US Pharm. 2009;34(12):56-60.
Legislation to apply the principle of equal pay for equal work without discrimination because of sex is a matter of simple justice.
-President Dwight D. Eisenhower, 19561
A recent case from the Supreme Judicial Court of Massachusetts affirmed a jury verdict in favor of a female pharmacist who claimed she was paid less than her male counterparts.2 With interests, costs, and attorney fees, the recovery from the defendant chain store corporation will be well over $3.5 million.3,4
Facts of the Case
Cynthia Haddad worked as a pharmacist for Wal-Mart for 10 years, 7 of those years in the Pittsfield, Massachusetts, store. For the majority of this time, she worked as a staff pharmacist and consistently had excellent evaluations. In March 2003, the plaintiff accepted the position of pharmacy manager. From that point until her involuntary termination 13 months later, she was paid at an hourly rate considerably lower than any male pharmacy manager in the geographic region. Although she was told that she would receive the additional hourly pay that was paid to 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 13 months’ worth of differential hourly pay.
On April 14, 2004, a district manager, who was not a pharmacist, and two other supervisors met with Ms. Haddad. They questioned her about two prescriptions that had been fraudulently written and filled by a pharmacy technician. One of the prescriptions, for Prevacid (lansoprazole), had been written in October 2002, while the female pharmacist was on duty (well before she had been promoted to manager), and one was written on March 20, 2004, while a male pharmacist was working. The pharmacy technician on duty immediately admitted that she had falsified the October 2002 prescription. The female pharmacist denied any knowledge of the fraudulent prescriptions, but told the district manager that it 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. There was no written policy prohibiting a pharmacist from leaving the pharmacy for short periods of time while the pharmacist remained inside the store.
Ms. Haddad’s employment was terminated that day. She was told that the reason for her dismissal was based on her statement during the interview that she failed to secure the pharmacy, in violation of an unspecified policy, and that she had briefly left the pharmacy area unsecured while a technician was unattended in the pharmacy area. A written form filled out by the district manager indicated she was terminated for “gross misconduct, misappropriation.” The technician was also fired the same day.
The other fraudulent prescription contained the male pharmacist’s initials. Neither he, who was on duty when the second fraudulent prescription was written, nor any other pharmacist was questioned about it or disciplined for it. Employees testified that the pharmacy did not further investigate the second fraudulent prescription because the technician did not admit to having forged it. Ironically, the same male pharmacist was appointed to be pharmacy manager on the day that the female pharmacist was fired. The male pharmacist testified at trial that he commonly left the pharmacy area unsecured to talk to a customer in the OTC area, to go to the restroom, or to get a snack. He also stated that he was unaware of any policy prohibiting this practice and was never disciplined for doing so. He also admitted that within 3 months of assuming the manager position, he was earning substantially more per hour than the female pharmacist had ever earned during the 13 months that she held the position.
At the time of the female pharmacist’s termination, in the geographic district containing the store she worked at, 20 of the 21 managers above the pharmacy manager level were male, and all of the pharmacy technicians were female. Only two of the pharmacy managers were females.
Law and Evidence
Under Massachusetts law, every pharmacy must have a pharmacist “manager of record,” who is responsible for complying with state and federal reporting requirements and supervising the pharmacy staff, and a registered pharmacist must be on duty during a pharmacy’s hours of operation.5 During the period at issue, the pharmacy 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 assisted the staff pharmacist. At most times, only one pharmacist would be on duty.
On appeal, Wal-Mart argued that there was no evidence to support the jury’s finding that it discriminated against the female pharmacist on the basis of her gender. In its defense, the pharmacy offered several facially valid reasons for the plaintiff’s termination. According to this court, however, there was ample evidence from which a jury could have inferred that the pharmacy’s stated reasons were pretexts, and consequently that it acted with discriminatory intent. A pretext in law is the reason assigned to justify an act, which only has the appearance of truth but is without foundation.6 The court concluded that the jury could have justifiably decided that all of the pharmacy’s proffered reasons for terminating the plaintiff’s employment were false.
The district manager had previously given a variety of conflicting reasons for the termination. He testified that the female pharmacist was terminated because she failed to secure the pharmacy area and that she disclosed her computer sign-on code to a technician. This statement could be construed as false for several reasons. The pharmacist testified that she had never disclosed her password to anyone, and the sign-on code was known by everyone to be the pharmacist on duty’s first, middle, and last initials. A number of pharmacy employees testified that it was routine practice for pharmacists to log on to the computer in the morning and to stay logged on all day, so that a technician could easily use the pharmacist’s computer account. In addition, there was substantial evidence that similarly situated male pharmacists were treated differently than the female pharmacist for similar infractions of pharmacy policies. There was evidence that male pharmacists routinely left the pharmacy area unsecured in order to purchase snacks or drinks, and that no other pharmacist had been terminated for such a reason.
There was also evidence that the policy on lunch breaks did not mandate that a pharmacist secure the pharmacy before leaving the pharmacy area. The policy stated that a pharmacist may close and lock the pharmacy if only one pharmacist was on duty and was going on a meal break, and that the pharmacist may leave the pharmacy area, but should not leave the building. Additionally, evidence showed that the incident had occurred 18 months prior to the termination. There was testimony that male pharmacists routinely left the pharmacy to purchase food or beverages in the store or to assist customers. The reason initially checked on the exit interview form—“gross misconduct, misappropriation”—could have been erroneous because there was no evidence or even any allegation that the plaintiff misappropriated assets.
In circumstances virtually identical to the purported incident for which the female pharmacist was terminated, a male pharmacist was neither questioned about nor disciplined for the second fraudulent prescription filled by the technician, even though his initials were on the prescription, he was on duty at the time it was filled, the prescription appeared suspicious on its face, and the incident had occurred only a few weeks, rather than 18 months, before the plaintiff’s termination. The evidence indicated that the store’s investigation of the second fraudulent prescription was limited to questioning the plaintiff about it and thereafter asking the technician whether she had written it.
The pharmacy claimed that its decision to investigate only the plaintiff and none of the male pharmacists regarding the fraudulent prescriptions is “legally irrelevant, and cannot support an inference of discrimination.” The pharmacy asserted that it did not investigate or discipline the male pharmacist on duty when the tech wrote the second fraudulent prescription because it had no reason to suspect the male pharmacist had engaged in wrongdoing. This argument was considered meritless because the evidence showed that the pharmacy questioned the female pharmacist about both the prescription the technician wrote when the female pharmacist was on duty and the one written when the male pharmacist was on duty, but did not question the male pharmacist about either prescription. Given the evidence of the fraudulent prescription with the male pharmacist’s initials, the pharmacy should have had as much reason to suspect that the male pharmacist was engaged in wrongdoing as it did to suspect the female pharmacist.
Notwithstanding the proffered reason that the female pharmacist was terminated for leaving the pharmacy area unattended in October 2002, at that time she was a staff pharmacist and not the pharmacy manager legally responsible for seeing that the pharmacy was secure. Moreover, terminating her employment for a single policy infraction did not comport with the corporation’s stated policy of progressive discipline, with employees first “coached” about proper procedures, then suspended, and then, in extreme circumstances, terminated from employment.
Perhaps even more telling, there was evidence that Ms. Haddad’s termination had been planned in advance. Her termination notice was originally dated on the day before the interview, and the district supervisor testified that he told the regional manager the day before that he intended to interview and then terminate the pharmacist on the following day. In addition, without the female pharmacist’s prior knowledge, the male pharmacist was registered with the Board of Pharmacy to become the manager of record 3 days prior to her termination.
There was also evidence of other incidents in which male pharmacists were not disciplined for far more serious infractions of pharmacy policies, or even for actions that violated state and federal law. For instance, a videotape from a surveillance camera showed the technician placing drugs in her purse while a male pharmacist on duty was standing near her. The store policy prohibited bringing purses into the pharmacy area. That male pharmacist, who remained employed by the pharmacy at the time of trial, testified that he was not questioned or disciplined about the incident. In August 2003, the pharmacy discovered that another male pharmacist had been writing prescriptions for himself for a Schedule II narcotic. A district manager instructed that pharmacist to have a prescription written by his physician, and no disciplinary action was taken against him for these forged prescriptions. That pharmacist was also later observed taking drugs from the pharmacy. His employment was not terminated for this conduct.
Most difficult for the pharmacy to justify, the undisputed evidence showed that the female pharmacist’s base pay was significantly less per hour than all the male pharmacy managers in the region. In addition, despite her repeated requests for the additional hourly pay and bonus that the male pharmacy managers received, the pharmacy failed to pay her the bonus until just before her termination.
Damages
The jury awarded $17,700 in special damages, $125,000 in emotional distress damages, back pay of $95,000, and front pay of $733,307 based on an estimated 19 years of continued employment if not for the wrongful termination. On appeal, the pharmacy contested only the front pay award. It argued that a) the front pay award is excessive and speculative; b) the judge failed to consider evidence of the pharmacist’s future earning ability; and c) a 19-year award is too long. The jury also awarded $1 million in punitive damages. However, the trial court judge reversed the punitive damages award and entered a verdict for the compensatory amount. The pharmacist appealed for reinstatement of this award.
Front pay is intended to compensate a plaintiff for the loss of future earnings caused by the defendant’s discriminatory conduct. The judge properly instructed the jury that front pay damages must be “proven with reasonable certainty;” that in awarding such damages they should consider the “amount of future earnings, including salary, bonuses and benefits that the plaintiff would have received but for the defendant’s unlawful discrimination;” that they should not overcompensate the plaintiff; and that the plaintiff had a duty to mitigate her damages by reasonable efforts to secure other employment. The judge also correctly instructed the jury to consider and weigh five factors in determining the amount of any front pay award: 1) the amount of earnings, including salary and benefits, that the plaintiff would have received between the time of trial and the plaintiff’s projected retirement date; 2) the plaintiff’s probable retirement date; 3) the amount of earnings that the plaintiff would probably have received from another employer until her retirement, which would reduce any front pay award; 4) the availability of other employment opportunities; and 5) the possibility of future wage increases and inflation. The judge further instructed that any award of front pay damages must be based on the present discounted value of the income stream, and he provided an explanation of how that value was to be calculated. Notably, the female pharmacist hired a PhD economist as an expert to testify about front pay damages, and the pharmacy did not offer any contradictory testimony or evidence.
Ms. Haddad testified to her difficulty in obtaining a new job. After more than 6 months of seeking employment, she eventually secured a position at a small pharmacy that was owned by a relative of her in-laws with less advancement potential, significantly fewer benefits, and fewer available hours. She remained in that position at the time of trial; the evidence suggested that the plaintiff intended to stay in the Pittsfield area and to continue working at her present type of job as a pharmacist. Her tendency to job stability was supported by evidence that she had worked at the defendant pharmacy for 10 years. While the pharmacy emphasizes that the pharmacist’s hourly pay in the new job is higher, it ignores the fact that the pharmacist earns less money than she did before termination of her employment because fewer hours are available in her new position than had been available to her during her employment with the defendant.
The pharmacy contends that a 19-year award is excessive. However, the award of lost income of 19 years is consistent with the pharmacist’s anticipated retirement age of 65 years. Based on her 10-year employment history with the pharmacy, her testimony that she had planned to continue working there for the remainder of her career, and with the limited number of pharmacies in the area around Pittsfield, the jury permissibly could have concluded that an award of 19 years was appropriate.
As to the punitive damages, the pharmacy claimed there was insufficient evidence to justify the award. Concluding that the pharmacy had presented no evidence that it knowingly or intentionally violated the antidiscrimination statute,7 and that there was no evidence that its conduct was otherwise outrageous, evil in motive, or could be viewed as exhibiting a reckless indifference for the pharmacist’s rights, the judge reversed the jury’s finding on the punitive damages award.
Under existing Massachusetts law, punitive damages may be awarded for conduct that is outrageous, because of the defendant’s evil motive or his reckless indifference to the rights of others. These cases have held that if a defendant knows that it has acted unlawfully by interfering with the legally protected rights of the plaintiff, such “reckless indifference” to the rights of others constituted conduct warranting “condemnation and deterrence,” sufficient to support an award of punitive damages. That the defendant acted with the knowledge that it was interfering with the plaintiff’s right to be free of unlawful discrimination, however, has been only one circumstance warranting an award of punitive damages. If the defendant’s act was otherwise outrageous, egregious, evil in motive, or undertaken with reckless indifference to the rights of others, an award of punitive damages has been allowed.
There was evidence that the pharmacy had policies prohibiting harassment, from which a jury could infer that the pharmacy was aware that gender discrimination was not legally permitted. In addition, there was sufficient evidence of reprehensible or recklessly indifferent conduct to support an award of punitive damages. The pharmacy maintained policies prohibiting harassment and “inappropriate conduct.” The pharmacy training manuals provided for “coaching” on “harassment/inappropriate conduct.” The pharmacy considered “serious harassment/inappropriate conduct” to be “gross misconduct” justifying immediate termination without the possibility of future rehire.
The pharmacy contended that the award of $1 million in punitive damages was excessive. In considering whether an award of punitive damages is excessive in a gender discrimination case, Massachusetts law requires consideration of three factors: 1) the degree of reprehensibility of the defendant’s conduct; 2) the ratio of the punitive damage award to the actual harm inflicted on the plaintiff; and 3) a comparison of the punitive damages award and the civil or criminal penalties that could be imposed for comparable misconduct. An award of punitive damages also requires a heightened finding beyond mere liability and also beyond a knowing violation of the statute. Punitive damages may be awarded where the defendant’s conduct is outrageous or egregious. Punitive damages are warranted where the conduct is so offensive that it justifies punishment and not merely compensation. In making an award of punitive damages, the jury must find that the award is needed to deter such behavior toward the class of which the plaintiff is a member, or that the defendant’s behavior is so egregious that it warrants public condemnation and punishment. According to this court, the jury was justified in concluding that the pharmacy’s pattern of unequal treatment of male and female pharmacists was outrageous and reprehensible. For these reasons, the punitive damage award for Ms. Haddad was reinstated.
Conclusion
In this day and age, there is no reason to differentiate compensation or enforcement of policies based on gender alone. As the court found, the facts of this case were so egregious as to be without any reasonable explanation. This conduct not only justified compensatory damages due the female pharmacist for her disparate treatment but punitive damages to deter such discrimination in the future. It took a long time against formidable odds for this pharmacist to be vindicated. In the end, maybe this case will make pharmacy a better profession for all its practitioners, male and female alike.
Author’s Note: At the time this article was submitted for publication, the defendant corporation had not paid the judgment. According to the plaintiff’s attorney, Richard E. Fradette, RPh, JD, the company was haggling over the payment of pre- and postjudgment interest and attorney fees. According to his estimate, those fees are accumulating at approximately $900 per day that the judgment remains unpaid. This is just further evidence of how difficult it is to bring and prevail in cases like this one.
REFERENCES
1. Eisenhower DD. Quotations Book. http://quotationsbook.com/
2. Haddad v. Wal-Mart, Slip Op No SJC-10261 (October 5, 2009), 2009 Mass Lexis 654.
3. The trial was discussed in an earlier column. Vivian JC. David victorious over Goliath. US Pharm. 2007;32(10):58-60. www.uspharmacist.com/content/
4. The final judgment estimate was provided by Richard E. Fradette, RPh, JD, counsel for the plaintiff, in an e-mail to the author dated October 29, 2009.
5. GL c 112, §§ 24, 39; 247 Code Mass Regs §§ 6.01, 6.02, 6.07.
6. Pretext. Law Dictionary. www.law-dictionary.org/
7. GL c 151B.
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