Monday, May 14, 2018

Jury Awards $8 M to Discharged Employee When Evidence of Misconduct is Lost

In a dramatic lesson on the need to not only document employee misconduct, but to save and safeguard that documentation, a Fresno, California jury last week awarded an ex-employee almost $8 million in her wrongful termination suit against Chipotle Mexican Grill in what can only be described as incredibly unfortunate series of mishaps for the company or a total miscalculation on the part of the restaurant’s supervisors to push the employee out the door.

Jeanette Ortiz had worked for Chipotle for 14 years and most recently was earning about $70,000 annually. Her performance evaluations were excellent. She was in line for a promotion that would have increased her salary substantially. Prior to her discharge, she had made a worker’s compensation claim for carpel tunnel syndrome. Then the company discharged her for stealing. She alleged in her lawsuit that her supervisors tried to coerce her into dropping her worker’s comp claim and when that didn’t work, they accused her of stealing a little over $600 from a safe at the Fresno restaurant. They also claimed that they had a video of her taking the money out of the safe, fanning it and appropriating it for herself.

Things started going badly for the company when Ms. Ortiz asked to see the video. The company claimed it was no longer available because, get this, it had been recorded over. She sued for wrongful termination, among other claims.

The company later not only claimed that the video evidence of her stealing was accidentally erased by another recording, but that it “lost” other incriminating texts and evidence. Chipotle offered her $1,000 to settle her case. The jury gave her $8 million for lost wages and emotional distress. Still pending is Ms. Ortiz’s demand for punitive damages, so that number could go up even more dramatically.

The lessons for employers are apparent here. Assuming that the Chipotle supervisors and managers who made the decision to discharge Ortiz did not, in fact, fabricate the theft allegations, this jury award is a stunning example of why it is not only important to document the reasons for discharging an employee, but to and safeguard that documentation. This is especially true when you can pretty much count on the fact that other circumstances create the perfect groundwork for a lawsuit. In this case, Ortiz had made a worker’s compensation claim, which apparently the company was either contesting or was trying to coerce her to abandon. In either case, discharge in retaliation for filing a worker’s compensation claim was a looming issue to which any employer should have been sensitive.  In these circumstances, or when an employee possesses one or more protected characteristics,  an employer should not feel precluded from taking adverse action when appropriate, but the need to have solid documentation is paramount.

The next lesson for employers from this case is when a situation goes bad, it is not the time to stand on principle.  When the company discovered that all of its evidence of Ms. Ortiz’s misconduct was destroyed or missing, it was time to make a real effort to resolve her claims. Offering her a settlement of $1,000 under these circumstances probably only served to incense her. When you lose all of your evidence of wrong doing and you have fired a long term employee with an excellent record who has a worker’s compensation claim pending, an employer better get serious about resolving the situation, otherwise a jury might give away a lot more of the company’s money.

Thirdly, if there never was a video or text messages which evidenced misconduct by Ortiz, then this case is a reminder of the perils to an employer of overstating its case against an employee. Calling an employee’s bluff with evidence that doesn’t really exist is always a risky game that generally works best on television only. If, like here, an employer references evidence of wrong doing that doesn’t exist and the employee calls the employer’s bluff, the company will lose all credibility.

Finally, this case underscores again the importance of having well trained supervisors. Good cause may have existed for the discharge of the employee in this case, but no one will ever be convinced of that because of the many missteps of the people in charge. Training on proper ways to discipline and document those decisions is invaluable to any employer.