Employee Misconduct – JCPenney vs. Locklear

Employee Misconduct – JCPenney vs. Locklear

Jim G. Locklear was a purchasing agent. His spectacular career as a buyer began in 1977 with Federated Stores in Dallas, Texas. Federated officers described him as a man with an eye for fashion and a keen ability to negotiate. In 1987, Mr. Locklear was offered a position with Jordan Marsh, in the Boston area, with an annual salary of $96,000.

Citing a desire to return to Dallas, Mr. Locklear left the Jordan Marsh position after only three months. He returned to Dallas as a buyer for JCPenney at an annual salary of $56,000. Mr. Locklear did a phenomenal job as the buyer for the JCPenney Home Collection. JCPenney was the first department store to feature coordinated lines of software, flatware, and glasses. Under Mr. Locklear’s purchasing, annual sales in JCPenney’s tabletop line went from $25 million to $45 million.

Based on an anonymous tip, JCPenney hired an investigator to look into Mr. Locklear’s conduct. The investigator found and reported that Mr. Locklear had personal financial difficulties. He had a $500,000 mortgage on his home and child support payments of $900 a month for four children from four previous marriages. Mr. Locklear also had a country club membership, luxury vehicles, and large securities accounts; he was known to take vacations at posh resorts. Despite this puzzling lifestyle revealed by the investigator, JCPenney took no action.

In 1992, JCPenney received an anonymous letter disclosing a kickback situation between Mr. Locklear and a manufacturer’s representative. JCPenney investigated a second time, referred the case for criminal prosecution, and filed a civil suit against Mr. Locklear.

The investigation conducted by authorities found that Mr. Locklear received payments from vendors through several corporations he had established. During the five-year period from 1987 to 1992, Mr. Locklear had received $1.5 million from vendors, manufacturers’ representatives, and others.

Mr. Locklear was charged with commercial bribery and entered in a plea agreement. Mr. Locklear also served as a witness for the prosecution of those who paid him the bribes. A vendor described his payment of a $25,000 fee to Mr. Locklear as follows: “It was either pay it or go out of business.” Mr. Locklear was sentenced to eighteen months in federal prison, less than the five-year maximum, due to his cooperation.

1.Should JCPenney have known of the difficulties earlier? Explain.

2.Was Mr. Locklear’s personal life responsible for his poor value choices at work?

3.Is anyone really harmed by Mr. Locklear’s activity? Wasn’t he a good buyer?

4.If you were Mr. Locklear’s supervisor/manager, what specific actions or steps could you have taken to reduce the chances of this problem ever occurring in the first place? 

 

ANSWER Needs to be in Question/Answer format, not essay format.

 

 

 

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  1. Should JCPenney have known of the difficulties earlier? Explain.

The first red flag should have been when Locklear accepted a job with a salary of $56,000 down from that of $96,000. JCPenny should have been aware of his previous employment because such information is always available or asked of any new employee. At the same time, it is advisable to conduct employee background check to ascertain if they fit the lifestyle that they are living.  Thus JCPenney should…

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