Question

The small group gathered in a conference room at a Red Roof Inn near Pittsburgh had a common bond and an unusual goal. They all worked for restaurants in the Red Lobster chain. Now they had to figure out whether a Red Lobster waitress had been unjustly fired. The panel included a general manager, an assistant manager, a server, a hostess and a bartender, all of whom had volunteered to review circumstances of the firing and had been told simply to do what they felt was fair.

The waitress, Ruth Hatton, was fired in 1996 for stealing a guest-comment card from the Pleasant Hills, Pa., Red Lobster where she worked. Ms. Hatton was then a 19-year Red Lobster veteran; when she was fired, she says, "it felt like a knife going through me." –– ADVERTISEMENT –– But Red Lobster allows employees who have been fired or disciplined to appeal to panels of co- workers, who hear testimony and can overturn management decisions and award damages. Thus, instead of suing, Ms. Hatton called for peer review, which took place three weeks after the firing. Across the country, a growing number of companies, including TRW Inc., Rockwell International Corp. and Marriott International Inc., are adopting similar ways of limiting worker lawsuits and easing workplace tensions. The most popular method is peer review, which lawyers say is particularly effective because it channels the pain and fury employees feel after being fired.

Darden Restaurants Inc., the Orlando, Fla., company that owns the Red Lobster and Olive Garden chains and has 110,000 workers, adopted peer review four years ago. The program has been "tremendously successful" in keeping valuable employees from unfair dismissal and cutting $1 million from annual legal expenses for employee disputes, which now total $3.5 million, says general counsel Clifford Whitehill. Until recent changes, about 100 disputes end up in peer review yearly, with only 10 resulting in lawsuits. Red Lobster managers and many employees also credit peer review with reducing racial tensions. They say peer review has, in some cases, reversed decisions by managers who overreacted to complaints from minority customers and employees.

Ms. Hatton's case, like at least half of the dozen or so disputes to go through peer review in the company's Pittsburgh region had a racial component. Ms. Hatton, who is white, was fired for pocketing a black couple's comment card complaining their prime rib was "rare" and their waitress "uncooperative." Ms. Hatton says she intended to show the card to her boss, not to steal it. Ms. Hatton chose peer review over going to court because it was "a lot cheaper," she says, adding: "I also liked the idea of being judged by people who know how things work in a little restaurant." Diane K. Canant, the Pleasant Hills restaurant's general manager, testified first. Ms. Canant, who supervised about 100 employees, said she fired Ms. Hatton after the irate customer complained to her and her supervisor. Through circumstances that remain unclear, the customer learned that Ms. Hatton had removed her comment card from the box.

"The customer felt violated because her card was taken from the box, and she felt that her complaint about the food had been ignored," Ms. Canant recalls telling the peer-review panel. Brandishing a company rule book, the manager said Ms. Hatton had violated a policy forbidding the removal of company property. Ms. Hatton, who says she received dozens of calls of support, testified next. The waitress, 53 years old at the time, explained that the woman had requested a well-done piece of prime rib and complained that the meat was fatty and undercooked. Ms. Hatton said she politely suggested that "prime rib always has fat on it," and the woman scowled. Ms. Hatton didn't explain her comment to the panel. She says now that she thought that, based on her experience with black customers in the working-class area, the customer might have confused prime rib and spare rib. Ms. Hatton then had the meat cooked some more. When the customer remained displeased, Ms. Hatton offered a free dessert. Apparently still unhappy, the woman doused the meat with steak sauce and then shoved away her plate. She or her companion then filled out a comment card, paid the bill and left, Ms. Hatton said. Consumed by curiosity, Ms. Hatton asked the hostess for the key to the comment box. She said she read the card, then pocketed it, intending to show it to Ms. Canant, who had fretted earlier that the prime rib was overcooked, not undercooked. Because of a problem that day heating the prime rib to the proper temperature, Ms. Hatton said, the restaurant was serving meat that had been cooked the previous day and then reheated. Ms. Hatton said further that she forgot about the card and inadvertently threw it out. (Red Lobster says it's against company policy to serve reheated meat. The chain no longer serves prime rib.) Third and last to testify was the hostess, Dawn Brown, then a 17-year-old student employed at the Pleasant Hills Red Lobster for the summer. "I didn't think it was a big deal to give her the key," she recalls telling the panel. "A lot of people would come up to me to get it."

In deliberations, panelists balanced the facts that a customer's feelings had been hurt and that an unofficial policy forbidding employees from going into the comment box had been violated against their belief that Ms. Hatton hadn't intended to steal company property. "We basically believed her. Ruth may not have really wanted Diane to see the comment card, but she really didn't think she had done anything wrong," says panelist Larry Simpson, the general manager of the Greensburg, Pa., Red Lobster and a friend of Ms. Canant's. All of the panelists had peer-review training and were being paid regular wages and travel expenses. Several panelists criticized Ms. Canant for not putting a rebuke in Ms. Hatton's personnel file and leaving it at that. Others suggested that her hands might have been tied by corporate headquarters. "Red Lobster is sensitive to race on a corporate level, and Florida could have said, 'Whack her. You have someone who [upset] a guest,' " Mr. Simpson says. "I think the whole thing snowballed." The panelists' views initially split by rank, with the hourly workers supporting Ms. Hatton. "By the end we were all going in the same direction," Mr. Simpson says. After an hour and a half, they unanimously restored Ms. Hatton's job. The unofficial policy against reading the contents of a comment box, they reasoned, hadn't been enforced at the restaurant. Still, because policy had been violated, the panel didn't grant the waitress the three weeks of lost wages she sought. Mr. Whitehill, Darden's general counsel, says the panel "reached the right result." Given Ms. Hatton's years of experience, he says, "she's somebody we want to keep." Ms. Canant says it "didn't bother me a bit that she got her job back." When she returned to work, Ms. Hatton says Ms. Canant treated her professionally and even cut her some slack when she had a bad back. When the manager transferred to Texas last summer, Ms. Hatton contributed to a going-away gift. "The process worked," the waitress says. "The panel took my claim seriously."

part 1) According to the article, peer review panels... (Please select all that apply)

a.		have decreased the legal costs of firms that attempted to use them
b.		are valued by Red Lobster management
c.		have increased the legal costs of firms that attempted to use them
d.		have been successful in preventing loss of valuable employees caused by poor termination decisions by managers
		e. are valued by Red Lobster employees part 2 Which of the following can we conclude from the article? Ms. Hatton was lying when she claimed that she pocketed the comment intending to show it to her boss but forgot about the card and inadvertently threw it out Ms. Hatton was telling the truth when she claimed that she pocketed the comment intending to show it to her boss but forgot about the card and inadvertently threw it out On the day that she took the comment, Ms. Hatton was the only employee who violated Red Lobster policy It was unusual for employees at the Pleasant Hills, PA Red Lobster restaurant to go into the comment box All of the above None of the above part3) Which of the following are true according to the article? Please select all that apply. The peer review panel included hourly workers The peer review panel included salaried workers Members of the peer review panel all received peer-review training Red Lobster provided detailed guidelines to the peer review panelists on how to decide the case The peer review panel included members who did not work for Red Lobster The peer review panel included junior employees The peer review panel included senior managers part4) Which of the following are true according to the article? Please select all that apply. The manager who fired Ms. Hatton was dissatisfied with the decision of the peer review panel Members of the peer review panel initially agreed with each other The panel supported the decision of the manager who fired Ms. Hatton Members of the peer review panel eventually agreed with each other

Answer 1

1. Answer: a, b, d, e

Explanation:

Why option a is true: The program has been "tremendously successful" in keeping valuable employees from unfair dismissal and cutting $1 million from annual legal expenses for employee disputes, which now total $3.5 million, says general counsel Clifford Whitehill.

Why options b and e are true: Red Lobster managers and many employees also credit peer review with reducing racial tensions.

Why option d is true: They say peer review has, in some cases, reversed decisions by managers who overreacted to complaints from minority customers and employees.

2. Answer: None of the above.

Explanation:

Why this option this correct: There is no evidence to show that she was lying or that she was telling the truth. There is also no information on whether any other employee violated Red Lobster policy that day. Also, Dawn Brown said, “I didn't think it was a big deal to give her the key," “A lot of people would come up to me to get it." So this practice was usual.

3. Answers: The peer review panel included hourly workers, Members of the peer review panel all received peer-review training, The peer review panel included junior employees, The peer review panel included senior managers

Explanation:

“The panelists' views initially split by rank, with the hourly workers supporting Ms. Hatton.” This statement shows that peer review panel included hourly workers.

“The panel included a general manager, an assistant manager, a server, a hostess and a bartender.” This statement shows that the panel included junior employees and senior managers.

“All of the panelists had peer-review training and were being paid regular wages and travel expenses.” This statement shows that the members of the peer review panel all received peer-review training. This also shows that they were all paid wages and not salaries.

4. Answer: Members of the peer review panel eventually agreed with each other

Explanation:

“The panelists' views initially split by rank, with the hourly workers supporting Ms. Hatton. "By the end we were all going in the same direction," Mr. Simpson says.” This statement shows that the review panel eventually agreed with each other.