Walmart loses EEOC incapacity discrimination lawsuit

Shoppers walk in front of a Walmart store in San Leandro, California, U.S., on Thursday, May 13, 2021.

David Paul Morris | Bloomberg | Getty Images

A Wisconsin federal court jury ruled that Walmart must pay more than $125 million in damages in a disability discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission, the federal agency announced Friday.

That verdict was quickly reduced Thursday to a statutory maximum of $300,000 by the judge in the case, which involved the termination of Marlo Spaeth, a 16-year employee who has Down syndrome, from the Walmart Supercenter in Manitowoc, Wisconsin.

But Walmart still may have to pay additional money for Spaeth’s back pay, front pay, as well as for interest and litigation costs, an EEOC spokeswoman told CNBC. The judge will determine those amounts at a later date.

The EEOC’s complaint in Green Bay court alleged that Walmart in its firing of Spaeth violated the Americans with Disabilities Act, which prohibits discrimination based on a person’s disability.

In the lawsuit, the federal agency said the retailer changed Spaeth’s longtime work schedule and refused to accommodate her requests for different hours, even though she faced challenges because of her disability.

The complaint also said she struggled to keep up with the new hours, leading to disciplinary action for absenteeism.

Ultimately, the company fired Spaeth, despite her having received positive performance reviews from managers.

It also declined to rehire her, even after her mother and sister tried to intervene and find a solution, the EEOC said.

“Employers, no matter how large, have an obligation under the law to evaluate the individual circumstances of employees with disabilities when considering requests for reasonable accommodations,” Chicago District Director Julianne Bowman said in a press release announcing the verdict.

“Ms. Spaeth’s request was a simple one and denying it profoundly altered her life.”

Walmart spokesman Randy Hargrove said the company is reviewing its next steps.

He said the retailer wanted to resolve the matter with Spaeth, but said the EEOC’s demands “were unreasonable.”

“We do not tolerate discrimination of any kind, and we routinely accommodate thousands of associates every year,” Hargrove said. “We often adjust associate schedules to meet our customers’ expectations and while Ms. Spaeth’s schedule was adjusted, it remained within the times she indicated she was available.”

The jury in the case took less than four hours to reach its verdict Thursday. The verdict was announced shortly after jurors sent out a note asking if they were limited in the amount of damages they could award, and were told no, according to a summary of the proceedings released Friday.

The jury awarded Spaeth $150,000 for emotional pain and mental anguish and another $125 million in punitive damages.

After lawyers told the judge that the legal maximum amount of combined compensatory and punitive damages could not exceed $300,000, he ordered that amount as the judgment.

Spaeth’s sister, Amy Jo Stevenson, and the jury forewoman declined to comment on the case.

Walmart’s shares were relatively unchanged on Friday and closed at $141.56. The retailer’s shares have fallen nearly 2% so far this year.

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