California Wrongful Termination Verdict Against Rite Aid Goes Through Appeals and Retrials and is Ultimately Upheld

When plaintiffs win wrongful termination claims in California, the defendants have the right to file appeals. If the lower court is reversed, a new trial might be ordered. Once a verdict has been reached on the new trial, either party can appeal. If the appeals court reverses again, it will go back to court for another trial. As people can see, winning a verdict is not always the end of a case because of the appeals process and potential retrials. In the case of Martinez v. Rite Aid Corp., Cal. Ct. App. Case No. B292672, the appeals court considered a case that had gone through trials and appeals three times to determine whether the court had committed reversible error by failing to give a jury instruction the appeals court had instructed the trial court to give on the second appeal.^[1]

Factual and Procedural Background

Maria Martinez formerly worked for Rite Aid Corporation before she was terminated by her supervisor, Kien Chau. In Nov. 2008, she filed a lawsuit against Chau and Rite Aid in which she alleged multiple causes of action, including intentional infliction of emotional distress, wrongful termination based on age, disability, filing a sexual harassment complaint, and taking a leave of absence in violation of public policy, and invasion of privacy. The case went to the first jury trial in 2010, and the jury returned a verdict in favor of Martinez. She was awarded compensatory damages in the amount of $3.4 million and punitive damages in the amount of $4.8 million.

Rite Aid appealed the verdict, arguing that the verdict was not supported by sufficient evidence. The California Court of Appeal found that sufficient evidence had been presented to support Martinez’s causes of action for intentional infliction of emotional distress and her wrongful termination claims. However, it found that insufficient evidence had been presented to prove the invasion of privacy cause of action. It also found that the jury instruction given by the court about compensatory damages was improperly ambiguous and that the award of punitive damages was not supported by the evidence. The case was sent back to the trial court for a new trial on the issue of compensatory damages for Martinez’s wrongful termination and intentional infliction of emotional distress causes of action.

At the second trial in 2014, the jury returned a special verdict in favor of Martinez. The jury found that her wrongful termination in Aug. 2007 was a substantial factor for the harm she suffered. It awarded her $321,000 on the wrongful termination cause of action. The jury also awarded her $0 for intentional infliction of emotional distress by Rite Aid and $20,000 for intentional infliction of emotional distress by Chau. Martinez filed an appeal. The California Court of Appeal found that the jury’s verdict and damages award were inconsistent and required reversal. Since the case was going to be tried again for a third time on the compensatory damages for Martinez’s wrongful termination and intentional infliction of emotional distress claims, the Court of Appeal provided instructions to the trial court to prevent the same types of errors that had happened in the first two trials.

The court was told to instruct the jury that it must abide by the verdicts in Martinez’s favor on the wrongful termination and intentional infliction of emotional distress claims from the first trial in 2010 since they were binding on the jury. It also told the court to instruct the jury to allocate the non-economic damages it found between Chau and other employees since evidence had been presented that other employees and Chau had engaged in conduct that inflicted emotional distress while they were working within the scope and course of their jobs.

When the case went to trial for the third time, the judge instructed the jury that it was only to decide the compensatory damages and not determine whether the conduct was a substantial contributing factor since that had already been determined by the first jury. However, the court did not instruct the jury to allocate the non-economic damages for the intentional infliction of emotional distress claim between Chau and the other employees. The jury returned a verdict in favor of Martinez on March 27, 2018. It awarded her $2,012,258 on her wrongful termination claim, including $464,258 in past economic losses, $574,000 in future economic losses, $374,000 for her past non-economic losses, and $600,000 for her future non-economic damages. She was awarded $4 million for her past emotional distress and nothing for any future emotional distress. Rite Aid appealed, arguing that the trial court committed reversible error by failing to give the jury instruction on allocating the intentional infliction of emotional distress damages between Chau and other employees to avoid duplicative awards.

Issue: Whether the Trial Court Committed Reversible Error by Failing to Give the Instruction Recommended by the Court of Appeal?

The case was appealed to the Court of Appeal for a third time to determine whether the trial court’s decision to not give the instruction it was advised to give by the Court of Appeal amounted to a reversible error. Rite Aid also argued that Martinez’s damages for past income losses should also be reduced by the income she had earned after being fired from Rite Aid until the jury’s verdict. Martinez argued that the trial court’s failure to give the instruction it was advised to give did not amount to reversible error since Rite Aid was vicariously liable for the actions of all of its employees and all of their conduct toward Martinez occurred while they were each working within the scope and course of their jobs. Rule: When the Court of Appeal includes requirements for the trial court to implement special proceedings, its decision is binding on the trial court. The trial court must follow the orders of the Court of Appeal.

Lower courts must follow the rulings of higher courts. When an appeals court tells a trial court on an appeal to do certain things during a retrial, the trial court is supposed to follow the instructions. However, the trial court ignored part of the instructions the Court of Appeal gave to it for the third trial.

Analysis

Wrongful termination claims can be filed when an employer wrongfully terminates an employee based on his or her protected class or on the employee engaging in protected activities._[2] It is similarly unlawful for an employer to retaliate against an employee by taking adverse employment action against him or her for filing sexual harassment complaints or engaging in other similar types of protected activity.^[3] In Martinez’s case, her wrongful termination causes of action were based on disability and age discrimination as well as engaging in the protected activities of taking a leave of absence and filing a sexual harassment claim. The issue on the third appeal, however, did not have to do with whether she had presented enough evidence to support the jury’s verdict. Instead, the case had been reversed earlier because of errors in instructions and the determination of compensatory damages amounts.

The court considered whether the trial court’s failure to give the instruction the Court of Appeal had advised it to give amounted to a reversible error. Trial courts are bound by the orders of the Court of Appeal and are required to follow them. When a trial court fails to follow the Court of Appeal’s instructions on remand, the Court of Appeal must determine whether its variance from the instructions was material and affected the outcome of the case or if it was immaterial and did not.

The court noted that it had ordered the trial court to conduct a new trial on the compensatory damages, which the trial court did. While the trial court refused to give the instructions it was advised to give, the Court of Appeal found that its variance was not material. The court noted that the judge did not advise the jury to give duplicate damages for the actions of individual employees and Chau. It also noted that since all of the conduct occurred while the employees were working within the scope of their employment, Rite Aid was still vicariously liable for their wrongful actions while they were on the job. It also found that the way in which the jury awarded damages demonstrated that they understood what to do. The court pointed to the fact that the jury awarded Martinez $4 million for her past non-economic damages on the intentional infliction of emotional distress claim but $0 on any future non-economic damages on that cause of action.

The Court of Appeal also noted that two of the jury instructions that Rite Aid was objecting to were actually submitted by Rite Aid. It stated that an appellant cannot appeal its own instructions.

Finally, the court considered whether Martinez’s past economic losses should be reduced by the income she had earned from jobs she had obtained since being fired from Rite Aid. The court concluded that they should be reduced and lowered the award for her past economic losses from $464,258 to $323,218 to account for the $140,840 she had earned through other jobs since being fired.

Conclusion

The Court of Appeal affirmed the verdicts of the jury and the trial court’s decisions. It did modify the award of past income losses to account for the wages Martinez had earned after being fired until the verdict was issued. Martinez was awarded her costs on the appeal.

Talk to an Employment Discrimination Attorney in Los Angeles

Cases that go to trial and verdict might be appealed and remanded for new trials when the trial courts make reversible errors in their jury instructions. If you believe your former employer wrongfully terminated you based on a discriminatory reason or in violation of public policy, talk to an experienced employment attorney at the law firm of Steven M. Sweat, APC by calling 866-966-5240.

Sources

[1] Martinez v. Rite Aid Corp.

[2] Wrongful Termination

[3] Retaliation