California Verdicts

Plaintiff(s):

Rosario Juarez (Female)

Plaintiff Attorney(s):

Charles E. Moore;
Charles Moore, Attorney at Law;
San Diego,
CA,
for
Rosario Juarez ■ Lawrance A. Bohm;
Bohm Law Group;
Sacramento,
CA,
for
Rosario Juarez

Plaintiff Expert(s):

Vickie Wolf;
C.P.A., A.B.V., C.F.E.;
Economics;
San Diego,
CA called by
Charles E. Moore, Lawrance A. Bohm

Defendant(s):

AutoZone Stores Inc.

Defense Attorney(s):

Gregg C. Sindici;
Littler Mendelson PC;
San Diego,
CA,
for
AutoZone Stores Inc. ■ Nancy E. Pritikin;
Littler Mendelson PC;
San Francisco,
CA,
for
AutoZone Stores Inc. ■ Liliya Stanik;
Littler Mendelson PC;
San Diego,
CA,
for
AutoZone Stores Inc.

Defendant Expert(s):

Robert Wallace;
Economics;
San Diego,
CA called by
Gregg C. Sindici, Nancy E. Pritikin, Liliya Stanik

In 2004, plaintiff Rosario Juarez, an automotive parts sales manager for AutoZone, complained to upper management about being passed over for promotion to store manager. Juarez specifically asked if she would be required to file a lawsuit in order to get promoted. Shortly after complaining, Juarez was informed that she would be put in a store manager training program for several months. She then continued to serve as an assistant manager for other stores in the San Diego market until she was given her first opportunity to serve as a store manager under a female district manager in October 2004. After several months, Juarez was assigned a different district manager, a male. However, Juarez claimed her new manager was demeaning and condescending to her and the other women in the store. In August 2005, Juarez became pregnant. She claimed she initially kept her condition secret from the district manager because she was afraid he would become more critical and upset. In late October 2005, Juarez received a favorable performance evaluation wherein she "met expectations" overall. Juarez ultimately told the district manager she was pregnant in early November 2005, but Juarez claimed the district manager became visibly upset upon hearing the news and, thereafter, became more aggressive, mean and critical of her. In February 2006, Juarez was demoted back to assistant manager and transferred to a different store. She was replaced by a male store manager. Juarez worked until she was nine months pregnant and then went out on maternity leave one week before the birth of her second child. While on leave in April 2006, Juarez filed a charge of gender and pregnancy discrimination with the California Department of Fair Employment and Housing concerning her demotion from store manager. A July 2006 letter to the California Department of Fair Employment and Housing, from AutoZone’s legal department, known as "AutoZoner Relations," claimed that AutoZone "thoroughly investigated" the discrimination claims filed by Juarez and found no problem. Following her maternity leave, Juarez returned to her demoted position in 2007. She ultimately filed a lawsuit in San Diego state court, in January 2008, alleging that her demotion was an act of discrimination based on her gender and pregnancy. She was deposed by AutoZone in October 2008, and she was fired on Nov. 20, 2008. AutoZone claimed the termination was due to Juarez being not trustworthy. Juarez sued AutoZone Stores Inc., alleging that the defendant’s actions constituted gender and pregnancy discrimination; gender and pregnancy harassment; retaliation; and failure to prevent harassment, discrimination and retaliation. Juarez alleged that AutoZone’s actions were all in violation of the California Fair Employment and Housing Act. Juarez claimed that she was hired as a cashier at AutoZone in December 1999 and then promoted to sales manager in 2001, but that when she remained in that position for three years, she felt she had hit a glass ceiling. She alleged that although she qualified for open store manager positions in her district, she was frequently passed over for promotion in favor of less experienced and qualified male employees. Juarez claimed that in 2004, after she complained to upper management about being unfairly passed over for promotion to store manager, she was informed that she would be put in a store manager training program for several months while working as an assistant manager for other stores in the San Diego market. However, Juarez alleged that AutoZone’s male employees did not have to go through the training program, which was only required for store manager candidates who came from other companies. She also alleged that she received no actual training in the program. Juarez claimed that when she eventually was given her first opportunity to serve as a store manager, she excelled in the position and had a positive impact on her store’s sales and appearance, but that after several months, she was assigned a different district manager, a male, who was demeaning and condescending to her and the other women in her store. Specifically, she claimed that male employees would receive pats on the back and jolly greetings, while the district manager treated her and her female assistant manager coldly, with little positive encouragement or interaction. Juarez further claimed that although her store was steadily improving in response to her efforts, the male district manager would continuously comment that she could not handle the job. In addition, she claimed that although she received a favorable performance evaluation, it included multiple unfair comments. Juarez contended that as a result of her treatment, she initially kept her pregnancy secret for fear that the district manager would become more critical and upset. She alleged that once she disclosed her condition to the district manager, he became visibly upset. Two assistant managers who witnessed the meeting testified that upon hearing the news, the district manager sarcastically responded, "Congratulations….I guess," and later stated, "I feel sorry for you." Juarez further alleged that immediately after disclosing her pregnancy, the district manager became more aggressive, mean and critical of her and that suddenly nothing was being done correctly. Specifically, she claimed that time-consuming work assignments had to be re-done, even though there was no need. She also claimed that before the pregnancy, the district manager gave the store short "fix-it-lists" of approximately 15 items that needed to be addressed, but that afterward, the lists became several pages long and sometimes contained as many as 70 "nitpicking" items. Juarez alleged that critical yelling and public humiliation followed, including the district manager repeatedly remarking in front of workers and customers that he did not believe she could perform the work in her "condition" and told her to "step down." Juarez claimed that even though she and her managers worked tirelessly, and often off the clock, to address the unwarranted "fix-it-lists," she was placed on a performance improvement plan. In addition, she claimed that while she was on the performance improvement plan, she and her sales team met, or beat, sales targets set by the company, but that that AutoZone, nevertheless, falsely claimed she failed to improve and meet expectations. Juarez alleged that as a result, she was demoted back to assistant manager and placed in a different store in February 2006, causing her to lose her bonuses and overtime pay. She also alleged that she was replaced by a male store manager who was not given "fix-it-lists." She claimed that once she returned from maternity leave, and after she filed a lawsuit in state court challenging her demotion as discrimination, she was fired, but that the reason for her termination was never clear. Plaintiff’s counsel argued that the practice of promoting male employees to better positions faster than female employees permeated AutoZone in the past and that during the five years since Juarez joined AutoZone, Juarez noticed that male employees were treated more favorably than female employees. In particular, Juarez claimed that less experienced male employees were promoted to vacant store manager positions and other promotions far more often than women, regardless of experience and knowledge. Juarez also claimed that, most often, women were relegated to service as delivery drivers and that, when possible, younger, attractive women were sought for those positions in order to encourage predominantly male-operated repair shops to place orders. Thus, plaintiff’s counsel argued that women at AutoZone were rarely promoted beyond assistant store manager or parts sales manager positions. Plaintiff’s counsel contended that, unknown to Juarez, AutoZone’s California operations were previously subject to a legal requirement that provided women with greater opportunities for employment and advancement within the company. Under the legal requirement, senior managers were also required to keep statistical records concerning the hiring and promotion of women. Plaintiff’s counsel noted that the requirement was a result of a gender discrimination claim brought against Chief Auto Parts, which was acquired by AutoZone after the legal requirement was imposed. As a result, AutoZone was obligated to comply with the requirement until it expired sometime in 2004. Plaintiff’s counsel contended that after the legal requirement expired, a meeting was held to announce that statistics pertaining to women in the workplace no longer needed to be collected. A district manager who was present at the meeting testified about how AutoZone leaders celebrated in reaction to the announcement. According to the witness, the Vice President of the Western Division said, "We can finally start getting rid of these women." The witness also claimed that another corporate leader, a regional manager who was later placed in charge of Juarez in San Diego, remarked that women weren’t worth anything to AutoZone and told a district manager that he needed to fire the women in his district stores if he hoped to be promoted to a regional manager. Plaintiff’s counsel argued that shortly after the legal requirement expired, Juarez complained to upper management that she had been unfairly passed over for promotion to store manager, which began a series of events that resulted in discriminating and harassing treatment against Juarez. Counsel argued that when Juarez filed a gender and pregnancy discrimination charge with the California Department of Fair Employment and Housing in April 2006 regarding her demotion, AutoZone’s legal department ("AutoZoner Relations") responded in a July 2006 letter by claiming that it had "thoroughly investigated" Juarez’s claims and found no problem. However, counsel presented evidence at trial that demonstrated that AutoZoner Relations never spoke to any of the obvious witnesses to the conduct, including Juarez and the people who worked with Juarez in her store. Plaintiff’s counsel further argued that during discovery, AutoZone witnesses initially indicated that the reasons for Juarez’s termination were unknown, but that at trial, the witnesses "remembered" that the termination was most likely related to an incident involving an employee losing $400 cash while Juarez was in charge of the store. However, AutoZone’s loss prevention manager testified that the investigation into the missing $400 was requested by high-level upper management and that it was prioritized over other incidents involving larger amounts of missing cash. She claimed that she was specifically instructed to target Juarez, rather than the subordinate employee whom she actually suspected to have lost the cash, and that she ultimately confirmed that Juarez acted appropriately during the investigation and answered all questions concerning the incident. The loss prevention manager further testified that she provided a detailed report to AutoZoner Relations immediately following the investigation, which plaintiff’s counsel noted was never produced by AutoZone and was not presented at trial. In addition, the loss prevention manager claimed that she suspected retaliation had occurred when she heard that Juarez was suspended for the $400 incident on the day of the investigation. Thus, plaintiff’s counsel argued that the illegal demotion and termination of Juarez were orchestrated and/or ratified by AutoZone’s legal department. AutoZone claimed that Juarez was a manipulative liar who used threats to receive promotions. It claimed that Juarez was appropriately demoted after being placed on a performance improvement plan, and failing to improve and meet expectations. AutoZone witnesses also testified that Juarez was terminated for "managerial disloyalty," for allowing $400 cash to go missing while she was in charge of the store and for refusing to fully cooperate with the loss prevention’s investigation into the missing money. Defense counsel strenuously argued that there was no evidence to support Juarez’s claims and that the alleged statements made by AutoZone’s upper management in regard to the expiration of the legal requirement were unrelated to Juarez’s alleged treatment and ultimate termination. The regional manager who allegedly made remarks in regard to the expiration of the legal requirement testified that he did not discriminate against Juarez or any women at AutoZone. The district manager at the legal requirement meeting who was allegedly told what he needed to do to be promoted also testified, but he admitted that he was not based at the San Diego AutoZone. In addition, defense counsel contended that the loss prevention manager who investigated the missing $400 did not testify about any alleged retaliation against Juarez during depositions and that she was later terminated for allegedly falsifying a store audit. Thus, defense counsel argued that the loss prevention manager only testified about the alleged additional information after she was fired. Counsel contended that AutoZone also had additional witnesses and documents to support its position, but they were not presented at trial. In response, the loss prevention manager claimed that she did not provide the additional information at her deposition because she feared retaliation from AutoZone and because AutoZone’s lawyers pressured her to say only what she knew for absolute certain. Several former AutoZone employees also testified about a pervasive fear of retaliation from AutoZone, and one of Juarez’s assistant managers testified about how he was fired a few months after Juarez was demoted in retaliation for supporting Juarez as a store manager. In addition, plaintiff’s counsel noted that AutoZone ultimately fired the loss prevention manager while she was pregnant and that defense counsel did not call a single female AutoZone employee to say she was fairly treated by the company.

Juarez testified to the shame and embarrassment she felt after her demotion. At the time of her termination, she was a single mother caring for her two young children. Juarez testified about how, during a lengthy period of unemployment, she and her children would make burritos and sell them just to make money to survive. Although Juarez eventually found new employment with a different auto parts company, she claimed the difference between the earnings and benefits resulted in significant financial losses. She alleged that the ability to earn bonuses and overtime pay as a store manager at AutoZone, as compared to jobs without such benefits, supported her claim of future wage loss even though she was gainfully employed at the time of trial. Juarez also sought recovery of punitive damages. The plaintiff’s expert economist testified as to AutoZone’s ability to pay punitive damages. Using AutoZone’s public financial disclosures, the economist assessed that AutoZone’s cash flow, after all operational expenses, was $20,798,192 a week. Although on paper the company had a negative net worth of $1 billion, the plaintiff’s expert economist explained that the company’s net worth was not a reliable indicator of the company’s ability to pay because the excess cash was used to repurchase its stock, which had the effect of making outstanding shares more valuable. Thus, the economist opined that AutoZone had the ability to pay a $100 million in punitive damages after only four weeks of operation. Plaintiff’s counsel argued that the reprehensibility of AutoZone’s conduct was extremely high because the unlawful acts were committed by the company’s legal department, which was responsible for guiding operations around the world. Thus, counsel suggested that more than $100 million would be required to ensure that the Board of Directors took a hard look at their legal department and "clean house." Specifically, counsel suggested that the award should equate to one week of the company’s extra cash for each year of injustice suffered by Juarez. Plaintiff’s counsel expressed a hope that the verdict would come to be known as the "Juarez Award," which would stand for the proposition that women are an equal part of the workplace, that they have a right to work while pregnant, and that retaliation will not be tolerated. The defense’s expert economist, who was unaware of the company’s cash flow, testified about AutoZone’s negative net worth, but offered no comment regarding what amount of punitive damages the company could pay. In opposition to any award of punitive damages, the director of AutoZoner Relations, an attorney, confirmed that the company’s current public filing with the SEC reported that all pending litigation against AutoZone "individually or in the aggregate" was "not material to the company’s financial condition." This became a stipulated fact during the punitive damages phase of trial. Defense counsel argued that AutoZone had heard the message expressed Juarez and that no further punitive damages were required. Thus, counsel moved to preclude punitive damages, but the court held that, for the purpose of punitive damages, AutoZone’s legal department was the managing agent that either perpetrated the illegal conduct or ratified the conduct.

On Nov. 14, 2014, the jury returned a plaintiff’s verdict for Juarez on all her claims. It determined that Juarez’s economic and non-economic damages totaled $872,719.52. The jury also found that AutoZone was guilty of malice, oppression or fraud. Three days later, the jury determined that Juarez’s punitive damages totaled $185 million, making her total recovery $185,872,719.52.

Rosario Juarez; $185,000,000 Personal Injury: Punitive Exemplary Damages; $393,760 Personal Injury: Past Lost Earnings Capability; $228,960 Personal Injury: Future Lost Earnings Capability; $250,000 Personal Injury: non-economic damages for emotional distress

Judge:

William V. Gallo

Post Trial:

The plaintiff is entitled to a recovery of statutory attorney fees. According to plaintiff’s counsel, these fees are expected to be in excess of $1 million.

This report is based on information that was provided by plaintiff’s counsel. Defense counsel did not respond to the reporter’s phone calls.