Delise diaz v. Autozoners, LLC, D/B/A Autozone
484 S.W.3d 64
Mo. Ct. App.2015Background
- Diaz, an AutoZoners, LLC employee working as a Parts Sales Manager, alleged repeated sexual harassment by two commercial customers (Mark and Jimmy) at an AutoZone store; she reported incidents to store supervisors (Shane Williams and Brent George) and to regional HR (Karen Brown).
- Supervisors often dismissed or trivialized complaints, rarely investigated promptly, and Williams was later terminated for failing to report policy violations; Diaz was eventually transferred after over a year of ongoing incidents.
- Diaz sued AutoZoners, LLC and AutoZone, Inc. under the Missouri Human Rights Act (MHRA) for a hostile work environment (third-party/customer harassment) and retaliation; the jury found for Diaz on the hostile work environment claim and awarded $75,000 compensatory and punitive damages ($1,000,000 against AutoZoners, LLC and $1,500,000 against AutoZone, Inc.); retaliation claims failed.
- Trial court awarded Diaz $243,826.25 in attorneys’ fees and costs; Defendants moved for JNOV/new trial/remittitur; post-trial, Diaz sought additional fees for responses to those motions which the court denied as already anticipated.
- On appeal the court reversed liability as to AutoZone, Inc. (holding it was not Diaz’s employer under the MHRA), affirmed the verdict and damages against AutoZoners, LLC, denied remittitur and due-process and statutory-cap challenges to punitive damages, and remanded attorneys’ fees for reconsideration in light of the reversal as to AutoZone, Inc.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether AutoZone, Inc. was an "employer" under the MHRA | AutoZone, Inc. acted in the interest of AutoZoners, LLC (provided handbook, policies, HR materials) and thus was a statutory/joint employer | AutoZone, Inc. was a holding company with no direct control over employment, not licensed in Missouri, and had no direct oversight of Diaz | Reversed liability as to AutoZone, Inc.; it was not Diaz’s employer under MHRA (no evidence it directly oversaw or was actively involved in discrimination) |
| Whether Diaz made a submissible hostile-work-environment claim from customer harassment | Harassment was severe, pervasive, and caused psychological/medical harm; she repeatedly reported it and employer knew or should have known | Conduct did not materially affect employment; she continued working and medical treatment was limited | Verdict sustained: submissible case proven—harassment was objectively and subjectively hostile and employer had notice and failed to act promptly |
| Whether punitive damages against AutoZoners, LLC were supported and constitutional | Employer acted with reckless indifference (ignored complaints, prioritized commercial accounts), supporting punitive damages | Employer had policies/training and attempted remediation; punitive award excessive and violated due process/statutory cap | Punitive award against AutoZoners, LLC upheld: evidence supported reckless indifference; 13:1 ratio not grossly excessive; award did not exceed statutory cap given inclusion of fees/costs in net judgment |
| Whether attorneys’ fees award was appropriate and whether post-judgment fees should be added | Counsel’s rates/hours reasonable; post-judgment work merited additional fees | Rates/hours excessive; limited success warrants reduction; trial court already compensated anticipated post-judgment work | Trial court did not abuse discretion in awarding $243,826.25; supplemental fee request denied as anticipated; but fee award remanded for reconsideration in light of reversal re: AutoZone, Inc. |
Key Cases Cited
- Burlington Indus. v. Ellerth, 524 U.S. 742 (employer vicarious liability and affirmative defense framework for supervisory harassment)
- Meritor Sav. Bank v. Vinson, 477 U.S. 57 (employer duty to maintain workplace free of discrimination; hostile-work-environment theory)
- Kolstad v. American Dental Association, 527 U.S. 526 ("good faith" defense to punitive damages in vicarious liability context)
- BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (standards for reviewing excessiveness of punitive damages under due process)
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (considerations for punitive damages ratio and reprehensibility)
- Tolentino v. Starwood Hotels & Resorts Worldwide, Inc., 437 S.W.3d 754 (Mo. banc) (economic-realities factors in employer-status analysis)
- Alhalabi v. Mo. Dep’t of Nat. Res., 300 S.W.3d 518 (Mo. App.) (standard for punitive damages under MHRA)
- Freeman v. Dal-Tile Corp., 750 F.3d 413 (4th Cir.) (employer liability for third-party harassment where employer knew or should have known and failed to take prompt remedial action)
- Beckford v. Dept. of Corr., 605 F.3d 951 (11th Cir.) (collecting circuits holding employers may be liable for third-party-created hostile work environments)