NEW YORK — Eight former Belk Inc. executives have filed suit against their former employer, alleging their terminations in Belk’s 2002 restructuring were part of a “systematic and concerted reorganization designed to rid the company of older employees.”
All of the plaintiffs, including James Madden, former president of Belk’s southern division, were at least 50 years old at the time of their separation from the firm.
The suit was filed in U.S. District Court for the middle district of Florida in Jacksonville on Tuesday.
In addition to Madden, 56, who was terminated after 14 years with Belk, the plaintiffs in the Florida suit are: Jean Whitaker, 53, former division merchandise manager in the southern division; Thomas Teves, 56, former senior vice president of Belk’s western division; Robert Webster, 60, former senior vice president of the central division; George Mettrick, 56, former division manager; Anne Bryan, 52, former corporate divisional merchandise manager; Robert Keppel, 54, former store manager of the Jacksonville, Fla., store, and Daniel Maday, 55, former corporate senior buyer.
Their salaries, excluding bonuses and benefits, ranged from Webster’s remuneration in excess of $185,700 to Keppel’s, which exceeded $67,000. The plaintiffs claim they were terminated after tenures as long as 31 years, in Mettrick’s case, and as little as seven, in Webster’s.
The suit alleges that Belk, in orchestrating its 2002 consolidation, violated the Age Discrimination in Employment Act of 1967 by engaging in “a blatant and willful pattern” of age bias that included hiring and promoting younger employees. It seeks remedies including back and front pay, liquidated damages, reinstatement of employment, compensatory and punitive damages and legal fees.
Belk is fighting at least one more age discrimination action against it. As reported, the former president of Belk’s northern division, David Hines, brought a complaint against the company in April accusing the firm of a reorganization “aimed at ridding itself of management over the age of 50 in favor of younger management employees.”
A judge earlier granted a request by Belk that the Hines suit, originally filed in Maryland, be moved to North Carolina. The department store retailer maintains its headquarters in Charlotte, N.C., and hasn’t operated geographic divisions since consolidating.Phone calls to Belk weren’t returned Wednesday, but the company, citing policy, previously had declined to offer any comment about the Hines suit.
However, the company has defended its restructuring in its financial disclosures. In a statement by chief executive John M. Belk accompanying yearend earnings results, the consolidation was described as “an important strategic move…that will enable us to serve our customers better, improve efficiency, increase our capacity for expansion and produce better operating results over the long term.”
Beginning in 2002, the plaintiffs in the Florida suit charged that, among other actions, qualified employees were terminated because of their ages and performance reviews were falsified to help justify actions against older workers.
“In particular, the reorganization has caused, directly and indirectly, the disproportionate elimination from the company’s job ranks of substantial numbers of employees who are at least 50 years of age, including plaintiffs.”
In some cases, according to court papers, the reorganization resulted in the creation of new positions. However, the suit repeatedly cites examples of how the plaintiffs weren’t offered these posts. “Instead most, if not all, of these positions were awarded to younger, less experienced and less senior employees,” the charges read.
Mettrick was offered two positions by Belk, the papers state, but one would have required five hours of commuting a day with a salary of about half of what he’d been making.
The suit notes that no attempt to justify the terminations was made by the firm. It uses numbers from Belk’s definitive proxy statement to illustrate that, while veteran employees were being terminated, senior management pay was rising and “officers-owners also awarded themselves a total of almost $9 million in dividends and low-interest loans totaling $7.5 million.”
Belk, the ceo, received $783,000 in salary last year, 4.8 percent above the prior year, and $750,327 in bonuses, 93.5 percent above those logged in fiscal 2002. Three of his nephews — Thomas M. Belk Jr., H.W. McKay Belk and John R. Belk — are among the five top officers, and each saw his salary rise 4.7 percent, to $576,000, as their bonuses ballooned 93.4 percent to $441,622 each.The proxy lists John M. Belk’s age as 83, Thomas M. Belk Jr.’s as 48, H.W. McKay Belk’s as 46 and John R. Belk’s as 44. The fifth top officer, Ralph Pitts, executive vice president and general counsel, is listed as being 49.
In the fiscal year ended Feb. 1, as reported, Belk’s net income rose 32.5 percent to $84 million as sales inched up 0.2 percent to $2.24 billion and same-store sales receded 3.2 percent. Belk, the largest privately held department store company in the U.S., has public debt and has made its earnings and sales results public since 1998.
The plaintiffs are represented by Stuart Nelkin of the Houston-based firm Nelkin & Nelkin P.C.
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Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
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