Let’s just take a moment for that to sink in.  As we reported on Monday, $185 Million in punitive damages were awarded Monday against AutoZone.  This was after the jury awarded $872,000 in compensatory damages on Friday.

You are probably asking yourselves how in the world this happened.  I have to say, based on some of  the press coverage of this case, I was not at first sure.

The basic facts of Rosario Juarez’s claim are these:

Juarez joined the company in 2000 and was promoted to parts sales manager in 2001. She claims that of 98 stores in the San Diego area, only 10 had female managers. Juarez alleged that AutoZone had a glass ceiling where women were not promoted to store manager positions.

The complaint says Juarez was finally promoted to the position of store manager in October 2004 — but only after she complained about the discrimination. She then claims that after she informed the company of her pregnancy in November 2005, her district manager tried to encourage her to step down, saying she would not be able to handle the responsibilities of running the store and being a mother at the same time. Juarez refused to resign and after her son was born in May 2005, she claims she still suffered discrimination. She again complained of discrimination and was then demoted in February 2006, the suit says. She eventually filed a complaint over the demotion with the California Department of Fair Employment and Housing in 2007.

Juarez was not immediately terminated after filing the administrative complaint.  Instead, many months (perhaps even a year or more) later, Juarez was fired after a customer service representative allegedly misplaced an envelope with cash from the register, and Juarez was blamed and subsequently terminated in November 2008.  Juarez claims that this was a scheme designed simply to retaliate against her.

All in all, a rather run of the mill pregnancy discrimination claim.  Indeed, a claim that could possibly have been dismissed in some courts as the alleged retaliation took place so long after her complaints.

You can see where this claim went wrong when you dig a little deeper into the facts that came out at trial.  According to ABC News 10, the plaintiff presented the testimony of a former district manager, who was also an ordained minister, who claimed that there was a meeting with high-level executives where they were celebrating the expiration of a previous settlement agreement requiring AutoZone to promote women and to track the promotions.  This former district manager said that he was offered a promotion if he fired all the women at his stores.

Damning evidence to be sure.  It also did not help that the person who investigated the loss of cash that led to Juarez’s firing testified that she never believed that Juarez had taken the cash and felt instead that the company was targeting Juarez.  It probably also did not help that this was not the first time that punitive damages were awarded against AutoZone on similar claims.

33089944_sAutoZone has already announced plans to appeal and it is likely that the punitive damages award, which is 200 times the compensatory damages, will get drastically reduced at some phase in the litigation.  However, this case serves as an example to employers whose top level executives do not fully commit to equal employment opportunity principles.  Even if the actual decision makers in this case legitimately believed that Juarez had taken the cash, the testimony that high level executives held such disdain for women likely torpedoed this case.

Quite simply, when training employees on discrimination policies, companies cannot afford to skip high level executives or to tolerate less than full compliance with the anti-discrimination policies or else they risk arguments by employees that there was a “culture” of discrimination at the company as evidenced by the high-level executives’ behavior.