• Finley Employment Law

Martinez v. Costco Wholesale Corp.

Updated: Oct 25


In Martinez v. Costco Wholesale Corp., 2020 WL 4922318 (S.D. Cal. August 21, 2020), Plaintiff Marisa Martinez (“Plaintiff”) sued Costco WholeSale Corporation (“Costco”) for disability discrimination, among other things. The salient facts of Martinez are set forth below:


Plaintiff’s Employment at Costco

Plaintiff was employed at Costco for over twenty-five years until her resignation in March 2019. At the time of her resignation, Plaintiff was a Buyer (a management-level position).


Plaintiff reported to General Merchandise Manager Julie Daleo, who in turn reported to Vice President General Merchandise Manager Steve Mantanona. Beginning in March 2018, Mantanona reported to Executive Vice President Russ Miller (“Miller”).


In January 2019, Plaintiff was diagnosed with “‘a significant history of severe anxiety with panic attacks.’” (Martinez v. Costco Wholesale Corp., 2020 WL 4922318, *2 (S.D. Cal. August 21, 2020).) Her doctor reported that Plaintiff “‘has an extreme fear of travel to Mexico which is exacerbating her panic attacks.’” (Id.)


In August 2018 and then again in November 2018, Plaintiff was informed by Costco that “travel to Mexico three times a year was an essential duty of her position.” (Id.) However, Plaintiff stated that during the twelve years that she was a buyer at Costco, she traveled to Mexico only a total of seven times and competently performed her duties. She further explained that she had received high marks and made her numbers without having to visit Mexico three times a year. Moreover, there were other buyers who had not visited in eight and five years.


Plaintiff’s Disability and Travel Concerns

On January 17, 2019, Plaintiff was diagnosed with “‘a significant history of severe anxiety with panic attacks.’” (Id.) In a letter, Plaintiff's doctor explained that Plaintiff “‘has an extreme fear of travel to Mexico which is exacerbating her panic attacks.’” (Id.) On November 19, 2018, Plaintiff was diagnosed with depression.


Plaintiff testified that Daleo knew that Plaintiff had a medical diagnosis of anxiety. Mantanona also knew that Plaintiff was nervous given that he would call her “Nervous Nellie” all the time. (Id.)


Daleo testified that she learned about Plaintiff’s anxiety 12 years ago and knew that Plaintiff feared her safety while traveling to Mexico.


Mantanona testified that he learned about Plaintiff’s anxiety in January or February 2019. He denied making a comment about her nervousness in front of upper management, denied making a comment during a trip to Mexico that Plaintiff was scared to be there, and denied making the “Nervous Nellie” comment.


Plaintiff testified that during one business trip to Mexico, the fourth car in her caravan got held up by gunpoint and robbed.


Alleged Acts of Discrimination and Retaliation

On August 20, 2018, Plaintiff submitted a travel authorization form for an October 2018 trade show in New York for approval by Daleo and Mantanona. On August 28, 2018, Daleo told Plaintiff that Mantanona would not approve any of Plaintiff’s travel until she goes to Mexico.


On August 29, 2018, Mantanona had a meeting with Plaintiff and Daleo. During this meeting, Plaintiff stated that for travel to Mexico, she wanted “detailed itineraries, travel in groups with a Spanish speaker and men, and if available, an armored car.” (Id. at *3.) “At the end of the meeting, Mantanona recapped Plaintiff’s concerns and said he would get back to her as soon as possible.” (Id.) At the time of litigation, the parties disputed whether and to what extent Mantanona and Daleo addressed Plaintiff’s safety concerns subsequent to this August 29, 2018 meeting.


On November 8, 2018, Plaintiff met with Mantanona and Daleo and was given a memorandum (the “November 8 Memo”), which emphasized the importance of traveling to Mexico and that going forward, Plaintiff must travel to Mexico City at least three times per year. The November 8 Memo further stated that Plaintiff would not be fulfilling her job duties as a Mexico Buyer if she was unwilling to travel to Mexico. The November 8 Memo also stated that Plaintiff had four weeks to make a decision; and if she was unwilling to fulfill her job duties, then she would have 60 days to find another open position at Costco. If she was unable to find an open position at Costco, then she would be moved to the ICS position at the San Diego Regional Office.


Plaintiff subsequently scheduled a trip to Mexico City, which was supposed to start on November 27, 2018. However, Plaintiff later cancelled the trip because she was approved for medical leave for anxiety and depression through January 14, 2019.


On January 14, 2019, Plaintiff returned to work “‘without restriction’” as per her doctor’s note. (Id. at *5.) In a subsequent doctor’s note, dated January 17, 2019, her doctor stated that Plaintiff suffers from “‘history of severe anxiety with panic attacks’” and that travel to Mexico is not recommended. (Id.)


On January 25, 2019, Plaintiff received a letter from Cindy Schmertzler (“Schmertzler”), Costco’s Director of Integrated Leave, asking for clarification of her leave restrictions and inquiring about possible alternative accommodations that would allow Plaintiff to travel to Mexico. On January 30, 2019, Plaintiff provided Schmertzler with a doctor’s note, dated January 29, 2019, stating that Plaintiff should not travel to Mexico for six months or until Plaintiff believes that appropriate safety measures are being implemented.


On February 11, 2019, Plaintiff spoke with Schmertzler on the telephone about the accommodation, and in a follow-up email (dated February 13, 2019), Schmertzler explained that travel to Mexico was an essential duty of Plaintiff's Mexico Buyer position. Plaintiff and Schmertzler also discussed any open positions that do not require travel to Mexico, but there were no such positions in San Diego. In light of that, Plaintiff would be placed on leave of absence for six months.


Plaintiff subsequently saw her doctor, who in a doctor’s note (dated February 22, 2019), recommended that Plaintiff take an immediate medical leave of absence because of Plaintiff’s worsening insomnia and panic attacks due to her current work situation. On February 22, 2019, Plaintiff emailed the doctor’s note to Daleo. In a letter dated (February 28, 2019), Schmertzler approved Plaintiff’s request for medical leave.


After accepting a job offer from the University of San Diego, Plaintiff resigned from Costco on March 7, 2019.


Plaintiff subsequently filed a lawsuit against Costco, alleging, among other things, disability discrimination under California law.


Disability Discrimination under California Law

Costco argued that Plaintiff’s disability discrimination claim under California law fails because, among other reasons, Plaintiff “did not suffer an adverse employment action [e.g., termination or demotion].” (Id. at *7.) Put another way, Costco argued, Plaintiff “did not suffer a tangible employment action such as a firing, demotion, or reassignment.” (Id. at *8.)


Plaintiff disagreed, and instead, “asserted that [Costco] subjected her to the following adverse employment actions, and taken together, demonstrate adverse employment actions: ‘(1) denying her travel to trade shows; (2) threatening to demote her to an ICS position; (3) threatening to place her on leave if she did not travel to Mexico; and (4) her boss, Mantanona, giving her the silent treatment.’” (Id.)


The Court noted that an “adverse employment action ‘materially affect[s] the compensation, terms, conditions, or privileges of…employment.’” (Id. at *9 (citing Chuang v. Univ. of California Davis, Bd. of Trustees, 225 F.3d 1115, 1126 (9th Cir. 2000).) In turn, adverse employment actions “include ‘assigning more, or more burdensome, work responsibilities’ as well as ‘termination, demotion, failing to promote, denial of an available job, adverse job assignments, official discipline, and significant changes in compensation or benefits.’” (Id. (citing Davis v. Team Elec. Co., 520 F.3d 1080, 1089 (9th Cir. 2008).) But “‘[m]ere ostracism’ or minor conduct…does not constitute an adverse employment action.” (Id. at *9 (citing Davis, 520 F.3d at 1089).)


The Court addressed Plaintiff’s argument that the following acts collectively constitute an adverse employment action: “(1) denying her travel to trade shows to [sic] New York in October 2018 and April 2019, to Germany in February 2019 and to Chicago in March 2019; (2) threatening to demote her to an ICS position; (3) threatening to place her on unpaid leave if she did not travel to Mexico; and (4) the silent treatment from Mantanona, her boss.” (Id. at *9.)


First, the Court addressed Plaintiff’s argument that Costco’s denial of Plaintiff’s travel to trade shows constituted an adverse employment action. The Court found that such denial may constitute an adverse action, in light of Plaintiff’s testimony that “attending trade shows was ‘an important part of [her] job because at these events, the global Costco Buying team would decide which items Costco would purchase for its stores.’” (Id. at *10.) Daleo also testified that “attending trade shows was important to succeed in [Plaintiff’s] job and it was also a requirement of her position.” (Id.)


Second, the Court addressed Plaintiff’s argument that the November 8 Memo – in which Costco informed Plaintiff that she would be given 60 days to find another position or move to ICS unless she traveled to Mexico City – constituted an adverse employment action.


The Court noted that other courts have held that “threats of demotion or reassignment of job duties have been held to constitute an adverse employment action.” (Id.) In Plaintiff’s case, the Court found that the November 8 Memo may constitute an adverse employment action because “[i]n essence, the November 8 Memo was notifying her that she would be demoted to a non-management position with less pay unless she travelled to Mexico.” (Id.)


Third, the Court addressed Plaintiff’s argument that the threat to place her on unpaid leave (if she did not travel to Mexico) constituted an adverse action. The Court held that the jury should decide this issue.


Finally, the Court addressed Plaintiff’s argument that silent treatment from Mantanona constituted an adverse employment action. The Court found that this silent treatment did not constitute an adverse employment action, given that Plaintiff “provide[d] no other facts demonstrating that this conduct impaired her job performance or prospects for advancement or promotion.” (Id. at *11.) Read the full court opinion here.


If you believe that you have been subjected to disability discrimination at work, call ((916) 612-0326) or email (contact@finleyemplaw.com) Finley Employment Law today. We serve clients throughout California, including Sacramento, Roseville, Walnut Creek, San Ramon, and Concord.


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