Company Drops Challenge to $185 Million Verdict in Pregnancy Discrimination Lawsuit

T. Rolf [FreeImages.com Content License (http://www.freeimages.com/license)], via Freeimages.comThe defendant in a pregnancy discrimination lawsuit has dropped its challenge to the $185 million jury verdict obtained by the plaintiff late last year. The plaintiff had alleged that her employer demoted her after she gave birth, kept her in a position below her level of qualifications and seniority, and eventually terminated her. Juarez v. AutoZone Stores, Inc., No. 3:08-cv-00417, 2nd am. complaint (S.D. Cal., Sep. 7, 2010). A jury awarded the plaintiff more than $870,000 in compensatory damages and $185 million in punitive damages in November 2014, one of the largest damages awards in a pregnancy discrimination case in history. The defendant filed motions for a new trial and for judgment as a matter of law (JMOL), raising multiple objections. In July 2015, however, it dropped these objections. Both parties moved to dismiss all remaining claims, which the court did on July 24.

The plaintiff worked for the defendant, an auto-parts retailer, from December 2000 until November 2008. It had promoted her to a management position within a few months of hiring her, but she felt that her career advancement was “frustrated by a ‘glass ceiling.’” Juarez, am. complaint at 3. The plaintiff claimed that she became the object of significant discriminatory treatment when she became pregnant in late 2005.

The company demoted the plaintiff and decreased her pay several months after learning of her pregnancy. Although she says the company told her she could be considered for promotion to her previous position after one year, the company refused to promote her after the one-year period was up. She was terminated in November 2008 on what she alleged were pretextual reasons.

The lawsuit asserted causes of action for pregnancy discrimination, sex discrimination, pregnancy and sex harassment, and retaliation under California law. It also claimed violations of the federal Fair Labor Standards Act, state wage and hour law violations, and common-law claims for wrongful termination and unjust enrichment. In November 2014, a unanimous jury awarded compensatory damages of $872,270 to the plaintiff for back pay, front pay, and emotional distress. It also found the defendant liable for $185 million in punitive damages.

The defendant filed motions for JMOL and a new trial in December 2014. In its motion for JMOL, it claimed that the evidence presented at trial did not support the jury’s punitive damages award, citing California law. The motion for new trial alleged that the plaintiff and her counsel engaged in misconduct during the trial by seeking to elicit testimony on matters previously ruled inadmissible by the court. It also claimed that the court erred by excluding evidence intended to counter the plaintiff’s testimony on emotional distress. It challenged each element of the compensatory damages award, and it again challenged punitive damages.

A U.S. Supreme Court decision, State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003), states that punitive damages generally should not exceed 10 times the amount of compensatory damages. The ratio of punitive to compensatory damages in this case was roughly 212 to 1. After a hearing in March 2015, the judge urged the parties to reach a settlement. They apparently did so, based on the joint motion to dismiss the case with prejudice, which most likely involves a lower damages amount. The verdict, however, remains part of legal history.

The pregnancy discrimination attorneys at Phillips & Associates advocate for the rights of New York City employees and job seekers. Contact us today, online or at (212) 248-7431, to schedule a free and confidential consultation with an experienced and skilled employee rights advocate.

More Blog Posts:

Jury Awards Over $185 Million in Damages in Pregnancy Discrimination Lawsuit, New York Employment Attorney Blog, November 26, 2014

Store Manager Fires Woman on Her Second Day Due to Pregnancy, Resulting in EEOC Lawsuit and $15,000 Settlement, New York Employment Attorney Blog, September 17, 2014

EEOC Settles Pregnancy Discrimination Lawsuit Against Pet Food Company for $30,000, New York Employment Attorney Blog, August 28, 2014

Photo credit: T. Rolf [FreeImages.com Content License], via Freeimages.com.

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