Haddad v. Wal-Mart Stores, Inc.

• Citation: 455 Mass. 91,914 N.E.2d 59
• Decision Date: 05 October 2009
• Docket Number: SJC-10261
• Parties: Cynthia HADDAD v. WAL-MART STORES, INC.
• Court: United States State Supreme Judicial Court of Massachusetts

914 N.E.2d 59

455 Mass. 91

Cynthia HADDAD v. WAL-MART STORES, INC.

SJC-10261

Supreme Judicial Court of Massachusetts, Berkshire.

Argued February 5, 2009.

Decided October 5, 2009.

Robert S. Mantell, Boston (Richard E. Fradette, Manchester, NH, & David E. Belfort, Cambridge, with him) for the plaintiff.

David C. Casey, Boston (Stephen T. Melnick with him) for the defendant.

Jo Ann Shotwell Kaplan, Martin J. Newhouse, Boston, & John R. Pagliaro, for New England Legal Foundation & another, amici curiae, submitted a brief.

Patricia A. Washienko, Boston, for Jewish Alliance for Law and Social Action & others, amici curiae, submitted a brief.

Present: MARSHALL, C.J., IRELAND, SPINA, COWIN, CORDY, BOTSFORD, & GANTS, JJ.

COWIN, J.

The plaintiff filed a complaint in the Superior Court against Wal-Mart Stores, Inc. (Wal-Mart), alleging unequal compensation and termination of employment based on gender in violation of G.L. c. 151B, § 4(1). The complaint also included claims for defamation.¹ Following a jury trial, Wal-Mart was found liable on the G.L. c. 151B, § 4(1), claim, and the plaintiff was awarded $972,774 in compensatory damages and $1 million in punitive damages.²

Wal-Mart moved for judgment notwithstanding the verdict or, in the alternative, for remittitur or a new trial. The motion judge, who was also the trial judge, vacated the award of punitive damages but otherwise denied the motion. The parties cross-appealed; we granted the plaintiff's motion for direct appellate review.

On appeal, Wal-Mart claims that the judge erred in denying its motion for judgment notwithstanding the verdict as to the gender discrimination claim, and in declining to reduce the front pay award. Wal-Mart asserts also that a new trial is required because of the improper admission of certain evidence, misconduct in the plaintiff's closing argument, and errors concerning two jury instructions. In her cross appeal, the plaintiff claims that the judge erred in allowing Wal-Mart's motion for judgment notwithstanding the verdict with respect to punitive damages.

We conclude that there was sufficient evidence for the jury to find that Wal-Mart's proffered motive for the plaintiff's termination was a pretext, and consequently that Wal-Mart acted with a discriminatory animus. We conclude also that there was sufficient evidence to support the jury's award of front pay damages. None of Wal-Mart's claims regarding the trial convince us that the judge was wrong in denying the defendant's motion on the basis of the asserted errors in the trial proceedings.³ Accordingly, we affirm the judge's decision denying the defendant's motion for judgment notwithstanding the verdict on the liability and front pay claims.

We do, however, conclude that the judge erred in regard to the punitive damages award. He determined incorrectly that the jury were not warranted in finding intentional and outrageous conduct (a precondition for punitive damages). His decision is also confusing because it suggests, at least in part, and contrary to his proper instruction to the jury, that punitive damages could not be awarded unless it was proved that Wal-Mart acted with the specific knowledge that it was deliberately violating the antidiscrimination statute, G.L. c. 151B. We therefore vacate the judge's order and reinstate the jury's award of punitive damages.

The plaintiff argues also that our standard for awarding punitive damages should be modified so that a showing of intentional discrimination alone suffices for an award of punitive damages. While we decline the plaintiff's invitation to modify the standard in this respect, we take this opportunity to set forth a new standard in language that more clearly describes the considerations necessary for an award of punitive damages in the specific context of a discrimination claim.

1. Factual background. Because Wal-Mart alleges that the evidence was insufficient, we summarize the evidence in the light most favorable to the plaintiff.⁴, ⁵ The plaintiff, Cynthia Haddad, worked as a pharmacist at Wal-Mart for ten years, seven of those in Wal-Mart's Pittsfield store. Pursuant to Massachusetts law and regulation, every pharmacy must have a "manager of record." The manager of record, who must be a registered pharmacist, is responsible for complying with State and Federal reporting requirements and supervising the pharmacy staff. A registered pharmacist must be on duty during a pharmacy's hours of operation. See, e.g., G.L. c. 112, §§ 24, 39; 247 Code Mass. Regs. §§ 6.01, 6.02, 6.07. During the period at issue, Wal-Mart employed one pharmacist at its Pittsfield store, who was designated the "pharmacy manager," to serve as the "manager of record." A staff pharmacist generally worked under the pharmacy manager, and several pharmacy technicians (who are not registered pharmacists) assisted the staff pharmacist. At times, only one pharmacist would be on duty. In addition to their hourly wages as pharmacists, pharmacy managers received an additional hourly stipend as well as an annual bonus.

For most of the plaintiff's tenure at Wal-Mart, she served as staff pharmacist; she received consistently excellent evaluations. In March, 2003, the plaintiff accepted the position of pharmacy manager on a temporary basis.⁶ At that time, and until her termination thirteen months later, the plaintiff was paid at an hourly rate considerably lower than any male pharmacy manager in the Pittsfield region. In addition, although she was told that she would receive the additional hourly pay that Wal-Mart paid all pharmacy managers, she did not receive this differential. After numerous complaints, on April 9, 2004, she finally received a check for the pharmacy manager bonus that others received in February, but she never received the thirteen months' worth of additional hourly pay.

On April 14, 2004, Wal-Mart district manager David Hogan and two other Wal-Mart managers met with the plaintiff at the Pittsfield store. They questioned her about two prescriptions that had been fraudulently written and filled by pharmacy technician Kristin Baran.⁷ One of the prescriptions had been written in October, 2002, while the plaintiff was on duty, and one was written on March 20, 2004, while a male pharmacist, Richard Blackbird, was on duty. Baran admitted, immediately after the meeting between the Wal-Mart supervisors and the plaintiff, that she falsified the October, 2002, prescription.

The plaintiff denied any knowledge of the fraudulent prescriptions, but told Hogan that the first one could have been written when she briefly left the pharmacy area to purchase a soda at a nearby counter; when she was in the restroom; when she was in the front of the pharmacy talking to customers; or when she was in the back of the pharmacy eating lunch or counting narcotics. The plaintiff's employment was terminated that same day. She was told that the reason for her termination was based on her statement during the interview that she "fail[ed] to secure the pharmacy" because, in violation of an unspecified Wal-Mart policy, she had briefly left the pharmacy area unsecured, leaving Baran unattended in the pharmacy area. Baran's employment was also terminated the same day.

The more recent fraudulent prescription contained Blackbird's initials. Neither Blackbird, who was on duty when the second fraudulent prescription was written, nor any other pharmacist was questioned about or disciplined for it. Indeed, Blackbird was appointed to be pharmacy manager at the time of the plaintiff's departure.⁸ Blackbird testified that he commonly left the pharmacy area unsecured to talk to a customer in the over-the-counter area, to go to the restroom, or to get a snack; he was unaware of any policy prohibiting this practice and was never disciplined for doing so. Other testimony at trial indicated that it was common practice for pharmacists to leave the pharmacy area briefly unsecured⁹ and go to other areas of the store during their shifts. Copies of Wal-Mart's written policy regarding lunch breaks, effective in October of 2002 and introduced in evidence, indicated that it was optional whether a pharmacy manager closed and locked the pharmacy during lunch breaks. There was also evidence that this policy later changed several times.

Wal-Mart employees gave inconsistent reasons for the plaintiff's termination and were also inconsistent regarding who was responsible for the decision. Answers to interrogatories, submitted by Hogan on his own behalf and on behalf of Wal-Mart,¹⁰ were introduced at trial. In these answers, Hogan stated, contrary to his trial testimony, that the plaintiff's employment was terminated because she had not properly monitored store charge accounts and had allowed a technician to maintain a charge account.¹¹ Hogan testified that he told the store manager that the plaintiff was terminated for allowing controlled drug losses. Another district manager told Blackbird that the plaintiff was terminated because of discrepancies in the controlled drug inventory. In addition, Hogan testified on direct examination that he made the decision to fire the plaintiff for her failure to secure the pharmacy; however, on cross-examination, after being shown his answers to interrogatories, Hogan testified that he had been "instruct[ed]" to fire the plaintiff by his supervisor, the regional manager, and that he was told to give the reason as "gross misconduct." Moreover, the plaintiff's "exit interview" forms, signed by three Wal-Mart managers, were dated April 13, 2004,¹² the day before the termination, and indicated the reason for the plaintiff's termination as "gross misconduct . . . misappropriation." Another explanation offered for the plaintiff's termination was that she gave pharmacy technicians her computer sign-on codes.

According to the record in this case, at the time of the plaintiff's termination, in the geographic district containing the Pittsfield store, twenty of...