ALERT: Danger Zone - Employer Hit with Huge Pregnancy Discrimination Act Verdict
In a stunning employment verdict, a California jury awarded $185 million in punitive damages and $873,000 in compensatory damages to a former AutoZone store manager who claimed the auto-parts retailer mistreated her based on her gender, demoted her after learning she was pregnant, and ultimately terminated her from employment based on her decision to challenge her demotion.
Rosario Juarez, the plaintiff, said she was demoted from the position of store manager at an AutoZone store after she became pregnant. Specifically, Juarez said that AutoZone treated her differently after she told a district manager in 2005 she had become pregnant.
"Congratulations...I guess," Juarez claimed the manager said. He then added, "I feel sorry for you." Juarez said AutoZone started complaining about her performance shortly afterward, before demoting her in February 2006. Juarez filed a complaint to challenge her demotion on the belief it was related to her pregnancy, and claimed she was fired because of her complaint. In its defense, AutoZone argued that Juarez was fired for misplacing $400 in cash, and receiving a poor performance review. However, the store loss prevention officer, who led the investigation into Juarez's alleged misconduct, testified during trial she never suspected Juarez of wrongdoing and thought the company was targeting her. Even though the $185 million verdict that AutoZone plans to appeal may not survive, it underscores the import of training managers and human resources personnel about appropriate treatment of pregnant personnel.
Indeed, pregnancy discrimination is a special focus of the U.S. Equal Employment Opportunity Commission's (EEOC) Strategic Enforcement Plan. In July, the EEOC issued an Enforcement Guidance on Pregnancy Discrimination and Related Issues, with a question and answer document about the guidance and a Fact Sheet for Small Businesses. Besides addressing the Pregnancy Discrimination Act (PDA), the guidance also discusses the application of the Americans with Disabilities Act (ADA), to individuals who have pregnancy-related disabilities. The guidance reiterates the fundamental PDA requirements that an employer may not discriminate against an employee on the basis of pregnancy, childbirth or related medical conditions, and that women affected by pregnancy, childbirth or related medical conditions must be treated the same as other persons similar in their ability or inability to work. The guidance also explains how the ADA's definition of "disability" might apply to workers with impairments related to pregnancy.
Soon, even the Supreme Court of the United States will weigh in on this topic. The Court is scheduled to hear oral arguments on the case of Young v. UPS on December 3, 2014. The UPS case involves whether pregnant employees are entitled to reasonable accommodations for work restrictions under the PDA, similar to those that employers must provide to disabled employees under the ADA. By comparison to the ADA, the PDA does not directly address accommodations to pregnant workers, but the question might be resolved by the Supreme Court in UPS.
Meanwhile, Congress has introduced the Pregnant Workers Fairness Act, which would amend the existing law and require all employers to grant reasonable accommodation for work limitations due to pregnancy, childbirth or related medical conditions. If the Supreme Court fails to offer clarity, the Act, should it pass, might do so.
Please feel free to contact any one of the attorneys in Spilman Thomas & Battle's Labor and Employment Group regarding the Pregnancy Discrimination Act, the Americans with Disabilities Act, or any labor and employment issues.