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Unger v. Sirena Div. of Consol. Foods

OPINION FILED MAY 24, 1978.

TRUDY UNGER, PLAINTIFF-APPELLEE,

v.

SIRENA DIVISION OF CONSOLIDATED FOODS CORPORATION ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Cook County; the Hon. RAYMOND K. BERG, Judge, presiding.

MR. JUSTICE MCNAMARA DELIVERED THE OPINION OF THE COURT:

Rehearing denied June 26, 1978.

This matter arises from two charges against defendant Sirena Division filed by plaintiff Trudy Unger with the Illinois Fair Employment Practices Commission. In the first charge plaintiff alleged that her termination by Sirena in May 1972 was due to sex discrimination. In the second charge plaintiff alleged that after she was rehired by Sirena and assigned to a new territory, she was discharged in October 1972 in retaliation for filing the initial charge with the commission. Hearings were held before a hearing examiner who submitted a recommended decision to the commission. The examiner recommended dismissal of the first charge, but found the second discharge was a retaliatory measure. After hearing arguments, the commission ordered dismissal of both charges. Plaintiff brought an action in the circuit court, and the court held that the commission's findings were against the manifest weight of the evidence. Sirena appeals. It contends that plaintiff was an independent contractor not covered by the Illinois Fair Employment Practices Act (Ill. Rev. Stat. 1975, ch. 48, par. 851 et seq.); that the trial court erred in reversing the commission's finding that plaintiff's original discharge in May 1972 was not sexually discriminatory; and that the commission correctly found that plaintiff's second discharge in October 1972 was not a retaliatory measure.

The facts underlying this dispute are as follows. Sirena is engaged in the manufacture, distribution and sale of women's swimwear. Its merchandise is sold to retail stores by independent sales representatives who have exclusive rights to sell the Sirena line within various geographical territories. From August 1963 until May 1972, plaintiff was employed as Sirena's sales representative for the territory comprised of Michigan, Illinois, Indiana, Minnesota, Wisconsin and Ohio.

Plaintiff was hired by letter agreement in August 1963. Under this agreement plaintiff was an "independent agent" responsible for all travel and other selling expenses, taxes, and licenses. She was free to set her own schedule and to call upon customers she selected, and she was to pay for expenses she incurred. She was not required to account to Sirena for her daily activities. Plaintiff could carry noncompetitive lines and the agreement acknowledged that she had such lines at that time.

Plaintiff's contact with Sirena was through orders placed and weekly telephone conversations regarding business operations such as shipping and delivery problems. According to plaintiff, she discontinued representing other lines in 1969 or 1970. At that time she approached Arnold Seckler, president of Sirena, and vice-president Maurice Newman to discuss the possibility of becoming an exclusive sales representative for Sirena. As such, her status would change to that of a salaried employee and she would be eligible for hospitalization and other benefits. Sirena never granted that request but, as of August 1969, paid plaintiff $100 each month to reimburse her for expenses incurred in maintaining a Chicago showroom. Plaintiff continued to receive a seven percent commission of the gross sales on all business booked by Sirena or its agents in her territory. In addition, she received a 3.5 percent commission on the sale of closeout merchandise.

During the period she was engaged as a sales representative for that territory, plaintiff's dollar volume of sales increased from $22,000 to $572,000. Her percentage of the total company business increased from 6.3 percent in 1963 to 12.5 percent in her final year. Throughout this time, plaintiff was Sirena's only female sales representative.

From 1963 to 1972, Sirena's national sales grew from approximately $350,000 to over $4,700,000. In accordance with its growth, Sirena developed marketing strategies to meet its competitors and to increase its sales volume. At the commencement of the 1970-71 sales season, Seckler and Newman developed a plan to reorganize the sales force. During the course of the reorganization, Sirena hired a new vice-president to strengthen sales and terminated six of its 11 sales representatives. Plaintiff was among those terminated. According to Newman, the reorganization was designed solely to accomplish a shift in marketing emphasis away from small specialty shops to large department stores. His decision to terminate those six sales representatives was based upon their inability to handle their respective territories and to service the larger accounts.

Newman testified that starting in 1970 he attempted to correct plaintiff's method of writing department store orders, but she failed to improve. In January 1971, and on other occasions, Seckler and he met with plaintiff to try to correct her shortcomings and to stress the importance of department store sales. In November 1971, he made a trip to Chicago to evaluate plaintiff and to urge the importance of placing a concerted effort on department store sales. Plaintiff did not change the manner in which she worked with department stores.

In 1971 Seckler told plaintiff that her overall performance was unsatisfactory. Her territory accounted for more than 22 percent of the buying power in the country and sales of Sirena's competitors in her territory were far better. At that time, Newman told plaintiff that too great a burden of servicing midwest accounts was falling on the New York office. He testified his records showed that plaintiff utilized the New York office more than other representatives. According to Newman, such undue reliance was also a reason for the termination of two other sales representatives.

In a letter dated May 31, 1972, plaintiff was advised of her discharge effective July 31, 1972. The reason given was that "* * * due to the growth that has occurred in Sirena nationally and due to the necessity of fueling our continued plant expansion, it has become necessary to both strengthen and reorganize our sales staff."

In June 1972, plaintiff asked Seckler to reconsider the decision. Later that month plaintiff was offered the position as sales representative for the territory of Iowa, Missouri, Kansas, Nebraska, and Illinois (except Chicago). The former sales representative had been terminated because he was not doing an adequate job. After Seckler offered plaintiff the position, she called Newman and accepted. She told Newman that she wished to become a part of the organization again. On June 30, 1972, the parties entered into a written agreement whereby plaintiff was appointed sales representative for the new territory. Under the agreement, plaintiff was given exclusive rights in the territory, a seven-percent commission, and the right to carry noncompetitive lines.

At the hearing, plaintiff introduced letters which Seckler had written in 1963, 1964, and 1966. Seckler wrote to advise plaintiff of the importance of her territory and the role which she was to play in bringing the territory into prominence. Seckler expressed his confidence in plaintiff's ability and told her he hoped that her territory's yield would improve. Plaintiff also introduced a letter from Seckler dated June 30, 1972, in which he told plaintiff that he was glad to have her "back on board."

According to Newman, the Sirena sales season commences September 1 when sample lines are sent to each sales representative. The first month of the sales season is critical because Sirena ordinarily books 30 to 35 percent of its annual sales at that time. In order for retail stores to have their merchandise in time for the winter cruise season, the orders must be obtained at the beginning of the season. Newman testified that early sales assist in obtaining subsequent sales throughout the year because most department stores plan their annual ...


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