Anheuser-Busch did not discriminate against Francine Katz, a former top-ranking female executive who alleged she’d been underpaid because of her gender, a ºüÀêÊÓƵ jury decided Friday.
A jury of seven women and five men deliberated for about 10 hours over two days before finding in favor of the company.
Katz, a lawyer who worked at A-B from 1988 until Belgian brewer InBev acquired the company in 2008, alleged in her lawsuit filed in 2009 that she had been underpaid because of her gender.
The trial in ºüÀêÊÓƵ Circuit Court, which stretched over three weeks, drew broad interest, in part, because the allegations focused on the actions of top executives at one of the city’s most storied corporations. It also offered a look at how women who climbed the corporate ladder at Anheuser-Busch were treated.
Thirty witnesses testified, including former CEOs August Busch III and his son, August Busch IV. Jurors heard about promotions and pay, golf outings and hunting lodges, job titles and corporate practices.
In the end, nine jurors — five women and four men — found Katz had failed to make her case.
Jury foreman Dorian Daniels, 30, who sided with A-B, said the jury took a hard look at the many spreadsheets, emails and other documents presented and couldn’t find evidence of sexual discrimination.
“We did really have to focus on the facts,†Daniels said. “I believe I didn’t have enough evidence to support it (claims of discrimination).â€
Another juror, Andy Jackson, 32, said he was swayed by video testimony of John Jacob, a former senior A-B communications executive whom Katz replaced in 2002. Jacob, a former president of the National Urban League and a civil rights leader, praised Katz’s work but said gender was never a consideration in pay at A-B.
But Kelli Best-Oliver, 33, a juror who sided with Katz, said she “felt very strongly that there was a pattern of gender discrimination†at A-B. Katz and another former A-B executive who testified, Marlene Coulis, weren’t treated the same in their compensation because they were women, she said.
“I know the significance of this case when it comes to women and sex discrimination, and it kills me I couldn’t do more,†Best-Oliver said.
After the verdict was read, Katz’s attorney Mary Anne Sedey leaned over to Katz and put her arm around her.
Katz, who lives in Richmond Heights, later told reporters, “I am disappointed, but at the same time I think that all the attention and discussion this lawsuit sparked will do some good.â€
“I hope this opens the door for women in the workforce. We may not have won, but you can’t ever win if you don’t try,†Katz said.
Asked whether she planned to appeal, Sedey said it was “very premature to talk about that.â€
Katz was seeking $9.4 million in missed compensation and about $5 million in interest for pay dating back to 2002.
A-B attorney Jim Bennett declined to comment, but in a statement issued shortly after the verdict was announced, A-B said the company has always been committed to fair treatment of its employees.
“We are pleased with today’s verdict, and the jury’s acknowledgment that Francine Katz was always treated and compensated fairly during her 20 years of employment at Anheuser-Busch,†said A-B spokesman Adam Warrington.
“Anheuser-Busch always has been and always will be committed to treating our employees fairly and consistent with the highest standards.â€
THE CASE
Katz’s case revolved around issues of fairness — whether her compensation adequately reflected her duties compared with those of both her predecessor and other male executives at Anheuser-Busch.
After she was promoted in 2002 to vice president of communications and consumer affairs, Katz made more than $1 million annually, including her base pay, salary and stock options.
But five years after her promotion, her base salary and bonus was still 46 percent lower than her male predecessor, Jacob, and less than every male executive on A-B’s strategy committee, she alleged. Katz testified that she didn’t find out about the discrepancy in pay until she saw a regulatory filing tied to InBev purchase of A-B in 2008.
The last three CEOs to lead the company before the sale — Busch III, Patrick Stokes and Busch IV — each praised Katz’s work and denied that gender had been a factor in her pay.
Under questioning from Sedey on May 2, the senior Busch said Katz was a top performer at A-B and he recalled asking her to respond to questions on controversial topics asked at company shareholder meetings.
“She did a very good job on her feet,†Busch III said. “She impressed me.â€
The elder Busch also said he and the compensation committee relied on common sense and judgment to come up with salaries when there weren’t adequate matches with peer companies in data provided by Hewitt, a consulting firm A-B used for executive compensation.
Katz contended that a market rate A-B used to set her pay, based on top public relations executives, wasn’t a good match because of the broader roles she held.
Jacob held an advisory role unique in the company, leading to his salary totaling 50 percent of the CEOs’ salary, Busch III said. “He was my confidant. Whatever I was doing, he was doing,†he continued. “There was no comparison between John Jacob and Francine Katz.â€
Busch III also denied gender was a factor in pay and said he had increased Katz’s pay. “We made damn sure she was compensated,†he said.
As the former CEOs answered attorneys’ questions, Katz sat a wooden table, just steps away from the executives she previously worked closely with for 20 years.
Like his father, Busch IV praised Katz’s work when he testified May 6.
“Francine Katz was one of the best in the business, wasn’t she?†Katz’s attorney Donna Harper asked, referring to her work on anti-drunk driving and underage drinking initiatives. “Yes,†Busch IV replied.
Referring to Katz’s efforts to work with legislators to keep excise taxes down, he said: “She did an outstanding job.â€
When Harper pressed him on why Katz’s requests to have her salary re-evaluated were ignored, Busch IV said the sale of InBev took place before that could happen. “Unfortunately, we were sold that year,†Busch IV said.
Testimony in the Katz trial at times illuminated the dynamics between executives.
Jacob once wrote to Katz in an email — which was entered into evidence — that Busch III avoided a conversation with her because he thought she might cry. Responding to a question about his father’s temper, Busch IV said: “I got a lot of it,†he said. “I tried to stay in front and take as many bullets as possible.â€
The testimony also provided some behind-the-scenes moments at the brewer as the sale to InBev was unfolding.
David Peacock, A-B’s vice president of marketing who became president in November 2008, said that when InBev first made its unsolicited offer to buy the company for $65 a share, he and a handful of executives quickly assembled along with then-CEO August Busch IV to figure out their next steps.
The senior executives opted to “redouble†A-B’s efforts to cut costs throughout the company, an effort dubbed “Blue Ocean,†Peacock said.
“People never believed that A-B would ever be sold … there was a lot of emotion,†he said.
But when InBev offered $70 a share, A-B’s board accepted the offer. “The management team looked around and said, ‘We just got sold,’ †Peacock recounted. Peacock said he flew to New York to meet with InBev representative to help develop a severance plan for executives.
“For top people, you tend to see more people leave because there’s duplication,†Peacock said, adding his objective was to get as much as he could for A-B executives who left after the sale.
Executives were put into tiers based on the market rate for their jobs, information that was released in public filings tied to the sale. Top executives, all male, whose market rates were $350,000 or more, were in the top tier. A group of about 20 executives, including Katz, below that figure were in the second tier, which provided fewer benefits.
Katz repeatedly asked her supervisors to re-evaluate her salary after she was promoted in 2002 but was ignored and called “ungrateful†by August Busch III, Sedey said in her closing arguments Thursday.
“One of the problems of women in the workplace is we don’t speak up,†Sedey said, adding women are “damned if we do and damned if we don’t.â€
The difference with Katz, Sedey told jurors, is she fought back. “She stuck up for herself.â€
Marcia McCormick, a professor at ºüÀêÊÓƵ University School of Law and co-director of the school’s William C. Wefel Center for Employment Law, said she believed the jury’s majority was unable to “draw a straight line†between Katz and another company executive in her identical position.
“I think they wanted to find someone just like her but who was paid more and who was a man,†she said. “They wanted to compare people who were alike.â€
McCormick followed the case closely and said the lengthy jury deliberation and jurors’ requests for information about company salaries had prompted her to think that Katz would be awarded damages before the verdict was announced.
“This was a hard case in a lot of ways,†said McCormick, adding that the attorneys on both sides had presented their cases skillfully.
Tim Bryant of the Post-Dispatch contributed to this report.
Editor's note: Corrects a quote from jurorÌýKelli Best-Oliver.