Diaz v. AutoZoners, LLC, WD 77861

• Court: Court of Appeal of Missouri (US)
• Writing for the Court: Karen King Mitchell, Presiding Judge
• Citation: 484 S.W.3d 64
• Docket Number: (C/w WD 77867),WD 77861
• Decision Date: 10 November 2015
• Parties: Delise Diaz, Appellant–Respondent, v. Autozoners, LLC, d/b/a AutoZone, et al., Respondents–Appellants.

484 S.W.3d 64

Delise Diaz, Appellant–Respondent,
v.
Autozoners, LLC, d/b/a AutoZone, et al., Respondents–Appellants.

WD 77861
(C/w WD 77867)

Missouri Court of Appeals, Western District.

OPINION FILED: November 10, 2015
Motion for Rehearing and/or Transfer to Supreme Court Denied December 22, 2015
Application for Transfer Denied April 5, 2016

Lynne Jaben Bratcher and Marie L. Gockel, Kansas City, MO, Kristi L. Kingston, Lee's Summit, MO, Attorneys for Appellant–Respondent.

Michael J. Gallagher, Kansas City, MO, Christine S. Keenan, Baton Rouge, LA, Attorneys for Respondents–Appellants.

Before Division Three: Karen King Mitchell, Presiding Judge, and Lisa White Hardwick and Anthony Rex Gabbert, Judges

Karen King Mitchell, Presiding Judge

Delise Diaz filed suit under the Missouri Human Rights Act (MHRA) against AutoZoners, LLC, and AutoZone, Inc. (collectively "Defendants"),¹ alleging that sexual harassment engaged in by two customers of the AutoZone store where Diaz worked created a hostile work environment and that Defendants retaliated against Diaz when she complained of the harassing conduct. A jury found in favor of Diaz and against both Defendants on her hostile work environment claim, but it found in favor of both Defendants on Diaz's retaliation claim. The jury awarded Diaz $75,000 in compensatory damages, $1,000,000 in punitive damages against AutoZoners, LLC, and $1,500,000 in punitive damages against AutoZone, Inc. The trial court awarded Diaz $243,826.25 in attorneys' fees and assessed costs against Defendants in the amount of $10,075.05. Defendants appeal the denial of their motion for judgment notwithstanding the verdict, or alternatively, their motions for new trial and remittitur. Diaz cross-appeals the trial court's denial of her post-trial request to amend the judgment for additional attorneys' fees and costs incurred in responding to Defendants' post-trial motions.

Background²

"AutoZone" is an auto parts retailer, and its corporate structure is as follows.³ AutoZoners, LLC, is a limited liability company licensed to do business in Missouri. It is wholly owned by AutoZone Stores, Inc. ("Stores"), and is responsible for leasing employees to Stores. Stores is a corporation, also licensed to do business in Missouri, and it is the sales agent to the general public. Stores is wholly owned by AutoZone Parts, Inc. ("Parts"). Parts is also a corporation, but it is not licensed to do business in Missouri. Parts is a wholesaler that provides inventory to Stores. Parts is wholly owned by AutoZone, Inc. AutoZone, Inc., is a publicly traded corporation, directly owned by shareholders and run by a board of directors. AutoZone, Inc., is a holding company, holding the stock of its domestic and foreign subsidiaries. "AutoZone, Inc." is a copyrighted name, owned by Parts. All four entities are organized under the laws of Nevada and share corporate headquarters in Memphis,

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Tennessee. In Missouri, all employees of "AutoZone" are employed solely by AutoZoners, LLC.⁴ Day-to-day operations of AutoZone establishments are handled by the management team of AutoZoners, LLC; AutoZone, Inc., has no control over AutoZoners, LLC.

In a typical AutoZone establishment, the store is divided into two sections: the DIY (do-it-yourself) section and the commercial sales section. Each store has a store manager, who oversees the entire store; followed by Parts Sales Managers (PSM), who are responsible for the DIY section of the store, and Commercial Sales Managers (CSM), who are responsible for the commercial sales section of the store;⁵ and then there are the basic sales personnel—drivers, customer service associates, and commercial specialists, who are the lowest level employees in the store.

AutoZone had a harassment and retaliation policy, which was described as a "zero tolerance" policy. The policy was outlined in a store handbook and code of conduct, which contains the mark, "copyright 2004–2011, AutoZone, Inc." at the bottom, and which was provided to every employee during orientation. The policy applied to employees, vendors, customers, and anyone else within the work environment. Under the policy, if an employee suffered harassment, he or she had the duty to timely report the harassment to the employee's immediate manager or supervisor, though there was some evidence that reporting to any member of management would be sufficient. The policy directed:

If you do not feel comfortable [reporting harassment to your supervisor], or feel your manager/supervisor is not handling the problem appropriately, go to higher levels of management and/or to the AutoZoner Relations department at the SSC.^{[6 ]}

The policy also provided a 1–800 number to contact if the employee felt that management failed to timely rectify the problem.

Diaz, who was an employee of AutoZoners, LLC, began working at the Excelsior Springs AutoZone store on May 12, 2008, as a commercial driver. The district manager at the time was Chuck Smith. After about six months, Diaz was promoted to PSM with Smith's approval. In July of 2009, Diaz moved to the Noland Road AutoZone store, pursuant to her request for a transfer. While working at the Noland Road location, Diaz was placed in the management-in-training program, which was an internal succession program that essentially trained current employees to become managers. In January of 2010, Diaz was moved to the Truman Road AutoZone store because of the need for a Truman Road PSM to change locations. At the Truman Road store, Brent George was the store manager, and Shane Williams was a CSM.

Around March or April of 2010, after Diaz began working at the Truman Road store, she began having problems with a commercial sales customer named Mark. Mark would tell Diaz that she was pretty, and he would comment on the size of her breasts and rear end. Diaz advised Mark that his comments were inappropriate and unwelcome. Sometime in April, Mark began to get "touchy-feely" with Diaz, patting

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her on the back or touching her lower back. In late April or early May of 2010, Diaz complained of Mark's behavior and comments to Williams, the store's CSM. Williams laughed it off and told Diaz to "suck it up" and "do [her] job." Mark's conduct continued.

In November of 2010, Mark offered to sell Diaz some lingerie and asked her what size undergarments she wore; when she advised him that it was none of his business, Mark began guessing. Diaz reported the conduct to Williams again. Williams again responded by laughing and said "Oh, he's just a pervert. And so am I." Williams advised Diaz to "[g]o back, and do [her] job."

On another occasion in either November or December of 2010, Diaz was bent over the counter placing price tags on merchandise when Mark came up behind her, grabbed her rear end, and said, "Give me some of that juicy fruit." Diaz told Mark to keep his hands off of her, and she reported the incident to both Williams and George (the store manager). Williams told Diaz to go back to work and explained that Mark spends money in the store and Williams did not want to lose a commercial account. George responded by saying that he would speak with Williams about the incident and have Williams take care of it.⁷ Mark's conduct continued.

In January of 2011, Mark again grabbed Diaz from behind and remarked, "Oh, seems like your butt is getting bigger"; he also asked to see her breasts. Diaz advised Mark to keep his hands off of her and emphatically denied his request, noting that his conduct and remarks were inappropriate. Diaz again complained to Williams, who told her to go back to work, but indicated that he would discuss it with George.

On another occasion, Mark entered the store while Diaz had her back turned and was bent over the store's safe. Mark grabbed Diaz's crotch and rear end, remarking, "that's a wet one." Diaz again reported Mark's behavior to George and Williams, who again told Diaz they would take care of it. But Mark's conduct continued.

In February of 2011, Mark approached Diaz while she was assisting other customers, rubbed his arm against her breast, and said, "Hook me up, huera."⁸ Mark also told her, in Spanish, that she was pretty. Diaz reported this incident to Williams, who told her to "suck it up" and do her job; he was not going to lose a commercial account over her crying. She also reported this incident to George, who told her he would talk to Williams about it. On another occasion in February of 2011, Mark again rubbed against Diaz while she was helping other customers, and Diaz told him that he was invading her space. When Mark tried to touch her breasts, Diaz warned him, "If you touch me, I will call the police this time. I'm not going to allow you to keep touching me." Mark became angry and told Diaz that he had a commercial account, and that nobody was going to do anything to him. Mark threatened to have Diaz fired. He then called Williams and told Williams that Diaz was refusing him service. Williams then called Diaz and told her to make Mark a priority.

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After this incident, Diaz again complained to George and Williams, but this time, they indicated they would "have a talk" with the individuals. Though Diaz did not know if George and Williams followed through, she...