A Man's World

The thin, attractive blond stood up before a room of Rent-A-Center’s top execs — the only woman in a sea of white shirts, dark suits and ties — and began delivering her report on the company’s tax situation.

She didn’t get far. Before Leigh had completed two sentences, Ernie Talley, crimson-faced and ready to explode, rocketed from his chair, bellowing, “That’s not what I wanted!”

Leigh tried to calm the boss down, explaining why what he wanted wouldn’t be meaningful.

Bad move.

Nobody questioned the chief executive officer of Rent-A-Center — especially not a woman. Pushing his face just inches from Leigh’s, Talley slammed his fist on the conference room table and shouted, “By God, you will have what I want, or I will find someone who will!”

Humiliated by the dressing-down and furious that her own supervisor, the chief financial officer, kept his lips zipped during the tirade, Leigh fled to her office. “I just sat there, and tears were streaming — and I’m a hard-core type of girl; I’m not a little prissy dame,” Leigh says.

From the start, Talley seemed less than thrilled with the idea of giving 32-year-old Leigh the proverbial keys to the executive washroom. The attitude was pervasive in the nation’s largest rent-to-own company, according to a sexual discrimination suit. The company, based in the Dallas suburb of Plano, has some 20 outlets in the Houston area.

The suit alleges that women were subjected to sexual and derisive comments, and work requirements were changed in an effort to induce female employees to quit and keep women from applying. Pregnant employees were summarily fired, the suit says, and women who complained about boorish or offensive behavior were ignored or punished.

The culture of the company could prove costly. Plaintiffs in the suit pending in federal court in Illinois sought damages of $410 million. But the company engaged in some fancy legal footwork that could reduce that bill.

Leigh, a certified public accountant who asked that her surname not be published, interviewed with the company in January 1999. Talley, gray-haired and 64 years old, seemed to care more about her personal life than her qualifications, she recalls. He glanced at Robert Davis, his 28-year-old CFO, and said reluctantly, “Well, I don’t know if this is gonna work, but if you want to try it, fine,” she says.

The personal questions and Talley’s icy demeanor made her want to turn down the job offer, but Davis later assured her that Leigh’s contact with Talley would be minimal; he would act as a go-between.

But Leigh claims Davis seemed more interested in popping his head into her office to ask, “I’m just wondering, did you have sex last night?”

Then one day Leigh discovered a lump in a lymph node. She took the only doctor’s appointment available, but when she told Davis, he insisted that she’d have to reschedule; Talley wanted her at a meeting.

Leigh canceled her appointment but says, “Not once during this ‘mandatory’ meeting was my presence even acknowledged.” Fuming, Leigh sent Davis an e-mail: “In the future, I would appreciate advance notice of any meeting in which my involvement may be needed.” Moments later, Davis stormed into her office and fired her for insubordination — the third woman in 15 months to be kicked out of the position.

Leigh’s successor, Donna Smith, claims Davis sought her out and described the “nasty” dreams he had had about her and discussed his penis size. After Smith complained, she received an unfavorable evaluation.

A year later, Smith sent a resignation letter to Talley, stating that she could no longer work for a company that tolerated “sexual harassment and discrimination.”

“I do not believe that upper management promotes the advancement or enrichment of women,” she wrote. “Nor do I believe that women are judged by the same standards as their male colleagues.”

As Talley’s company grew, so did allegations of sexual harassment and discrimination.

Even highly regarded veteran employees felt the sting, among them Claudine Wilfong, a former store manager in Arnold, Missouri.

Wilfong had 11 years with Rent-A-Center when it was acquired by Talley’s company, Renter’s Choice, in 1998. Rent-A-Center had been a good place to work — that is, before the company was sold to the people she now describes as the “good ol’ boys from Texas.”

Her outlet had won store-of-the-month and sales contests, and she met or exceeded sales and collection goals with the new company. But Wilfong recalls that Rent-A-Center Vice President Dowell Arnette joked in a manager’s meeting about how the women were “probably better at selling washers and dryers” than the men.

And after the sale in 1998, the Texas owners also increased the lifting requirement for store employees from 50 pounds to 75. Managers such as Wilfong and Karen Dueker-Meyer of Farmington, Missouri, claim they were ordered to send female workers — not men — out alone to make deliveries and pickups.

James Weinrich, Oklahoma regional manager during the acquisition, said in a sworn statement that Talley, Arnette and Arnette’s brother, training director Joe Arnette, told him that the new weight-lifting requirements would “keep females from applying.” Weinrich said the solo delivery assignments were part of the thinking that if you work women hard enough, they’ll quit or give management a reason to fire them.

If a manager found out a woman was pregnant, she was often deemed “disabled” and fired on the spot, some workers alleged. Teri Goodermote claims that when her manager in North Adams, Massachusetts, learned of her pregnancy, he started giving her the heavy deliveries. The job of cleaning bathrooms became known as “woman’s work” in states as far-flung as Ohio, Florida and New York.

Before it became part of Talley’s empire in 1998, Rent-A-Center’s workforce was 20.9 percent female. That same year, Talley’s company had a female workforce of 1.8 percent. Two years after Talley bought Rent-A-Center, the proportion of women had fallen to 8.5 percent in the combined company.

According to a 1999 company directory, all seven vice presidents were men, all 45 male regional directors were men, 261 men and seven women held the position of market manager, and 30 men and two women were service managers.

Fed up with the inequities, Wilfong filed a complaint with the St. Louis office of the U.S. Equal Employment Opportunity Commission in 1999.

The EEOC joined with Wilfong’s lawyers in a class-action federal lawsuit. They amassed evidence from more than 270 women and 30 men in 47 states that painted a picture of a company intent on purging women from its ranks.

Faced with a mountain of evidence and a demand for damages exceeding $400 million, the good ol’ boys traveled to Kansas City, where another judge, some compliant lawyers and clueless plaintiffs might just make the whole mess disappear.

J. Ernest Talley began as an appliance store owner in Wichita, Kansas. According to a 1991 profile in the trade magazine Progressive Rentals, Talley noticed that banks were becoming less willing to make small loans for appliance purchases. To bridge the credit gap, Talley began experimenting with the rent-to-own concept. By 1974, he had 14 stores scattered throughout the South and Midwest.

Tom Devlin, a co-founder of Rent-A-Center, describes Talley as “creative and into making money.” But he doesn’t recall Talley discriminating against women. “Ernie believed red, white, black, green, if they could make you money, you would hire them.”

In 1974, Talley began investing in apartment complexes, many in Texas. He sold his appliance chain and jumped into state and school-district politics in Kansas before moving to Texas.

By 1989, Talley re-entered the rental business as a partner in Vista Rent-to-Own. Four years later, he merged Vista into his newly formed Renter’s Choice. Talley gobbled up smaller chains and had 700 stores nationally by 1998. That August, he paid Thorn America $900 million for 1,400 Rent-A-Center stores.

For the women working in Thorn’s Wichita headquarters, the attitudes of the new regime were shocking, especially during visits by Dowell Arnette, Talley’s right-hand man. He allegedly looked at the skirt of administrative aide Angela Turner and asked, “So, how far do your legs go up?” Administrative specialist Toni Spurgeon-Coker says he ogled her and made suggestive comments, but the company refused to act on her repeated complaints.

The new regime also jettisoned Thorn’s human resources department. Renter’s Choice didn’t have an HR department for a workforce that then numbered 11,300. Management kept the tradition of a Las Vegas convention for top managers, but under Talley’s leadership, it turned into a fraternity party, complete with scantily clad female cheerleaders and group outings to strip clubs.

Although some of the women participants found it offensive, St. Louis store manager Tammy Shell says it was fun. Shell, who last year earned $74,000, was one of the women Rent-A-Center’s spokesman suggested as a source for this story. Shell says she enjoyed the cheerleaders and strip club outings because the Rent-A-Center guys were “playing like they were Rams players and the strippers were all over them.”

However, other former female employees say that the Talley-controlled Rent-A-Center had become a downright hostile place. “No matter how hard I worked or tried, or what I did in the past, none of it mattered,” says Wilfong. “Just because I’m a female, it didn’t matter.”

Wilfong quit in 1999. After feeling depressed for a few months, she started talking to female employees and ex-workers. She realized, “It wasn’t just me that felt betrayed, everybody did.”

Wilfong conferred with lawyers and provided them with the names of eight other women who had worked for Rent-A-Center. As soon as the word “discrimination” was mentioned to other female workers for the company, the lawyers say, the women couldn’t wait to talk.

They took their claims to the EEOC. Donna Harper, supervisory attorney at the agency’s St. Louis office, searched the EEOC’s national database and turned up 25 to 30 additional open charges around the country and consolidated them in her office.

Harper says she found that not only did the new owners of Rent-A-Center discharge women as a group, the company was throwing up roadblocks to keep women from being hired. Three managers admitted to the federal agency that they had destroyed women’s employment applications, a violation of federal regulations.

In August 2000, 19 women sued Rent-A-Center in federal court in East St. Louis. In May 2001, the EEOC joined as a plaintiff, arguing that the case was “of general public importance.”

For its defense, Rent-A-Center hired a team of four law firms, led by Dallas-based Winstead, Sechrest & Minick. The company’s outside public-relations firm issued a statement denying allegations of harassment and discrimination:

“There has been no finding in any court of law that any of these allegations are true. In many cases, they are nothing more than third-party recollections of something that somebody thought that they might have overheard.” In the statement, Rent-A-Center says it is committed to a “discrimination-free workplace” and equal opportunity for all employees.

Talley retired from the company on October 8 and has sold his shares in it for about $60 million. He did not return phone calls. In a deposition, Talley denied saying that women didn’t belong in the business and stressed that he thinks that some of Rent-A-Center’s female managers are “the best we have.” As for other top execs, the spokesperson said that the company’s blanket denial of wrongdoing also applied to them.

Once Rent-A-Center filed its response to the lawsuit, the case took some odd procedural twists.

Company computer tapes containing seven years’ worth of monthly payroll information had been destroyed. Moreover, several monthly lists of those eligible for promotion couldn’t be found.

Attorneys for the women hired Dr. James Misner, an expert on human motion. He concluded that the 75-pound lifting rule wasn’t a genuine requirement because Rent-A-Center didn’t test the applicants on it; its real effect, he said, was to discourage women from applying.

The women in the East St. Louis case were set to file their motion for class action status on November 1, the court’s deadline. But on October 31, Rent-A-Center’s lawyers announced a $12.25 million settlement of a class-action sex-discrimination lawsuit in Kansas City.

There wasn’t even a class action pending against Rent-A-Center in Kansas City at the time.

The Kansas City end run grew out of two individual discrimination suits filed by Tracy Levings and Margaret Bunch. Each woman initially asked for a class certification, although District Judge Ortrie Smith sided with Rent-A-Center against the request.

But just before the East St. Louis class-certification motion was to be filed, the plaintiffs’ Kansas City lawyers and Rent-A-Center’s lawyers marched before Smith to jointly ask that the case be given class-action status. Smith agreed and conditionally approved their request for a $12.25 million settlement that would apply to 4,800 women, including Wilfong and most of the women covered by the other case.

The Kansas City settlement would have paid the women anywhere from $1,000 to $7,000 each, depending on their time with the company. The Kansas City plaintiffs’ lawyers could have earned total fees of up to $2.6 million. The terms said that if more than 92 women opt out of the settlement, the company could walk away from the deal.

Judge Smith initially denied the requests by the EEOC and East St. Louis lawyers to intervene. The Kansas City plaintiffs and their attorneys would not comment for this story.

Back in East St. Louis, U.S. District Judge David R. Herndon refused to stop his case and granted the class-action motion — in effect creating a competing class of Rent-A-Center women.

Rent-A-Center urged its female employees to participate in the Kansas City settlement, while the EEOC and East St. Louis plaintiffs’ lawyers are urging them to opt out of that same deal.

“I just felt like they were trying to get one over on the women again,” Wilfong says of the Kansas City shuffle. “They’re looking for any way to get rid of us.” The settlement amount would just be “a slap on their hands,” she says.

The looming clash was avoided last week when all sides signed off on a compromise in Kansas City. Rent-A-Center executives denied any wrongdoing but agreed to pay $47 million. In addition, during the first 15 months after the settlement, the company agrees to fill 10 percent of job vacancies with women who were fired. The deal, which still must be approved by the East St. Louis judge, will also create a human resources department and allow a court-appointed master to decide discrimination complaints.

Wilfong praised the terms that set up the HR department and enable the women to return to work if they want to. “I mean, that is just a normal thing that should have been done,” she says.