MURRAY v. WAL-MART STORES INC et al

Filing 52

AMENDED MEMORANDUM DECISION AND ORDER ON DISCOVERY DISPUTE By MAGISTRATE JUDGE JOHN H. RICH III. (Attachments: # 1 "Exhibit A", # 2 "Exhibit C")(ccs)

Murray v. Wal-Mart Stores, Inc., et al.

Videotaped Deposition of: Alan Heinbaugh

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UNITED STATES DISTRICT COURT
District of Maine

DAVID E. MURRAY,

EXHIBIT

A

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Plaintiff,

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vs.

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WAL-MART STORES, INC., et al.,

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Defendants.

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VIDEOTAPED DEPOSITION OF: ALAN HEINBAUGH

Taken before Cheryl C. Pieske, Notary Public, in and
for the State of Maine, on SEPTEMBER 30, 2016, at the
offices of Johnson, Webbert & Young, LLP, 160 Capitol
Street, Augusta, Maine, commencing at 9:03 a.m., pursuant
to notice given.
APPEARANCES:
FOR THE PLAINTIFF:

DAVID G. WEBBERT, ESQ.
MAX I. BROOKS, ESQ.
Johnson, Webbert & Young
160 Capital Street
Augusta, ME 04332-0079

FOR THE DEFENDANTS:

RONALD W. SCHNEIDER, JR., ESQ.
Bernstein Shur
100 Middle Street
Portland, ME 04104-5029

Also present:

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Mr. David Murray

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A. Probably two of the three.
Q. And how was she bullying them?
A. E-mails; getting the previous market manager and me

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for a while, but mainly the previous market manager,
to hold them accountable for different things. She
was just short in her words.
Q. She was too demanding?
A. She was demanding. She was -- she is in a
position -- she was in a position of influence, not
directive.
Q. And do you know where her employment stands with
Wal-Mart?
A. Well, she left them. She went out on LOA and never
came back.
Q. Did she ever make any complaints about you?
A. No.
Q. Do you think your feedback played a role in her
employment ending?
A. She did make a complaint with me. What that
complaint was, I don't know. But when they started
asking questions, actually, the store managers,
basically, were saying, "Alan is not the problem.
It's Ruth that's the problem." And then the
questions started going towards her performance, not
mine, and then she just comped out, LOA, and never
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came back.
Q. Your understanding is that the investigation started
out as a result of a complaint by her against you?
A. Correct.
Q. Were you told what the complaint was?
MR. SCHNEIDER: Objection.
A. I don't recall.
BY MR. WEBBERT:
Q. Was that a redbook investigation?
MR. SCHNEIDER: Objection.
A. Could have been.
BY MR. WEBBERT:
Q. Were you interviewed?
MR. SCHNEIDER: Objection.
A. Yeah, I guess I was questioned by the regional HR.
BY MR. WEBBERT:
Q. And is that how you learned that Ruth Dodge had made
a complaint against you?
MR. SCHNEIDER: Objection.
A. Uh-hmm.
BY MR. WEBBERT:
Q. Yes?
A. Yes.
Q. Did her complaint have anything to do with her
gender or sex?

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MR. SCHNEIDER: Objection.

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A. I don't know. I don't think so.

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BY MR. WEBBERT:
Q. Do you know what the nature of her complaint was?
MR. SCHNEIDER: Objection.
A. I think that I was just too difficult to work with,
but I really don't know specifically what the
complaint was.
BY MR. WEBBERT:
Q. And was that a redbook investigation with Janet
Deans?
MR. SCHNEIDER: Objection.
A. No.
BY MR. WEBBERT:
Q. What kind of investigation was it?
MR. SCHNEIDER: Objection.
BY MR. WEBBERT:
Q. I thought you said there was a complaint by her and
that it was investigated, and you were found
innocent. Is that right?
MR. SCHNEIDER: Objection.
A. Yes.
BY MR. WEBBERT:
Q. Was it a redbook investigation?
MR. SCHNEIDER: Objection.
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A. Probably. Possibly. I don't know.
BY MR. WEBBERT:
Q. What are the different kinds of investigations that
Wal-Mart does when there's a complaint of employment
discrimination?
A. Redbook. Sometimes, depending what it is, it's
conversational for fact-finding. Like that.
Q. Any other kinds?
A. Not that I'm aware of.
Q. So is the redbook the formal investigation?
A. Formal?
Q. Yes?
A. Yes.
Q. And if there's a concern about a financial
impropriety at a store, does that result in a
different kind of investigation?
A. That may be an asset protection investigation.
Q. Do you recall an issue with markdown issues at the
Waterville store?
MR. SCHNEIDER: Objection.
A. Yes.
BY MR. WEBBERT:
Q. Did you report concerns about that?
MR. SCHNEIDER: Objection.
A. What I had said during that investigation was that

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Videotaped Deposition of: Alan Heinbaugh

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there was markdowns that weren't taken that I felt
should have been taken.
BY MR. WEBBERT:
Q. Can you explain that a little more?
A. If you have inventory that's unsellable, you are to
mark it down to zero right then. You're not
supposed to carry that inventory on your books into
the next month, the next quarter, the next year.
Q. And is this when you took over the Waterville store
from David Murray?
A. Yup. Yes.
Q. And fairly soon after you took over, you reported
this to Wal-Mart?
A. That came up in their investigation about markdowns.
Q. Did you initiate that investigation?
A. I don't know that I -MR. SCHNEIDER: Objection.
A. -- initiated it.
BY MR. WEBBERT:
Q. Is it possible that you initiated it?
MR. SCHNEIDER: Objection.
A. I don't know.
BY MR. WEBBERT:
Q. Did you raise a concern about David Murray's
markdowns fairly soon after you took over the

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that simple. If a TV is broken, it's cracked, if an
electronic radio doesn't work, if something is out
of date, something is damaged that no one would buy
it, that's unsaleable.
Okay. Let's talk about that because I have
purchased things that are damaged at discount. So
I'm not sure I understand your assumption that any
kind of damaged product would be unsaleable. Can
you explain that further?
Sure. If a TV screen is cracked, if a radio doesn't
turn on or it crackles, or if something is out of
date, you can't purchase it.
Sometimes customers are willing to buy something out
of date, aren't they?
Not in Wal-Mart. We don't sell anything that's out
of date, knowingly sell anything out of date.
You know, like cars. New models come out and you -We don't sell cars.
Right. But customers will buy things that are out
of date if they get a big enough discount sometimes,
right?
Cars never are out of date.
The year is out of date.
Is last year's date.
Right. That's out of date, right?

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Waterville store?

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A. I had a discussion about markdowns and deleted and

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clearance inventory in excess.
Deleted and clearance and?
Markdowns, unsalables, nonsalable merchandise.
Did you report that to Paul Busby or somebody else?
Paul Busby.
How soon after you took over the Waterville store
did you report that?
A. Months, within months.
Q. And you took over in about March of 2014?
A. February of -- I believe it was February.
Q. And this was improprieties that you thought occurred
while David Murray was the market manager?
MR. SCHNEIDER: Objection.
A. I expressed concerns about the amounts of that
inventory.
BY MR. WEBBERT:
Q. And is there any discretion in the markdowns?
A. Yes, there is.
Q. So part of the discretion is deciding whether it's
completely nonsalable?
A. I would disagree with that. I mean -Q. It's a question.
A. You can either sell it or you can't. It's really

A. No. It's just a different date.
Q. Making a judgment call about whether something is

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out of date is discretionary, isn't it?

A. No.
Q. So is the latest version of Word out of date as soon
as there's a new version?
A. I don't know if it's out of date. It's not new.
Q. Right.
A. It's not the newest version.
Q. It's a gray area, right?
A. If a bottle of aspirin is out of date, it's out of
date.
Q. Is everything that cut and dry about whether it's
out of date?
A. Not everything, no.
Q. So what did you report about your estimate of the
items that should have been marked down that
weren't?
MR. SCHNEIDER: David, can I just -- are you
asking him what he reported to Paul Busby?
MR. WEBBERT: No.
MR. SCHNEIDER: Okay.
A. So what did I report?
BY MR. WEBBERT:
Q. Yup.

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MR. SCHNEIDER: Well -MR. WEBBERT: You can say "objection" every

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time.

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Q. Was he primarily responsible for the markdown

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decisions that you were questioning?
A. He's the manager of the store, so, yes.
Q. And now he's currently serving as a store manager?
A. He is.
Q. Which store?
A. He just went to Auburn, Maine.
Q. And that has larger sales than Waterville?
A. Yup. It does.
Q. Is that the store in Maine with the most sales?
A. I believe it still carries that title.
Q. Is it fair to say that you wouldn't send him to the
store with the most sales if you didn't think he was
one of the better store managers?
A. Well, I didn't send him there.
Q. I'm sorry. Wal-Mart wouldn't have him as the store
manager for Auburn unless they thought he was one of
the better store managers in Maine, right?
A. Correct. At the time he was in Waterville, he was
not one of the better store managers.
Q. And you reported your concerns to Paul Busby you
said, right?
A. Uh-hmm.
Q. Did you have any further involvement in that issue?
MR. SCHNEIDER: Objection.
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A. There was an investigation.
BY MR. WEBBERT:
Q. Were you interviewed in the investigation?
A. Yup.
Q. Do you remember about when that interview was?
A. Middle of that year.
Q. So middle of 2014?
A. Probably.
Q. Were you ever told -A. Well, first quarter, second quarter.
Q. Were you ever told what the conclusions of the
investigation were?
MR. SCHNEIDER: Objection.
A. No.
BY MR. WEBBERT:
Q. Do you have any sense of what the result of the
investigation was?
MR. SCHNEIDER: Objection.
A. No.
BY MR. WEBBERT:
Q. So if they had found improper markdowns, what would
the next procedure normally be?
A. Accountability.
Q. What -A. Yeah, accountability.

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MR. SCHNEIDER: No, no, no, because I need to
know whether I -- who -- reporting to who.
MR. WEBBERT: You can object.
MR. SCHNEIDER: No. I need -- I may have to
do more than just object.
MR. WEBBERT: Could you read the -- can we
have the question read back?
MR. SCHNEIDER: Yeah.
MR. WEBBERT: It might help.
MR. SCHNEIDER: I'm just trying to tailor it
so that I understand what you're asking.
(Question read as follows by reporter: So what
did you report about the estimate of the items that
should have been marked down that weren't?)
A. I don't recall an estimate, dollar value.
BY MR. WEBBERT:
Q. You testified I thought that the size of the
markdowns was one of your major concerns, right?
A. Not -- not the amount that was taken, the amount
that should have been accounted for.
Q. Right. That's the number I'm asking about.
A. I don't recall having a number.
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Q. Right, but a range. Was it under $5?
A. I don't recall how much it was. $5 is not much,
so...
Q. It was more than that, right?
A. Sure.
Q. So for it to be of worthy of your attention, it had
to be above $5, right?
A. It was thousands of dollars.
Q. Above 10,000?
A. I don't recall.
Q. Is it likely it was above 10,000 in your view?
A. Likely.
Q. Is it likely it was above 50,000?
A. I don't recall. I would say well over ten, but I
don't know how much.
Q. And who was responsible for doing the marking down
at the Waterville store?
A. The store manager followed up by market manager.
Q. And the store manager was whom?
A. McCafferty.
Q. Did he get in trouble for the markdown?
MR. SCHNEIDER: Objection.
A. There were discussions with me about what his
obligation was on dealing with markdowns.
BY MR. WEBBERT:

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Videotaped Deposition of: Alan Heinbaugh

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Q. What kind of accountability?
A. I don't know.
Q. Well, you're a market manager responsible for

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markdowns indirectly through your store managers,
right?
Uh-hmm.
What do you understand to be the accountability if
you were to intentionally not mark items down?
It could be getting written up.
Any criminal liability?
I don't think so.
And what do you think -- given the scale of the
issue that you saw in Waterville, what do you think,
if it was intentionally done, what would be the
appropriate consequences?
Accountability.
A coaching?
Yup.
Termination?
It depends. Maybe. Maybe not.
And given what you know, do you think the store
manager was primarily responsible for the markdown
issues that you saw?
The store manager was insistent that it was
following the market direction.
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What does that mean, the market direction?
Murray's direction.
The market manager?
Uh-hmm.
Did you believe him?
I didn't have a reason not to.
Did the store manager think that it was legitimate
the way he had handled the markdowns?
Yup, he did.
And can you give any examples of things that weren't
marked down that you thought obviously should have
been?
TVs, electronics, out of dates. Well, I picked
up -- I picked up two stores. I couldn't tell you
specifically how much Waterville had, but Skowhegan
had over 80 pallets of clearance deleted packed up,
wrapped up in their steel and plus what was on the
floor, which is a lot.
So besides Waterville, what was the other store?
Skowhegan.
Okay. And you're saying you observed in Skowhegan a
problem with markdowns, too?
Not -- yeah. Not taking markdowns, yes.
And the evidence was? You said there was?
Over 80 pallets plus what was on the floor.

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80 pallets of?
Clearance deleted.
What is clearance deleted?
Things that are out of season. Like right now,
summer is out of season. We're going into winter.
It should be clearanced and sold, or if you have
Easter or Valentine's or 4th of July, it's out of
season now. That would be both clearance and
deleted because it goes deleted, and then it's
clearanced. Deleted means it's nonreorderable at
the time. And the same with side counter stock,
things become deleted, taken out of a modular, and
then they go clearance after they're deleted.
Did you report concerns about the lack of markdowns
in Skowhegan?
Oh, yeah.
Was that investigated, too?
I don't know.
Were you interviewed about it?
I don't remember Skowhegan.
And what were the 80 pallets?
It's stuff that should have been gone: Out of
season stuff, old merchandise, things that didn't
have a home.
So they should have been sold before they got
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wrapped up?
Typically.
Do they have any value when the season comes back?
Yup. Sometimes it does, yup.
Is it possible you get more money if you wait until
the next season when it's appropriate?
If it's still a viable product, yup.
Is that a legitimate strategy?
Sure, it's legitimate.
Was clearance/deleted ownership an overall issue in
2013 in the region you worked in?
Yup.
Tell me about that. What was the discussion about
it being an issue generally?
That corporately we were holding onto too much
clearance/deleted. We had exit strategies to get
through that. You know, value price to put it on
end caps, put it in a clearance/deleted aisle.
There was a PowerPoint that came out on how to
display it, take progressive markdowns.
So this was recognized as an across-the-board
problem?
Uh-hmm.
Had you gotten ahead of that in all of your stores?
I had. I had the lowest clearance/deleted in the
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Q. So you were more successful than all the other

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market managers in getting ahead of this issue; is
that right?
I was.
But you understood that this issue was not limited
to David Murray's market, right?
No. There was a lot of clearance/deleted that
wasn't dealt with the way we were showed to.
The new standards?
Standards, yup.
And they had changed in 2013; is that right?
I don't know that they had changed. They had -- it
was just another way of getting through that
merchandise.
Fair to say that there was a push throughout the
entire region to change how deleted ownership was
handled?
Fair.
And you're saying in 2013 it was recognized that
many stores were holding onto too much merchandise
that had become less saleable and, perhaps, even not
saleable at all; is that right?
Correct.
And was the region still working on that in 2014?
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I don't know when Julie had sent out the PowerPoint.
'12, '13, '14, I don't know. It had been sent out a
couple different times a couple of different ways,
so...
So your recollection is the first one wasn't enough.
They had to follow up on it and keep working on it?
Yup. Sure.
So it took over a year to get on top of that
problem?
Yup.
Do you remember a Brad Rosenberry?
I do.
Was he an employee that worked with you?
Yup. He was a store manager in Brewer.
Did you have issues with his performance?
I did.
Did he lose his job?
He resigned. He quit. I had coached him, put him
on a PIP. He had quit. He came back two weeks
later. Paul reinstated him. I gave him a week back
in the store. I came back in, talked to him, put
him back on his performance improvement plan; and I
think he quit like within three days of that again.
MR. SCHNEIDER: I'm going to object. David,
one thing I realized yesterday that we did not do,

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we did not designate the deposition as confidential.
MR. WEBBERT: I think the confidentiality
issue gives you some time to do that.
MR. SCHNEIDER: Right. So we have to do -- I
just thought we should be put that on the record for
today, too, right now, because I just thought about
it. You're, obviously, talking about other third
parties, so...
MR. WEBBERT: Right. We have a confidential
order that allows -MR. SCHNEIDER: No. I understand.
MR. WEBBERT: -- 15 days after the transcript
is issued. So I agree.
MR. SCHNEIDER: Okay.
BY MR. WEBBERT:
Q. Approximately when did Brad Rosenberry quit?
A. 2009 maybe.
Q. Did he make any complaints about you?
MR. SCHNEIDER: Objection.
A. I don't think he liked me. But did he make a formal
complaint? I don't recall a formal complaint.
BY MR. WEBBERT:
Q. Did he make an informal complaint about you to
anyone else?
MR. SCHNEIDER: Objection.
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BY MR. WEBBERT:
Q. Do you recall the nature of his complaint?
A. No.
Q. Did she talk to you about it?
A. What's that?
Q. Did Ruth talk to you about his complaint?
A. No.
Q. How did you find out about it?
A. I guess it was Busby. It was a long time ago.
Q. Did any Wal-Mart employees ever file legal claims
against Wal-Mart based on adverse actions that you
contributed to?
MR. SCHNEIDER: Objection.
A. Not to my knowledge.
BY MR. WEBBERT:
Q. So did Brad Rosenberry file any complaints about the
end of his employment?
MR. SCHNEIDER: Objection.
A. Not to my knowledge.
BY MR. WEBBERT:
Q. Have you received training from Wal-Mart on the laws
prohibiting sexual harassment?
A. Yeah.
Q. Tell me about that training.

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