Progressive Rentals December 2005-January 2006

Theft is Such an Ugly Word by Ed Winn III
Class Action Lawsuits and Legislative Attacks by John Raines
Passing the Test: Potential Employee Profile Testing by Darren A. Feider
Staying Power: An APROfile of Bob McGregor by Kristen Card

Theft is Such an Ugly Word
by Ed Winn III

Theft is such an ugly word probably because it stands for such an ugly act. One might suppose that everybody, except maybe the thieves themselves, would be of one mind about theft and thieving. But this is not the case, at least insofar as the RTO industry is concerned. Rental dealers disagree about theft. The police disagree. Prosecuting attorneys and district attorneys disagree. Judges and juries disagree. This article makes no effort to synthesize these disagreements. There is no reconciliation of these divergent views on the horizon. This piece chronicles recent developments that highlight these acute and often fervently held differences of opinion. heft is one of the family of crimes against property. In legal parlance, theft is the fraudulent taking of personal property belonging to another without consent and with the intent of depriving the owner of the value of the property. Theft includes larceny, swindling, embezzlement and also includes the circumstance of obtaining possession of property by lawful means and thereafter appropriating the property to the taker’s own use.  Larceny is often synonymous with theft, but is often subcategorized as single or compound, grand or petit, depending on the value of the property stolen and other variants.

• Larceny may involve an element of trickery or subterfuge.
• Robbery is the taking of personal property in the possession of another, from his person or immediate presence, and against the person’s will by means of force or fear. Robbery is larceny with the use of force, actual or constructive. 
• Embezzlement is the fraudulent taking of the property of another when that property has been entrusted to the taker by the owner. Embezzlement is a particular kind of theft.
• Burglary is the breaking and entering into the dwelling of another at night with the intent of committing a felony (a serious crime). Burglary carries the death penalty in some states.

Rental dealers view the theft of their rental property in decidedly different ways. Some dealers never have—and never would—file criminal charges against a rental customer for running off with a television. They view such losses as part of the cost of doing business and they do not want their employees spending their time playing cops and robbers when they could be renting more televisions (especially when playing cops and robbers is so much more fun than running a rental store, albeit far less profitable). These dealers are concerned about the image of the industry they are in and they understand that putting too many customers in jail can add to the negative impression of the business held by many. Other rental dealers have less sanguine attitudes toward rental thieves. They want their proverbial pound of flesh from customers who steal.

These dealers regularly file criminal charges against customers and are unrepentant about hounding such customers with any and all means at their disposal. One dealer stood up at an association meeting years ago to announce loudly and proudly that if a customer stole one of his televisions, the dealer wanted to see that customer “breaking rocks in the hot sun.” These dealers want justice against rental thieves and they want to make sure that everybody knows what happens to people who try to steal rental merchandise from their stores. It is not only the rental dealer community that is of two minds about criminalizing the failure to return rental property—so is the criminal justice system. There are district attorneys, prosecuting attorneys, magistrates, judges and police officers who will gladly participate in the pursuit of a rental thief and will work to throw customers in jail for stealing televisions. In other jurisdictions, those charged with administering the criminal law do not think that failing to return a TV obtained under an RTO plan is a crime at all. They view it more akin to not paying a bill. There is no debtor’s prison in the U.S. and it is not a crime to not pay bills in this country. There are civil remedies, to be sure, but being a debtor, under most circumstances, has not been criminalized.

Some prosecutors and some judges who would take a car rental theft case or a back-hoe digger or a party tent rental theft case and pursue it, will not take RTO cases because they understand the hybrid nature of the transaction and focus more on the ownership aspect of RTO than the rental aspect. This view is in keeping with how the industry markets itself to the public. From these diametrically opposed views of RTO and theft statutes, there is recent good news and bad news, depending upon your point of view on the issue. In October 2005 an Ohio court of appeals affirmed the conviction of an RTO customer for theft in a case, State v. Marshall, 2005 Ohio 5585 (Montgomery Cnty, Ct. of App. 2005). The customer had rented a dryer and a stereo, paid less than two months and then quit paying. The store had periodic contacts with the customer thereafter. The customer did not move, did not pawn the merchandise, did not do anything, in fact. He continued using the dryer and stereo at this house without paying. Finally, a year later, the rental company filed a civil suit and also filed criminal charges. Testimony at the criminal trial was that the rental company had lost $1500 in rental income and that the value of the purloined merchandise was $400 for the dryer and $1200 for the stereo. The customer did return the merchandise to the rental company a year later, but in a trial before the judge, the customer was found guilty of theft and sentenced to five years of community control sanctions.

On appeal, the defendant made several arguments, including “it is not a criminal matter,” ineffective counsel at trial and others, all of which were rejected by the court of appeals. In Ohio there is now a reported court of appeals decision affirming the applicability of the Ohio theft statute to RTO transactions. This decision should assist other Ohio rental dealers who want to pursue criminal sanctions against rental thieves in their state. A Florida court of appeals was less friendly toward an RTO company in a case decided in July 2005, State v. Sanders, 905 So.2d 241 (Fla. 2d Dist. Ct. of App. 2005). To begin with, Florida has had a troublesome history with its theft of leased property statute. In 1997, the legislature amended the theft statute specifically to exclude RTO transactions. The genesis of this amendment remains shrouded in mystery. Florida rental dealers worked with the legislature for several years before finally getting language back into the statute to cover RTO transactions. The new statute requires that rental companies put written notice of the criminal statute in rental agreements if they intend to pursue criminal remedies against customers who refuse to return rented property. Sanders rented a sofa, a chair and a spider lamp from the rental company under an RTO agreement with a total RTO price of $1,500. Sanders quit making payments at some point during the agreement and the rental company sent her a certified letter demanding return of the merchandise. The letter was returned undelivered because Sanders had moved away without leaving a forwarding address. The rental company swore out a criminal complaint against her.

The specific issue in the Sanders case involved a constitutional question of due process. The Florida theft of leased property statute has a presumption in it, like many theft statutes around the country. If a customer does not return property within five days of a written demand from the rental company, the law presumes that the customer intended to steal it. If this presumption is a mandatory one (i.e., if a jury must reach that conclusion regardless of any other evidence adduced at trial), the presumption violates due process, which requires that the prosecution in a criminal case prove every element of a crime beyond a reasonable doubt. The statute would be unconstitutional, because instead of having to prove intent—that the customer intended to steal the merchandise— the law attempts to allow a set of circumstantial facts—demand letter and no return of property—to assume criminal intent. If, on the other hand, the presumption is merely permissive— i.e., the jury can reach that conclusion from the facts, but is not required to do so and, depending upon the evidence, can reach a contrary conclusion if supported by the evidence—then the statute satisfies due process and can be enforced.

The Florida court of appeals in a pair of failure-to-return cases examined this issue in detail and held that the presumption in the Florida statute is permissive, and thus the statute is constitutional. In doing so, however, the court in the Sanders case had harsh words for the rental company and the legislature: “Why the legislature would want to do this, essentially encouraging the state’s attorney to become [the rental company’s] repossession and debt collection agent at state expense is a mystery to me, but that appears to be the intent behind the statute…Being poor and unable to pay your debts is still not a crime in Florida…Maybe Ms. Sanders’ husband or boyfriend ran off with the furniture and she cannot return it.Maybe her house burned down and the furniture was destroyed. Maybe the landlord evicted her and kept the furniture. Maybe the furniture was destroyed in a hurricane.” This case was sent back to the trial court for further proceedings and it is not yet known what will happen to Sanders. And so the debate about RTO and the criminal law continues throughout the land.

When dealers and the public officials involved with the criminal justice system are in agreement about how to interpret theft of rental property statutes, there is peace in those valleys. In those cities and towns where there is disagreement, and those places are legion, the process is frustrating for all involved. For frustrated readers, remember that the decision makers on this issue are all elected officials. If it is important enough to the business, the local or state political process offers a solution—work to have prosecuting attorneys, district attorneys and judges elected who agree with your view of the law.

Class Action Lawsuits and Legislative Attacks
by John Raines

Imagine: you arrive at your office expecting a normal business day. Perhaps you retrieved your mail from the post office and grabbed a cup of coffee and a breakfast sandwich at a drive-thru. You plop down in your chair to read your mail while sipping your coffee.You thumb through the newspaper for a few minutes before tackling your stores’ activity reports from the previous day. Soon your phone rings and your day officially begins. You address employee issues, customer issues and other matters as they come up. At some point Federal Express arrives with deliveries and an associate drops one of the envelopes on your desk.

At last you have a break between calls. While responding to several e-mails, you open the Fed Ex envelope and screech, bang, boom! Your normal day comes to a screeching halt. You are staring at one of the most horrible things that any business owner can receive—a class action lawsuit. You catch your breath, mutter a few choice words about trial lawyers and then call your attorney. He instructs you to fax over the lawsuit, which you do.While awaiting his return call, you read the lawsuit from cover to cover. You see claims for fraud, misrepresentation, usury, deceptive trade practices, unconscionable conduct, etc.

You mutter a few more words about trial lawyers. When your attorney returns the call, he recommends that you hire a law firm specializing in class action lawsuits. He suggests a firm he has contacted on your behalf. These attorneys charge $300 to $500 per hour and require a significant retainer. In a few hours you remember that you have insurance. Whew! Thank goodness! The insurance company will surely cover any legal bills.You call your agent and naturally he informs you of a potential coverage problem. He says that while you have paid your premium, he is not sure the policy covers this type of lawsuit. And as sure as grits are groceries, the insurance company denies the claim and refuses to pay your attorneys’ fees. Your entire day becomes consumed by the lawsuit. As you meditate, curse and stomp around the office, you think of something else—your bank. Specifically your inventory loans are up for renewal in six months.

You know you will have to disclose the class action suit to your banker.Will he renew the loan? To make matters worse, you recall that you signed a lease last week on a building for a new store. Should you open it? Can you get out of or delay the start of the lease while you sort out the lawsuit? Yes, this happened to me and it happened in a conservative, southern state not particularly known for judicial activism. Fortunately,my company had good lawyers and a fair judge who dismissed the lawsuit. However, similar suits continue against other dealers in our state. We are optimistic about the outcomes of those cases, but we are reluctant to open new stores until the litigation is resolved. Although our state law favors the rental-purchase industry, the plaintiffs’ attorneys are asking the courts to change the existing law. Federal legislation defining rental purchase transactions as leases would prevent the challenge. Now let’s talk about the second day. Imagine: a year has passed since the dreadful day you received the class action lawsuit. Although you occasionally check into the status of the cases against other dealers, you have pretty much returned to the normal routine of managing your business. One morning, while on the phone with one of your store managers, you receive an urgent e-mail.

Then screech, bang, boom! Your day comes to a halt again.A state legislator has filed a bill to regulate prices on rental-purchase agreements. You quickly read the proposed legislation and realize that it will shut down the rental-purchase industry in your state. Moreover, the bill is scheduled for a committee hearing and vote the next day.What do you do? Since you are a member of APRO and your state’s trade association, you call both.You, the APRO staff and other dealers formulate a quick response. Your state trade association hires a lobbyist and off you go to your state capitol to fight this terrible legislation. Yes, this happened to me, also. These legal and legislative challenges taught me two important lessons. First, rental dealers need APRO! Please support our industry’s trade association. If you are not a member, shame on you. Join today. If you are a member, thank you. Consider contributing to the Team APRO fund. Resources such as these fuel our efforts in Washington. Second lesson: rental dealers need APRO! The APRO staff monitors legislation in all 50 states. APRO’s professional staff provides immeasurable insight and assistance when legislative issues arise.

Who else is looking out for us? No one. So again, please support APRO. We also need your help this spring on Capitol Hill. Our annual legislative conference is scheduled for February 28 and March 1, 2006. Mark those dates on your calendar and plan on attending [see sidebar on facing page].We significantly increased our legislative contacts in 2005, but we can do better.We must continue to expand our influence in Congress. Money alone will not work. We need dealers meeting with their senators and representatives. Don’t worry if you have not previously attended. As dealers, all of us are in the “people” business. If you are capable of speaking with a customer, then you are capable of speaking with your elected officials.

Passing the Test: Potential Employee Profile Testing
by Darren A. Feider

For years, many employers have used professional management profile tests when hiring or promoting. Generally, employee testing is not unlawful. However, when a test can reveal mental disorders such as depression or paranoia, it may run afoul of federal and/or state disability law.

This summer, the Seventh Circuit Court of Appeals held Rent-A-Center liable for violations of the Americans with Disabilities Act because of the company’s practice of requiring management candidates to submit to personality tests. This article discusses the practical impact of Karraker v. Rent-A-Center Inc. on an employer’s decision whether or not to implement personality testing or other forms of employee testing before hiring or promotion. As many employers have done in the past, Rent-ACenter required potential managers to submit to an APT Management Trainee- Executive profile before it would consider the employee for promotion. Rent-A-Center used the executive profile to identify employees who had personality traits that the company found in successful managers. The profile consisted of nine tests that focused on math and vocabulary skills. The profile also included a personality test known as the Minnesota Multiphasic Personality Inventory (MMPI). The MMPI is often used by psychologists and psychiatrists to measure cognitive skills and personality traits and to assess symptoms of social and personal maladjustment.

The MMPI can be used to diagnose mental disorders and measure personality traits for depression, hypochondriasis, hysteria, paranoia and mania. The MMPI is often administered to candidates for high-risk or public safety positions, such as police officers, firefighters and individuals who work with children or the elderly. These positions often involve high levels of stress, so the MMPI is used to identify individuals that would arguably be unable to handle such work environments. According to Karraker v. Rent-A-Center, the MMPI used by Rent-A-Center consisted of 502 questions, many of which were true or false questions such as: “I commonly hear voices without knowing where they are coming from,” “I see things or animals or people around me that others do not see,” “[m]y soul sometimes leaves my body,” and “[a]t times I have fits of laughing or crying that I cannot control.” Rent-ACenter described the work environment for its managers as “fast-paced, high-stress environments,” so it used the MMPI to identify those who could perform well under such conditions. In essence, Rent-A-Center, like many employers, used the MMPI as a forecasting tool.

However, after the Karraker decision, employers should rethink use of such personality tests or be exposed to class action disability lawsuits by their employees. Employers often associate unlawful disability discrimination with physical handicaps— e.g., wheelchair access with ramps and toilets, elevators in small commercial buildings, telephones with Braille or TTY, etc. However, the Americans with Disabilities Act (ADA) also covers mental impairments and prohibits an employer from declining to hire or promote because a person has a mental disorder if that disorder does not prevent him or her from performing the essential functions of the job, with or without a reasonable accommodation. Many states have similar statutes or employment laws that mirror the ADA’s prohibitions on disability discrimination and expose employers to similar legal remedies. The ADA permits an employer to conduct a medical examination only after offering a position to an applicant whose offer is contingent upon the results of the medical examination. Rent-A-Center countered that what it had used was a “vocational scoring” protocol, which was focused on personality traits, not mental disorders, so it was not a “medical examination.”

The district court agreed, holding that the MMPI was not unlawful because Rent-A-Center had used the test to only assess personality traits and the test results were not interpreted by a psychologist. The district court dismissed the class action lawsuit. However, the Seventh Circuit held that Rent-A-Center’s use of the MMPI was an unlawful pre-employment medical examination that had the effect of screening out persons with mental disabilities regardless of whether or not they could perform the essential functions of the job with or without a reasonable accommodation. The court directed entry of judgment in favor of the Karraker brothers and the members of the class. In other words, Rent-A-Center lost the case without the benefit of a trial. The court relied, in large part, on the enforcement guidelines published by the U.S. Equal Employment Opportunity Commission (EEOC) that prohibit pre-employment medical examinations. The court explained that the Rent- A-Center’s test was “likely to have the effect of excluding employees with [mental] disorders from promotions” and because the test “is designed, at least in part, to reveal mental illness and has the effect of hurting the employment prospects of one with a mental disability, we think the MMPI is best categorized as a medical examination.”

On appeal, Rent-A-Center initially argued that the MMPI was not an unlawful because it was not a “medical examination,” as no psychologist, psychiatrist or doctor reviewed the test results. The EEOC’s guidelines identify many factors to determine whether a test is actually a “medical examination” or merely test: (1) whether a health care professional administered or interpreted the test; (2) whether the test was administered in medical setting using medical equipment; (3) whether the test was invasive; and (4) whether the test is designed to reveal an impairment of physical or mental health. The court rejected Rent-A-Center’s argument, finding that whether a psychologist or psychiatrist reviewed the test results in a medical setting was irrelevant because the MMPI was a test specifically designed to reveal mental health issues and the effect of Rent-A-Center using the test was to exclude employees who had mental disorders from consideration for promotion. In response, Rent-A-Center argued that the test results were only used to measure an applicant’s “state of mood,” not any particular mental disorder. Rent-A-Center explained that the test results helped identify those who could work in a high stress, fast-paced workplace environments.

The federal appellate court was not swayed and in fact made light of Rent-A-Center’s argument stating: RAC argues in its brief that the MMPI does not test whether an applicant is clinically depressed, only “the extent to which the test subject is experiencing the kinds of feelings of ‘depression’ that everyone feels from time to time (e.g., when their favorite team loses the World Series). Although that particular example seems odd to us (can an Illinois chain really fill its management positions if it won’t promote disgruntled Cubs fans?), the logic behind it does not seem to add up, either. (Karraker) The court further stated: “[w]e see two possibilities: Either the MMPI was a very poor predicator of an applicant’s potential as a manager…or it actually was designed to measure more than just an applicant’s mood on a given day.”

The court thus held that Rent-ACenter violated the ADA when it administered the MMPI to employees seeking promotion to store manager. Employers can learn several lessons from this case. First, an employer should not administer a personality test or require a medical exam until after it has made a conditional offer employment or promotion. Rent-A-Center had required employees to take the MMPI before they were considered for promotion. Second, any personality test or other test designed to identify mental disorders is unlawful notwithstanding an employer justification or excuse. If any of the questions on a test can be deemed to elicit information about an applicant’s mental illness, it is unlawful and the employer’s intent is irrelevant. Although Rent-A-Center had used a special vocational scoring method designed to avoid revealing mental disorders and had submitted expert testimony from a psychologist to support its assertion, the court was not convinced because the MMPI results could have been used to discover those conditions.

Thus, even if Rent-A-Center had not intended to screen out employees with mental disorders, its use of the MMPI was still likely to weed out those with disorders from promotions. That violated the ADA. Third, an employer cannot circumvent the ADA’s prohibition on pre-employment or pre-promotion medical examinations by not using a psychiatrist, psychologist or doctor. It seems that Rent-ACenter had hoped to avoid liability by not using a doctor. Many employers have received advice from counsel that a test is not an unlawful pre-employment medical examination if a physician is not involved in the process. That is not correct advice currently, whether or not it was before. Finally, and most important, an employer should thoroughly evaluate whether it needs to test its employees. A test must be job-related and measure the applicant’s ability to perform the job. Management should ask if there is a business necessity for the test. If a test is not reasonably related to the essential functions of the job, a court is more likely to hold that the test is unlawful. The court clearly did not believe Rent-ACenter’s explanation for administering the MMPI.

When pressed for its explanation, Rent-A-Center stated that it had administered the test to only determine whether its employees were in a “good mood.” The court noted, “why would RAC care if an applicant lost his keys the morning of the MMPI or took the test the day of another Cubs loss? Would RAC really want to exclude an employee from consideration for a promotion because he happened to feel sad on the wrong day?” The court did not believe Rent- A-Center partly because it could not articulate how the MMPI test was related to a managerial position. Thus, before using a personality test or any other test, an employer must have some specific need and that need must be related to the job at hand. Also, an employer should consider whether the test screens out a disproportionate number of applicants or employees in a protected class—e.g., women, minorities or disabled individuals. In such a case, the employer must be able to show, at a minimum, that the test is job-related and consistent with business necessity. Nonetheless, employers are not completely barred from using tests. If a job requires heavy lifting, an employer can test if the applicant can lift the appropriate weight. If the job requires an elevated intelligence, an employer can test for intelligence.

In fact, the court did not reject Rent-A-Center’s use of other parts of the executive test battery that were designed to measure honesty, preferences or habits. In the first paragraphs of the opinion, the court discusses how modern professional athletes are now being tested for their intelligence. Thus, an IQ test or similar tests that are not designed in part to discover mental disorders should be acceptable. An employer should, therefore, have a checklist of the essential functions of a position that it wants to test and then determine if the proposed test actually evaluates those functions. The bottom line is that an employer cannot use a test for a hiring or promotion decision if the test was designed at least in part to discover or reveal mental illness. Such a test lowers the applicant’s chance of hiring if he or she has a mental disability.

Staying Power: An APROfile of Bob McGregor
by Kristen Card

ON AUGUST 29, 2005,WHILE MOST OF AMERICA WATCHED the devastation of Hurricane Katrina happen on their television screens, Bob McGregor and his family witnessed it through the windows at his daughter’s home in Pascagoula, Mississippi.t“When the storm hit, everything was fine as far as the wind, for a while,”McGregor remembers.“Then, part of the roof blew off and the living room started leaking.

Then, we noticed the water was coming up to the downstairs floor level, and within a few minutes, it was in the house.We started scrambling and putting up valuables and the next thing you know,we were wading in knee-deep water. “So about that time, we all went upstairs.We had all the family’s cars parked out in their double driveway and from upstairs, we looked out through a big window and saw all those cars get submerged— all seven of them. A few hours later, the water started going down and it went down just as fast as it had come up—and [then] it was gone.” Saltwater covered essentially the entire town and while it didn’t stay for days or weeks like the flooding in New Orleans, it left an indelibly destructive mark. At my house,” recalls McGregor, “it was 49 inches deep inside the house and our house is about 27 inches off the ground. The saltwater rusts everything it touches and on the bottom of it was about an inch of old, black, dirty, contaminated mud, muck. Ugly stuff. So all the sheetrock and all the carpet has had to be torn out.We lost every stick of furniture we had, and all the family pictures—hundreds and hundreds of family pictures, way back from when we were children.

My son lost his house.He was right on the beach and it just wasn’t there at all anymore. Instead of his house, he had about five feet of sand.” Nine inches of the ruinous waters flooded the store and warehouse of McGregor’s business, McGregor Rents. “Almost all of our inventory got wet,” McGregor laments. “Everything that got wet, we treated with a mold killer solution, and it’s been pretty successful. And now, we’re selling everything that got wet at a 40- percent discount. About 75 percent of our bedding inventory—about 200 pieces of bedding—we’ve had to just throw it away. And we’ve counted just over 400 customers who we’ve just lost completely.

Anything over a foot [of water] inside their house and we’ve just had them put it out on the street for the trucks to pick up.We just lost all that; we’re guessing at about a halfmillion dollars there.” That’s a half-mill McGregor Rents will have to eat. Everything that got wet from the Katrina storm surge is classified as flood damage and McGregor—like most Pascagoulans not located right on the water—had no coverage for flooding. “Heck, nobody ever dreamed we’d need flood insurance at these locations,” he says. “It’s never flooded there before, not in history. People didn’t think they needed flood insurance and even the banks didn’t think they needed it. So people are really hurting down here because of that. We took a lick on it, no doubt about that. I’m right back where I started from in 1946, with just one store.” Yet for a man who’s suffered a monstrous professional hit, who’s seen his hometown practically decimated by a freakishly colossal natural disaster, whose beautiful harbor-side home has been stripped down to the studs while he and his wife live in a donated trailer in the back yard, 80-year-old Bob McGregor sounds, well, pretty perky. “The trailer’s got a nice canopy coming out from under it,” notes the native Mississippian. “It’s not home, but it sure beats living on the screened porch.”

A strong streak of that mix of perseverance and optimism must run genetically through the McGregor bloodline. Bob’s father, also Robert, grew up on a Mississippi hog farm and went to school through only third grade. Later, he inherited the farm, and he and his wife, Maggie, were in hog heaven—with 500 head— when the herd was abruptly extinguished by a case of cholera. They left the farm and moved to Hattiesburg, where Robert taxied mostly World War I soldiers between downtown and Camp Shelby.Maggie saved up some money—“Mama was a frugal woman,” observes McGregor—and they purchased a pool hall, which went broke once the war was over. So Robert went to work for the railroad for $65 a month and Maggie started saving once again. With that money, Robert began buying and selling used furniture. It was 1919, and the official beginning of the family furniture business. “He had a covered wagon and a mule for delivery,” McGregor says. “He went house to house and he’d buy and sell off that covered wagon. Most of the furniture sold for 50 cents down and 50 cents a week.

He was just a man who overcame his lack of education with hard work.” Then called Pioneer Furniture Company, the business gradually grew and all five of the McGregor children eventually went to work for the family company. Bob, the youngest, graduated from high school in 1942, and despite his intention to go to work with his dad, he half-jokingly claims, “When I walked off the platform with my diploma, they were waiting to hand me my draft notice.” McGregor joined the Navy and attended boot camp in San Diego, followed by radar school in Honolulu and another 16 months in Hawaii as an instructor. He tested his way into college at Tulane, where he wanted to take business management courses, but was forced by the Navy into an electrical engineering major.

When World War II ended, the Navy let Mc- Gregor go and he made plans to return to Tulane and study business management. But during the break before school started up again, the family business intervened. “My daddy was opening up his second store in Hattiesburg,” remembers McGregor. “I went down to help with the grand opening and I just kept going.” McGregor never returned to complete his college degree, but he did become the manager of that second Hattiesburg store and persuaded his dad to change the company name to McGregor’s. Bob had notions of launching a chain and, accordingly, McGregor’s opened its third retail furniture store in Pascagoula—where Bob subsequently moved with his wife and children—in 1959.

The trio of retail stores enjoyed significant success, with enough business to keep the McGregors busy. Then, in 1972, a man involved in the building industry walked into the Pascagoula store, not realizing he was about to single-handedly alter the way the 50-plus-year company conducted business, with one seemingly simple request. “He had just completed an apartment complex and he said, ‘Bob, I want to rent some furniture,’” recalls McGregor. “I said, ‘You can’t rent furniture; let me sell you some furniture.’ And he said, ‘I need 34 apartments of furniture for my new complex,’ and I said, ‘Well, I’ve never heard of renting furniture.’ And he said, ‘Well, they do it in New Orleans, so why can’t you do it?’ and I said, ‘I don’t know—let me think about it.’ “So I sat down with a pencil and paper and my little calculator and just figured out what I thought I ought to charge,” McGregor says. “I ordered the 34 apartments of furniture for the man and delivered it to him and that was the start of our business within the rental field.” Word spread along the Gulf Coast about McGregor’s rent-to-rent business—the rent-to-own concept had yet to debut in Mississippi—and eventually, the company had 29 apartment complexes on its rental rolls.

Client complexes also began referring individuals to the company and in the early 1980s, one of those individuals walked into the Pascagoula store, again with a request that sparked a further evolution for McGregor’s and its way of doing business. “She asked me whether there was any possibility of owning the furniture she’d been renting,” recounts McGregor. “And I said, ‘Well, I don’t know. Let me look at your account.’ So I pulled out her account and she’d been paying on the furniture for four years. I sat down and figured out how much she’d paid and I knew what my cost was on it. She’d paid us, I figured, way,way too much. I wrote that lady back a check for $900 that day, and gave her the furniture. “I started thinking, well, gosh, there ought to be a purchase option on this stuff,” McGregor says. “So we put one in and we started renting to more and more individuals.

Eventually, we got a little warehouse for the rental part of the business and had a very, very small showroom at the front of it. We hired someone to go out and call on apartment complexes and the business just sort of kept growing, until we finally separated the retail and rental accounting. The next year, we realized we had made more money with that little old rental operation than we had at the retail store. And I said, ‘Dang. There may be something to this rental thing.’” McGregor closed his Pascagoula retail store, his daughter Terri took over management of the Pascagoula rental store and—with the help of his nephew John McGregor— Bob opened up another rental store in Jackson. It was extremely successful, and suddenly, the McGregors’ furniture business, now more than 60 years old, began to boom. McGregor’s launched a string of grand openings—from Baton Rouge to Orlando—that boosted the company roster to 13 rental and two retail stores. “We thought we were going to be billionaires,” muses McGregor. He chuckles. “But it didn’t quite work out that way. In 1982, the oil crisis hit. The rent roll at our Baton Rouge store went from about $95,000-a-month income to about $40-somethingthousand within a year. Jackson wasn’t far behind, then Birmingham…You don’t necessarily think of those towns as oil towns, but we reached a point where seven of our 13 rental stores were losing money.”

Those losses worried the bank, where the McGregors had secured a sizable loan to support their gearedup growth. When the bank called the multi-milliondollar loan in, McGregor was forced to sell off nine stores to Aaron Rents to repay the bank note. Bob and his nephew John divided what was left of the company, with Bob holding onto only the Pascagoula and Biloxi stores. Later, the Biloxi store would move to Gulfport, only to be shut down last year following the destruction by Katrina’s older brother, Hurricane Ivan. Today, at 86 years and counting, McGregor Rents might look like it’s been overly downsized, but at its core, it’s still solid and focused on three types of business: rent-to-own, which makes up about 60 percent of accounts and income; cash, or 90-dayssame- as-cash; and rent-to-rent, the only one of its kind along the Mississippi Gulf Coast.McGregor thinks it’s these rent-to-rent roots that help distinguish the company from its competition. “Our rent-to-rent lifts our rental income; makes it steady,” McGregor says. “We’ve got our niche and we have our customers, but I think I’m smart enough to know everybody’s got their niche and their customers. I think the key is when you get a customer, try to hold onto [him]. You’re going to lose some—some of them die and some move away and, God forbid, another store might take some of them away from you, I guess.

But we try real hard to keep our customers happy and they tell me all the time they wouldn’t even think of renting anything anywhere else.Most of our customers are loyal to us and we try to be loyal to them.” Once a family business, McGregor’s today is really just a family namesake—Bob is the only family member still involved in the company and his octogenarian status means he works only partial days, leaving much of the administrative nuts and bolts of the business to be handled by a hired helper. But a glimmer of hope for a family legacy remains in McGregor’s personal namesake—his grandson Rob, who is currently a sophomore at Ole Miss studying exactly what his grandfather never got the chance to: business management. The older Bob and younger Rob have had many conversations about McGregor Rents and have even developed a prototype for building up a company chain again. “Secretly, I’m hoping he’ll come in and take on the business,” says McGregor, though he tries not to force the issue. Still, should young Bob accept the company torch from his grandfather, McGregor offers two simple words of wisdom to help him succeed at it. “Hard work. Just hard work,” he counsels. “People ask me, ‘Are you still working?’ and I say, ‘Yeah, but I work only half a day—12 hours.’” He laughs, then offers some more serious advice. “It helps to be smart. It’s kind of a complicated business—figuring all the mathematics of it with all the ramifications of the rentto- own business…trying to keep it fair and right and still make a profit and all. Being smart and working hard is how you do it and, of course, it pays to have enthusiasm.

As far as my success is concerned, it’s mostly just been hard work and perseverance.” And so Bob McGregor just keeps on keepin’ on. For about the past 15 years, he has begun every day at 4 a.m. with a cup of coffee, a pencil, a spiral notebook and two hours of silent solitude. During this magical quiet time, he does “morning pages,” a concept gleaned from creativity guru Julia Cameron’s book The Artist’s Way. In his morning pages, McGregor simply writes down whatever’s on his mind—and there’s plenty: he’s collected 60 spirals full of notes to date. He calls them his memory. “Everything I think of, I write down,” he says. “Then, when I want to remember something, I just try to remember which spiral notebook it’s in.” McGregor also finds deep satisfaction through his volunteer work with the St. Vincent de Paul Society, a Catholic-based organization created to help the poor and needy. He manages the furniture room at the group’s thrift store while Joy, his wife of 58 years,works as cashier. “I tell people all the time, ‘That good-looking blonde over there, that’s my wife,’” quips McGregor. “She’s gorgeous—she was Miss Hattiesburg High. We knew one another in high school, though we never dated then. When I came back from college, I called simher up one day and asked her for a date and after that, it was just, y’know, downhill—or uphill, I guess.”

The couple’s two children—a daughter who teaches second grade at a local Catholic school and a son who runs a car business—and two grandchildren all live close by in Pascagoula, so family time is frequent and fun-filled. McGregor and his son also own a trading company together, through which they trade stocks and commodities—more for play than for profit. “It’s really just a game,” McGregor clarifies. “I’ve always said business is just a game and money is just a way to keep score. I enjoy the hell out of it. “And I love furniture,” he continues. “I love this business so much. It’s all I’ve ever known. My daddy started me sweeping the floors in his warehouse when I was just 13 years old. So it’s been 67 years I’ve been messing with furniture. I love going to market; I’m probably the oldest buyer who goes to the furniture market anymore. Next February, we’re going up to Tupelo and it’ll be my 106th market.” As a tree surgeon performs damage control in the McGregor’s front yard and a Shop Vac hums in the background, it seems clear that no matter what sort of Hell or high water might come his way, throwing in the towel is simply not an option to Bob McGregor. He and his business are here to stay. “I’ve never once considered getting out of this business. Oh, no, no, no, no, no,” he asserts. “I love the business and I don’t have any doubt whatsoever that I’ll bring it back again.”