Jury Awards Record $185 Million in Punitive Damages for Pregnancy-Related Harassment, Discrimination, and Retaliation

DiscriminationRosario Juarez was hired as a sales employee by an AutoZone store in San Diego in 2000 and promoted to parts sales manager. At the time, AutoZone employed only 10 women as store managers among the 98 stores it operated in the San Diego area. After complaining to the company’s human resources department about AutoZone’s “glass ceiling,” Juarez was promoted to store manager in 2004.

Juarez became pregnant in 2005. A month after learning of her pregnancy, her supervisor, Kent McFall, told her she should step down as store manager. Juarez responded that she could still perform her job, but McFall continued to disagree. Juarez was ordered to redo her work, endured public humiliation, and was placed on a performance improvement plan.

After her baby was born, Juarez’s supervisor continued to suggest that she step down. Juarez complained to human resources about this behavior, but AutoZone failed to investigate her complaint and eventually demoted her to parts sales manager.

Juarez then filed a charge of discrimination with the California Department of Fair Employment and Housing. She was later terminated from AutoZone, allegedly because a store envelope with $400 in it went missing. In her charge of discrimination Juarez claimed discriminatory demotion, discriminatory and retaliatory termination, hostile environment, and failure to prevent claims of discrimination. She later claimed that the “missing envelope” was a fabrication.

Juarez proceeded to trial and won. In addition to damages amounting to approximately $1 million, the jury determined that the discrimination, harassment, and retaliation were committed with malice, oppression, or fraud and, on that basis, awarded $185,000,000 in punitive damages.

The record-breaking punitive damages award is relevant to California employers. In California, a court can award punitive damages to punish a defendant and make an example of them. To receive punitive damages, a plaintiff must show that a defendant acted with fraud, oppression, or malice.  Moreover, an employer may be liable for punitive damages based upon the actions of an “officer, director, or managing agent.” In this case, the jury found that AutoZone’s legal department was a managing agent for purposes of assessing punitive damages, as it authorized the demotion and firing of Juarez.