NEW YORK — An arbitrator has ordered J.C. Penney Co. to pay an ex-employee $533,000, representing accrued stock options and compensatory damages, and also change the terms of her termination.
Kay Baker, the former employee, headed Penney’s home decorating division until she was let go in March 1996. She filed a lawsuit in a Texas state court charging defamation, and later added a sexual harassment claim. The company alleged she was fired for improper accounting of sales figures. The case was referred to arbitration because of a company policy requiring arbitration of employment disputes.
In a decision handed down in late July, the arbitrator upheld the termination of employment but directed the retailer to reclassify the firing to a discretionary dismissal from a dismissal for cause. The arbitrator also ordered Penney’s to pay Baker $233,000 for the value of her accrued stock options, plus another $300,000 in compensatory damages.
The decision was not made public until an article appeared in a Dallas newspaper Wednesday with Baker discussing the suit. She could not be reached for comment.
Penney’s, however, said in a statement, “Kay Baker was given a full hearing of her claims under J.C. Penney’s arbitration program….We have abided by the arbitrator’s decision in all respects.” The retailer declined comment on the $533,000 payment.