and more than 40 percent of the customers were black.

Later, when the Pontiac position opened, Palmer promoted a white woman, Melissa Jonland, to manage the store. In that store customers' average income was between $40,000 and $60,000, and more than 80 percent of the customers were white. Simple, who had two more years of experience as an assistant manager than Jonland, was upset because he was never notified of the opening. That's when Turley made the comment.

In her deposition Turley testified, "I may have stated that Pontiac was not ready to have a black manager. ... I was simply trying to make [the plaintiff] feel better because my feeling was he may not have been very happy working there."

Turley had previously worked with Jonland, and Palmer stated that when considering Jonland for the job, his assessment of Jonland's performance had been supported by Turley.

Walgreens maintained the company did not take race into account in the promotion and argued the comment was that of a manager trying to console an employee. But Posner ruled, "The evidence suggests Palmer wanted to steer his highly regarded black assistant manager to a store in a predominantly black, low-income neighborhood."


Objective Selection
"The courts do not like the amount of discretion that's been given to a handful of decision makers to pick whomever they personally want for a certain position," says Anna Masters, a partner in Winston & Strawn's Los Angeles office. "The more subjective you allow the [hiring] process to be, the more exposed you are to discrimination claims."

Sandy McCandless, partner at Sonnenschein Nath & Rosenthal, says companies need to conduct ongoing training for their supervisors. "A company can never do enough training of its supervisors, especially to avoid racial and sexual stereotyping," she says.

One thing all supervisors should know is that certain comments, even if well-intentioned, can be misperceived or misunderstood, particularly when a supervisor is delivering bad news.

"You have to focus on ways to communicate with employees that help to minimize the sense that they've been wronged," Masters says. "Sometimes managers have to deliver bad messages, and there are good and bad ways to do that. People who feel that they've been treated fairly are less likely to make claims, even though they disagree with the action that's been taken."

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Yesenia Salcedo

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