Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Ohle v. The Neiman Marcus Group

Court of Appeals of Illinois, First District, Second Division

September 27, 2016

CATHERINE OHLE, Plaintiff-Appellant,
v.
THE NEIMAN MARCUS GROUP, Defendant-Appellee.

         Appeal from the Circuit Court of Cook County No. 12 L 11260, Honorable Kathleen Kennedy, Judge Presiding.

          JUSTICE PIERCE delivered the judgment of the court, with opinion. Presiding Justice Hyman and Justice Simon concurred in the judgment and opinion.

          OPINION

          PIERCE JUSTICE

         ¶ 1 Plaintiff, Catherine Ohle, was denied a job because of a failed credit check that she claims is a violation of the Employee Credit Privacy Act (Act) (820 ILCS 70/1 et seq. (West 2012)). The employer, defendant Neiman Marcus, claimed an exemption because the position gave the employee "access" to personal and confidential customer information. Summary judgment was granted in favor of defendant. The trial court found the position fell within the "access" provision of the Act. For the following reasons, we reverse the judgment of the trial court.

         ¶ 2 Plaintiff applied for a job at Neiman Marcus's Oak Brook, Illinois, store as an entry-level "Dress Collections Sales Associate." Ohle was interviewed and was informed that she should expect an offer for the position, pending completion of a successful background check. Neiman Marcus ran a background check through a third-party vendor. The third party informed Neiman Marcus that Ohle failed her credit check and, on that basis, did not investigate the remaining areas of inquiry. The report indicated Ohle had several civil judgments against her and several accounts in collections. On July 17, 2012, Ohle received a letter from the reporting agency informing her that she failed the credit check, and based on her credit report, she would not be hired.

         ¶ 3 Plaintiff filed this suit individually and on behalf of a class, [1] alleging a claim for violation of the Act (820 ILCS 70/1 et seq. (West 2012)). The Act prohibits an employer from inquiring into a potential employee's credit history and prohibits an employer from refusing to hire the applicant or discriminating against the applicant because of his or her credit history. 820 ILCS 70/10(a) (West 2012). The Act also provides an exemption where a "satisfactory credit history" is an "established bona fide occupational requirement of a particular position." 820 ILCS 70/10(b) (West 2012). For a bona fide occupational requirement to exist, at least one of seven circumstances identified in the Act must be present.[2] Id. An individual who is injured by a violation of the Act is permitted to bring a civil action to obtain injunctive relief, damages or both, and if the injured party prevails, she may be awarded costs and reasonable attorney fees. 820 ILCS 70/25 (West 2012).

         ¶ 4 Ohle alleged Neiman Marcus refused to hire her and discriminated against her based on her credit history claiming a satisfactory credit check is not a bona fide occupational requirement for the dress collections sales associate position.

         ¶ 5 Defendant admitted that Ohle applied for a job, was interviewed, a credit check was ordered, and plaintiff was not hired. Defendant also admitted that Ohle was "provided a contingent offer of employment as a sales associate pending the completion of a successful background check, including a credit check" and "NMG had elected not to extend her an offer of employment." Defendant admitted that it ordered credit reports for other Illinois sales associates and that it had elected not to extend offers of employment to others based on their credit history. Defendant denied it engaged in any unlawful conduct and denied that class treatment was proper. Defendant also alleged several affirmative defenses, including that a satisfactory credit history is a bona fide occupational requirement for the sales associate.

         ¶ 6 Neiman Marcus is a high-end retailer serving customers with a wide array of designer and luxury merchandise. A sales associate is "responsible for achieving sales goals; provid[ing] outstanding customer service; manag[ing] clientele effectively to achieve financial results; [being an] effective communicator with Department Manager and Coordinator; [and] perform[ing] additional tasks as required." In the dress department, an individual dress can cost more than $1000. Neiman Marcus employs sales associates to sell its merchandise to the public. The sales associates are heavily supervised, both by store managers and loss prevention teams using surveillance cameras. Sales associates are observed from the moment they enter the building until they pass through security checks leaving at the end of the day. Such oversight is in place because at any given time the Oak Brook location has tens of millions of dollars of merchandise in inventory.

         ¶ 7 Sales associates are paid a minimum hourly rate, or sales commission, whichever is greater. Sales associates process sales and returns of Neiman Marcus's merchandise using point of sale (POS) registers by inputting a personal identification number (PIN) and password. They are allowed to sell merchandise across the entire store floor and are responsible for the cash in their POS registers. Sales associates can authorize cash refunds of up to $100, or they can credit a customer's credit or gift card in greater amounts. They can also accept in-store payments for a customer's Neiman Marcus credit card.

         ¶ 8 Sales associates are to encourage Neiman Marcus customers to open store credit cards. Neiman Marcus permits all of its employees to accept customer applications for a store credit card. These applications contain customer dates of birth, social security numbers, driver's license numbers, and income amounts. Customers sign the application, authorizing Neiman Marcus's "collection, use, and disclosure" of this information. Neiman Marcus's corporate policy requires all employees to deliver any application received to the credit office, or to place them in a locked drawer in the POS register. Employees are specifically prohibited from keeping or accessing any personal customer information from the POS terminals or through any other means. Once the customer's information is digitally entered into the computer system it is immediately encrypted and sent to a credit card company.

         ¶ 9 Prior to August 1, 2012, Neiman Marcus required a satisfactory credit check as a condition of employment for its sales associates. However, after August 1, 2012, they eliminated the credit check requirement entirely for its sales associates. Neiman Marcus does continue to run credit checks for certain positions, like loss prevention. Neiman Marcus's vice president of human resources testified that the reason Neiman Marcus no longer performs a credit check for dress collections sales associate applicants is because defendant "was concerned about losing qualified candidates due to failed credit reports, especially with the downturn in the economy."

         ¶ 10 In September 2013, defendant moved for summary judgment arguing that there are no material facts in dispute and that it didn't hire Ohle for a lawful and legitimate reason, namely, that a satisfactory credit check is a bona fide occupational requirement for the sales associate position. Defendant argues that three of the enumerated circumstances in the Act are involved in the dress collections associate position, and therefore, a satisfactory credit history is a bona fide occupational requirement for employment in that position. Those three circumstances are (1) the position involves access to personal or confidential information, (2) the position includes custody of or unsupervised access to cash, or (3) the position includes signatory power of $100 or more per transaction. 80 ILCS 70/10(b)(2), (3), (5) (West 2012).

         ¶ 11 Defendant's position is that the duties of the sales associate position involve access to personal or confidential customer information because applications for a Neiman Marcus credit card provide the associates with social security numbers, date of birth, addresses, and income information, which the associates input into the computer. Although applications may be secured with a manager at some point, the associates have access to that confidential information initially and enter that information into an encrypted database in the POS register.

         ¶ 12 Defendant argued that the duties of the sales associate position involve custody of cash valued at $2500 or more; sales associates routinely sell dresses and items above $2500 of value; purchases can be made with cash, check or credit card and as long as a purchase is under $10, 000, it can be made with any sales associate; and access to personal or confidential information because applications for the Neiman Marcus credit card provide the associates with social security numbers, date of birth, addresses, and income information, which the associates input into the computer. Although applications may be secured with a manager at some point, the associates have access to that confidential information initially and enter that information into an encrypted database in the POS register. In addition, associates have signatory power of more than $100 because they issue gift cards and process cash returns. Lastly, although Neiman Marcus no longer performs credit checks for sales associate applicants, it is irrelevant from resolving this dispute.

         ¶ 13 Plaintiff argued that a credit check is not a bona fide occupational requirement for this job because the evidence establishes (1) there is supervision of the employees by way of video cameras and associates are closely supervised by on-floor managers; (2) there are policies that limit the amount of cash that can be held in the cash register and handled by sales associates, and according to defendant's loss prevention manager, there are no stores in Illinois with a cash limit exceeding $2500; (3) corporate policy requires that store management, and not associates, perform cash withdrawals for $1000 or more; (4) all employees are permitted to receive store credit card applications and corporate policy requires that all employees, including associates, immediately deliver the applications to the credit office or secure them in a locked POS drawer; (5) associates do not have custody of "Marketable assets, " defined by the Act as "company property *** safeguarded from the public and *** only entrusted to managers and select other employees" (820 ILCS 70/5 (West 2012)); (6) associates are prohibited from accessing a customer's personal or confidential information or retaining such information; and (7) associates do not have signatory power over business assets of $100 or more.

         ¶ 14 The trial court granted defendant's motion for summary judgment finding the sales associate position involves access to personal or confidential customer information, and therefore, the job is exempt from the Act. The trial court found that "[t]he undefined term access is broad and defined without limiting or qualifying language in terms of the type or time of access. The credit card application information to which the sales associate has access meets the statutory definition of personal or confidential information in that it is sensitive information defendant's customers give explicit authorization for defendant to obtain, process and keep." Because the trial court ruled that the sales associate job is exempt under the Act on this basis, the trial court did not address the two other exemptions raised in defendant's summary judgment motion. Ohle timely filed her notice of appeal on July 2, 2014.

         ¶ 15 ANALYSIS

         ¶ 16 Summary judgment is appropriate " 'if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.' " Irwin Industrial Tool Co. v. Department of Revenue, 238 Ill.2d 332, 339-40 (2010) (quoting 735 ILCS 5/2-1005(c) (West 2008)). The party moving for summary judgment bears the initial burden of proof. Atanus v. American Airlines, Inc., 403 Ill.App.3d 549, 553 (2010). To survive a summary judgment motion, as the nonmoving party, plaintiff must present a factual basis that would arguably entitle her to a judgment. Fichtel v. Board of Directors of the River Shore of Naperville Condominium Ass'n, 389 Ill.App.3d 951, 956 (2009). We review the trial court's decision to grant summary judgment de novo. Evans v. Brown, 399 Ill.App.3d 238, 244 (2010).

         ¶ 17 The Act (820 ILCS 70/1 et seq. (West 2012) was enacted January 1, 2011. Pub. Act 96- 1426, § 1 (eff. Jan. 1, 2001). The legislative synopsis states that the Act "[p]rohibits employers from inquiring about or using an employee's or prospective employee's credit history as a basis for employment." I Final Legislative Synopsis and Digest of the 96th Ill. Gen. Assem. (No. 14), at 4273. When introducing the Act, Representative Franks explained that "hardworking citizens should not be faced with yet another obstacle to obtaining employment based on the credit history that may be simply a reflection of today's troubled economy." 96th Ill. Gen. Assem., House Proceedings, Mar. 25, 2010, at 184 (statement of Representative Franks). Companies are "discriminating against potential employees based on their credit history, and that's absurd." Id. at 185.

         ¶ 18 The Act exempts certain industries from its reach by providing "exemptions for the banking and financial industry, state law enforcement, and investigation units, and some state government agencies" (id. at 184) or those with access to national security information (820 ILCS 70/5 (West 2012). The purpose of the Act was to prevent citizens who face "financial hardships that are often unpreventable" due to the "harshest economic situation we've seen in decades" to be able to obtain employment despite "bad credit" (96th Ill. Gen. Assem., House Proceedings, Mar. 25, 2010, at 184 (statement of Representative Franks)) where credit history is not relevant to the job (96th Ill. Gen. Assem., Senate Proceedings, May 4, 2010, at 34-35). The Act provides that employers may not:

"(1) Fail or refuse to hire or recruit, discharge, or otherwise discriminate against an individual with respect to employment, compensation, or a term, condition, or privilege of employment because of the ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.