On November 17, 2014, a San Diego federal jury of five men and three women awarded Plaintiff Rosario Juarez $185 million dollars in punitive damages in her pregnancy discrimination lawsuit against her former employer AutoZone Stores, Inc.

Plaintiff began working for AutoZone as a Customer Service Representative in December 2000. Over the course of the next several years, she was promoted to Parts Sales Manager and then Store Manager. A little over a year after her promotion to Store Manager, Plaintiff told her District Manager that she was pregnant and a month later, AutoZone placed Plaintiff on a Performance Improvement Plan (“PIP”) and shortly thereafter demoted her to Parts Sales Manager. Plaintiff then filed a discrimination charge with the Department of Fair Housing and Employment (“DFEH”) and was issued a right-to-sue notice. Plaintiff filed the original lawsuit in January 2008 and was terminated on November 20, 2008. Plaintiff later amended her complaint to include additional claims. The jury ultimately found AutoZone liable on all five claims: pregnancy discrimination, harassment, retaliation, failure to prevent discrimination, harassment and retaliation and wrongful termination.

Apart from being one of the largest individual victories in employment law history, this case highlights the importance of employers ensuring that the adverse employment actions they take match the stated reasons for taking them. Two adverse actions likely played a significant role in the jury’s decision to award substantial punitive damages in this case: Plaintiff’s demotion and her subsequent termination.

AutoZone stated that it demoted Plaintiff after she failed to satisfactorily complete her PIP. However, Plaintiff presented evidence to the jury that after she informed her manager that she was pregnant, he urged her to step down as Store Manager due to her pregnancy on multiple occasions prior to her demotion. Plaintiff also presented evidence that after she told her manager that she was pregnant and prior to her PIP, she was given longer “to-do” lists with impracticably short deadlines when compared to her male counterparts with stores in worse conditions.

AutoZone also stated that it terminated Plaintiff for a “policy violation” when she failed to follow cash handling procedures during a cash sweep of the registers in the store, resulting in a missing envelope containing $400. However, AutoZone was unable to identify the particular written policy that Plaintiff allegedly violated. Also, AutoZone failed to adhere to its commitment to enforcing the alleged policy when it chose not to discipline another employee who admitted she did not follow AutoZone’s cash handling procedure during that same incident.

In the end, the jury did not believe AutoZone and awarded Plaintiff $872,000 in compensatory damages and $185 million in punitive damages—$25 million more than she requested. As pregnancy (and other) discrimination lawsuits are on the rise, employers should be mindful that courts and juries are closely scrutinizing the legitimate business reasons offered in defending against allegations of discrimination, harassment and retaliation. Employers should ensure that they have ample evidence supporting their stated reasons for adverse actions.