Last month Walmart was hit, in headline making fashion, with a massive $31.2 million verdict in a New Hampshire disability and gender discrimination case.  What makes this verdict particularly news-worthy is not only its size, but also the fact that the plaintiff was a pharmacist at Walmart, and not an executive earning a six-figure salary.

The verdict consisted of twin amounts of $15 million in punitive damages on the federal claim and another $15 million on the state claim. Whether Walmart will have to pay that entire verdict is still an open question, as appeals will certainly follow.

What is more important for employers to note is the message that this jury was clearly trying to send Walmart, and by extension to all employers.

The facts in this case were complex and both sides took strong positions. The plaintiff, Maureen McPadden, had worked at Walmart for 13 years as a pharmacist when she was fired, allegedly for losing her pharmacy key.  McPadden, however, alleged that the termination was based on her gender, retaliation for her disability and FMLA leave, and for her reporting of safety violations.

The company asserted that McPadden, prior to being fired, had been disciplined and had received poor performance ratings for being late to work and poor attendance.  However, her problems escalated in 2011 when a new Manager was promoted to take over the Pharmacy.  McPadden, soon after, complained about the new manager, that he was not competent, and that the Pharmacy did not have enough staff to adequately serve patients.  In 2012, she lodged a complaint with the State Pharmacy Board about inadequate staffing, which she claimed was causing pharmacy errors and potentially placing patients in danger.

McPadden claimed that this caused her extreme stress, and her doctor eventually recommended she take a two-week FMLA leave for stress, anxiety and depression.

While she was out, her doctor called a prescription into the pharmacy, and a co-worker – hearing this – spread a rumor that she “had a nervous breakdown”.  When she returned, she made a complaint against that employee and claimed that she was being retaliated against for taking leave.

The ‘straw that broke the camel’s back’ was an incident where McPadden lost the pharmacy key while she was in the process of moving to a new apartment.  She claimed this was an accident.  However, management did not see it that way, as the loss of a pharmacy key by a licensed pharmacist is a very serious incident, and McPadden was fired. Her discrimination case, in part, was based on the fact that the company did not fire a male employee who also lost his pharmacy key.

Notably, an email chain where several executives recommended lesser discipline, while her manager (the same manager she had complained about) recommended termination became a central focus of the case.

No one can know what was in the minds of the jurors, but these issues stand out:

  • Lack of privacy training and controls – According to the court’s decision on summary judgment, McPadden claimed that while she was out on leave another employee got access to McPadden’s private medical records and shared her most confidential information with other employees. That employee was ‘punished’ by a transfer to another department.  Could the jury have questioned whether that punishment was harsh enough?  Should that person have been fired? How did the company allow such a breach of privacy to happen?

Clearly there was some lack of training, in that this employee had not been told (or maybe did not understand) that certain types of records and information must be kept confidential.

  • Punishing the ‘avenger’ – After 13 years of employment, all of her health problems and her leave, the punishment of termination for McPadden for losing the Pharmacy key clearly seemed too harsh to the jury. Notably, on summary judgment the court noted that management and HR had debated via email what the penalty should be before the company ultimately opted for termination.  It is likely that the jury thought that was “unfair”, and that she was actually being punished for being a “troublemaker.”

Again, we cannot get in the minds of the jurors but plaintiff’s theory on summary judgment centered on the email chain, where some executives recommended lesser discipline and her manager recommended termination.  Plaintiff’s claim was that the manager manipulated the situation, and set her up to be fired.  The Court credited that theory on summary judgment.  If management could not agree on the appropriate punishment for McPadden, then how could one expect a jury to agree on that.

What is the message of the McPadden case for all employers?

  • Respect employee privacy. While it is true not all employees in an organization will have access to private information about co-workers, for those who do, employers need to be vigilant in making sure that those employees understand that this information cannot be publicized in any way.  Also, make sure that you train those employees who have access to private information about the importance of keeping such information private.  If any employee who have access to private information about colleagues and violate that privacy, don’t allow that to stand.
  • Be careful and consistent when issuing discipline. When an employee has been on leave, AND has filed a complaint against the company, they need to be ‘red- circled’ and any discipline subjected to the highest scrutiny. Here plaintiff alleged that others who had lost keys had not been fired.  That clearly hurt the company in putting forth its defense.
  • Be careful about emails. In management training I recommend that clients try NOT to debate discipline via email.  Exchange emails if needed to review the facts, but when you get into a discussion of the discipline get on a conference call or do it in a meeting.  Legitimate discussion in email can be taken out of context, and skewed against the company by a skillful plaintiff’s attorney.

No one who was not directly involved in this case on can say whether plaintiff was ‘right’ or Walmart was ‘wrong’.  However, clearly this litigation has cost the company in dollars and reputation. No employer can prevent every case or verdict, but adopting some of these steps, and making sure to train your managers and HR staff on these points could minimize your risk of being the next big headline.