Feature: Wednesday, August 13, 2003

A feisty little web site and hundreds of store managers say RadioShack has tried to put the corporate foot on their necks.

By April Kinserand Dan Malone

The way Ken Kujak saw it, the job he had was long on title and hours and short on authority and pay. RadioShack called him a “senior manager,” but Kujak thought of himself more as “senior stock boy” or “senior sales associate.” Yes, he had a few managerial duties, meetings to hold, forms to fill out. But those chores, he said, took no more than three or four percent of his time. What Kujak did — what everyone who worked in RadioShack’s 7,000 stores across the United States did — was sell.

Although Kujak said he was often required to work 55 or 60 hours a week, he was not paid overtime. Worse, he complained about it. “I was one of the few who had a big mouth,’’ Kujak said. He would ask his bosses: “Why are you forcing me to work Saturdays until 6 or 7 o’clock? I’m supposed to be a manager. Why can’t I set my own time?” But those conversations, he said, went “absolutely nowhere.”

After nine years of working weekends, nights, and holidays, Kujak decided to call it quits. “I decided at [age] 62 I was tired of this 55-hour baloney,” he said in a recent interview. He gave two months notice and started rolling his benefits out of the company. RadioShack responded, Kujak said, first by demoting him, then, “two weeks before I retired, they fired me.”

Today, Kujak, who lives in Sanger in Denton County, works part-time at Home Depot. He is also among about 1,000 past and present RadioShack employees who have recently joined a class action lawsuit accusing the electronics retailer of violating federal overtime laws — a court action that has sparked a sideline fight over free speech that pits the giant retailer against a tiny non-profit web site known as www.RadioShackSucks.com.

In its “Answers University” in the bottom floor of Fort Worth’s old Tandy Center, RadioShack displays numerous large color photos of smiling RadioShack workers and promotes itself as unequivocally “the best place to work.” But former employees say it’s anything but. In lawsuits filed in four states against the Fort Worth-based company, workers say RadioShack labels sales people as managers to avoid paying them overtime. A not-so-small fortune is at stake: One law firm suing the company says the unpaid overtime could total $100 million and affect 10,000 managers. The company has already paid out almost $30 million to settle one such lawsuit filed in California.

RadioShack critics say the dispute over pay morphed into a First Amendment fight about free speech after the company sued the RadioShackSucks site for defamation, temporarily shutting it down. And that fight has left RadioShack, a company with a stated vision to “connect people to the wonders of modern technology,” fighting accusations that it really just wants to silence the site that has become such a thorn in its side.

Mark Hill, RadioShack’s senior vice president, said the company is merely responding to attacks from disgruntled former workers and attorneys driven by multi-million-dollar settlements. The company says it treats its workers fairly and respects their First Amendment rights. “There was information posted on this site that we thought posed security threats to our system,” Hill said. “This cottage industry of overtime lawsuits has not singled out RadioShack ... . Many other major retailers are dealing with the same issue.”

RadioShackSucks, founded by a disgruntled customer and now run by a former store manager, features a bulletin board where more than 3,000 members carry on a disjointed conversation about a store some love and many hate. RadioShack claims it never intended to shut the site down, and that such sites are a nuisance big businesses must tolerate. Operators of “suck.com” sites have targeted corporations such as Wal-Mart, Best Buy, and Taco Bell, along with individuals such as Oprah Winfrey and George W. Bush. Some of the savvier companies were smart enough to acquire the domain names before their adversaries seized them.

In this case, RadioShack says the chatter on the site went beyond the bounds of protected speech when two former workers posted information the company said contained trade secrets, copyrighted software, and suggestions on how to defraud the company.

But Daniel Touhy, a Chicago lawyer who is suing the company, said there is no precedent for shutting down an internet bulletin board because of anonymously posted comments — regardless of what was said.

“It’s like suing Jay Leno because he’s hammering on some politician,” Touhy said. “I’ve never seen a temporary restraining order (like the one that briefly brought down RadioShackSucks) issued because of defamation.’’

Overtime policies aren’t the only complaints raised by current and former RadioShack employees. On the anti-RadioShack site and elsewhere, they describe the company’s “Big Brother” security practices, questionable inventory policies, and a culture that squeezes hours of extra work from some employees without paying them.

That’s not the reality Hill reports. The vice president said surveys show that RadioShack workers are satisfied and “see a bright future for themselves and the company.’’

RadioShack’s roots go back to two businesses founded in the early 1900s — a shoestring supplier in Fort Worth and ham radio mail-order house in Boston. The shoe supply company, which eventually grew into Tandy Corp., purchased Boston’s RadioShack in 1963 and racked up millions in the early 1970s with hugely profitable sales of CB radios and the TRS-80 personal computer, an inexpensive utilitarian laptop nicknamed “Trash 80’’ by its users.

Over the years, Tandy branched into other ventures, from tiles to department stores to imports, before repositioning itself in the retail electronics business. In 2000, the company changed its name from Tandy to RadioShack.

RadioShack’s presence in downtown has never been more visible. After a highly publicized fight, the Fort Worth Housing Authority moved out the poor people living in its Ripley Arnold public housing complex and sold the land on which it sat to RadioShack. In place of Ripley’s modest apartments, the company is building a new headquarters on the fringe of downtown, a “campus” of buildings that will dramatically alter the skyline from the north. The company’s name is spelled out in giant letters up and down the twin towers of what was once called the Tandy Center. Most consumers are familiar with the company: RadioShack estimates that 94 percent of all Americans live within five minutes of a store or dealer.

RadioShack is but the latest in a series of businesses to be hit with class action lawsuits over alleged violations of the federal Fair Labor Standards Act, or similar state laws. Those laws generally require employers to pay time-and-a-half to workers who put in more than 40 hours a week. The same law also exempts some workers, such as managers and some professionals, from overtime pay. According to one account, Starbucks, for example, recently settled a similar lawsuit for $18 million.

In California, attorney Robert Thompson said RadioShack routinely refused to pay overtime to managers in their larger stores, known internally as “y-store managers,’’ even though “the type of jobs they were doing was similar to their subordinates.’’

According to Thompson, workers classified by RadioShack as managers were managers largely in name only. They didn’t hire or fire. They often worked alone and hence often had no one to manage. Further, he said, the stores they supposedly managed were controlled so tightly by the corporate office in Fort Worth that managers had no leeway even on “where to stack batteries.’’ Managers were further required to sell, just as those they supposedly supervised were, but were also required to work far in excess of the 40 hours a week for which they were paid, he said.

The class action lawsuit filed by Thompson’s firm of Callahan, McCune & Willis, unlike claims filed by individuals, had to win judicial approval, or certification, before it could proceed. Shortly after the California suit was certified, RadioShack settled the case for $29.9 million — two-thirds of which, Thompson said, will eventually be divided among past and present RadioShack managers in California.

“It’s not that this is an isolated incident,’’ he said. “It’s clear that there are a lot of y-store managers in all of the 50 states that feel they’re not being paid in accordance with the law.’’

But Hill, the RadioShack vice president, said store managers are more than glorified sale associates. “A store manager has a broad range of responsibilities — inventory management, store profitability, employee scheduling, store appearance, hiring, training, [and] store displays,’’ he said. “There are a lot of managers who do work more than 40 hours a week, and there are some that don’t.’’

He said the company chose to settle the California lawsuit not because it had done anything wrong but because it was a “highly distracting piece of litigation and we felt it could drag on for two to three years. ... We thought it made sense to settle.’’

The ink had not dried on that settlement when the Chicago law firm of Touhy & Touhy filed a similar lawsuit on behalf of RadioShack workers. That suit, unlike the one in California which focused on workers in just one state, seeks to recover damages for perhaps as many as 10,000 underpaid RadioShack workers across the nation — and involves perhaps as much as $100 million in unpaid overtime.

That lawsuit was originally filed on behalf of David B. Tibbetts and three other RadioShack managers. Shortly after the class action lawsuit was filed, however, Tibbetts was fired for “unsatisfactory performance.” Tibbetts — who won company awards as a manager and “sales dominator” — has since filed a separate lawsuit claiming he was fired in retaliation for suing his employee of 13 years. The lawsuit that was originally filed on Tibbetts’ behalf is the same suit that Kujak and about a thousand other workers have joined.

U.S. District Judge Rebecca Pallmeyer’s 18-page ruling on the case gave the Touhy firm the go-ahead to proceed but also warned that the road before them was anything but certain.

Pallmeyer said RadioShack managers “were in charge of their stores, had only sporadic direct contact with supervisors, and earned substantially more than their subordinate sales associates’’ — factors that weigh in favor of the company. But she also noted that the managers devoted a large percentage of time to sales and that their “sales prowess was emphasized in RadioShack’s assessment of their performance.” Expressing some uncertainty about the outcome of the lawsuit, Pallmeyer concluded that the case could nevertheless proceed.

A few days after the class action was certified in June, RadioShack spokeswoman Kay Jackson told The Dallas Morning News that management was pleased the lawsuit had been certified as a class action so “these suits can be disposed of in an appropriate manner. We think these claims are without merit.’’

Touhy scratched his head when he saw Jackson’s comments in the Dallas paper. Not long after the quote appeared, attorneys for the company went back to court in Illinois, he said, asking permission to appeal the opinion the spokeswoman found so pleasing.

Jackson was not available for comment, but Hill said her comments were not inconsistent with the company’s appeal. “We believe that getting that ruling would allow us to get the issue of class certification reviewed” by an appellate court, he said.

News of the judge’s ruling also made its way to RadioShackSucks. The site, founded in 1998, was taken over by former RadioShack dealer Brad Jones in 2001. Jones continues to run the site through a company called RSS Fulfillment.

Jones said that he had been operating a RadioShack store in London, Ky., for more than 10 years when “RadioShack put a company-owned store in our town of 6,000 ... and proceeded to do everything in their power to squash me out of existence. When they could not run me out of business legitimately, they terminated my 17-year contract.” Jones sued and later settled for what he described as a “very small amount primarily due to the mounting legal expense.” He renamed his business and continues to operate “Radio World” with the slogan “Why settle for a shack ... when you can have the world.”

Jones said his initial visits to RadioShackSucks were motivated by his anger toward what the company had done to his business. Eventually, though, he saw that the site “had a much deeper meaning and purpose than that of a mere protest site. ... It was a community of people, most of whom were employees or ex-employees of RadioShack, who had nowhere else to vent their frustrations — people who had [an] audience nowhere else because the established corporate communications structure of RadioShack had let them down.”

William Mocahbee, a friend who has helped Jones with the design of the site, said he volunteered his time after seeing what RadioShack did to his friend. “He gave 16 years of his life to this company. I watched this man’s life be completely turned upside down,’’ he said. “When a big company is coming at you with both barrels, what can you do? All I see is one big corporation with a big sledge hammer trying to squash a little ant.”

RadioShackSucks contains a mix of juvenile humor, consumer complaints, and comments pro and con. A cartoon character meanders across the top of the page, pulls down his pants, and then urinates on a crossed-out RadioShack trademark symbol. Visitors are invited to “relieve a little stress” by distorting CEO and chairman Len Roberts’ picture with a few clicks and drags. Under a “RadioShack Horror Stories” caption, employees freely vent about obnoxious customers and managers. The site also peddles what it calls “SuckMan gear” — t-shirts and hats featuring a money-sucking character based loosely on the company symbol. Proceeds from the sale of the merchandise, according to the site’s attorney, pay for its upkeep and operation. Several messages warn users the site is constantly being monitored by RadioShack officials. And it’s not uncommon to see an occasional response to criticisms from RadioShack’s administration or Roberts himself.

The company apparently was content to merely monitor the site until shortly after the federal overtime lawsuit was certified as class action — news that was broadcast on the site and tied to links letting visitors find out how they could “opt-in” and join the litigation.

Shortly after the news of the lawsuit’s certification appeared on the web site, the company filed a lawsuit in Tarrant County against RadioShackSucks and two former Lakeland, Fla., employees named James Fix and Jonathan Wolf that had the effect — intentional or not — of temporarily shutting down the site.

The company claimed that the site promoted “business disparagement, libel, and fraudulent conduct against RadioShack” and persuaded a judge to issue a temporary restraining order stopping the web site from posting messages that RadioShack found objectionable. The order not only barred the site from posting comments that infringed upon RadioShack’s business operations — such as posts that the company claimed contained fraud schemes, trade secrets, and proprietary computer software information — but also forbade posting of any comments that would “disparage or defame RadioShack or its employees.”

Neither Fix nor Wolf could be reached for comment for this story. Wolf, according to court records, has enrolled in the military. Fix did not return calls to his cell phone.

The lawsuit claims that the pair, using the pseudonyms Shackmaster and Royalwolf, posted a series of messages that were causing RadioShack “irreparable injuries” that “cannot be calculated.” In one example cited by the company, Shackmaster advised a colleague on how to “pocket” the bulk of a $20 sale by voiding a ticket after a customer leaves and creating a bogus replacement. In another post, Shackmaster provides information on how to manipulate the cash drawer so any shortages will appear “the next day for someone else and you won’t be blamed.” Shackmaster also boasted about pirating RadioShack software that contained settings and passwords used by the corporation. And after Wolf was fired in April, there was a post from Royalwolf asking site users to place prank calls to the store where he worked and referring to his former manager as “stupid, fat, and psychotic.”

RadioShack officials said it was never their intention to shut down the site, and it is unclear exactly how long the site was off the air. Jones said he believes that it was taken down for about one week in mid-June. Fort Worth Weekly, however, could not find the site for more than two weeks this summer.

Kevin Vice, a Dallas attorney representing the site, said the shutdown occurred because the site operators “were trying to comply with the restraining order.” The posts from Fix and Wolf, he said, were immediately removed from the bulletin board, and both men were blocked from making further contributions.

However long it was gone, Vice, Jones, and attorneys involved in the class action lawsuit all say they believe that the lawsuit had less to do with comments by Shackmaster and Royalwolf than it did with the site’s producing more defendants in the class action lawsuit against the company.

“When the law firm started posting information on the web site is when this attack was made,” Vice says. “That’s really the purpose of it — to get class action advertisements off the bulletin board.’’

Ryan Stephan, one of the Chicago attorneys representing former managers in their overtime complaints, said he also believes “their real intention is to deny people their free speech. We think that this is their attempt to silence these employees.”

Added Jones: “Message boards are numerous throughout the worldwide web, and RadioShack is a topic of conversation on many of them. Why do you suppose they are only naming our message board in their lawsuit?”

He said he helped California and Illinois law firms “find potential opt-in participants for these lawsuits through the use of our message board as well as through posting of links for additional information. We are the place where former RadioShack managers are most likely to visit, which doesn’t speak very highly of RadioShack’s employer/employee relationships.”

Vice also said that the Telecommunications Act of 1996 blocked lawsuits against message-board operators based on comments posted by third parties with the declaration that “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

Charles Hodges, senior manager of media relations for RadioShack, said he does not believe there is any connection between the class action and “sucks” lawsuits. “[There were] other reasons why that action was filed against RadioShackSucks other than the overtime lawsuit,” he said. “If that’s someone’s speculation about our motivation, I think they are off base.

“We understand that there are obviously differing points of view on any issue,” he said. “In this case we felt they took some specific content too far.”

The restraining order against RadioShackSucks barring defamatory posting on the site expired July 13. The judge refused a request to enter a more permanent extension of his temporary order against the site and scheduled a hearing on the case for Aug. 25. In the meantime, RadioShack has provided the attorneys suing it with the names of 7,600 past or present managers who might possibly join the class action lawsuit. Letters to those managers informing them of the lawsuit were put in the mail earlier this month.

Len Roberts joined RadioShack in 1993 — about a year after Kujak started working for the company. Roberts’ talk about RadioShack being a caring place to work left Kujak with a feeling that someone at the top of the company truly cared about the people at the bottom who were putting in the long hours over holidays and weekends.

“I felt sure when Len Roberts came in it would turn around. He was going to make a lot of major changes to help the managers out. He did some fantastic things, cleaning up the stores and organizing them.”

But sweeping changes in how the giant retailer treated its workers failed to materialize, he said. “It just never came about.’’

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