Colwell alleged that Rick Kautz, the pharmacy manager at the Mesa, Arizona store where she worked, repeatedly called her a “terrorist” and told her she “possessed a terrorist tongue.” After Colwell complained to management in November 2017, Kautz was issued an Employee Counseling Notice for unprofessional conduct, but Costco’s investigation concluded there had been no comments directed at her because of her race or national origin.
Colwell subsequently alleged that Kautz significantly reduced her shifts, including reassigning a confirmed Thursday shift to a “floating” pharmacist and stopping her regular Monday shifts. She filed an EEOC charge alleging discrimination and retaliation, and the agency issued a determination letter finding reasonable cause to believe Costco violated Title VII.
The court held that the reduction in shifts constituted an adverse employment action for both her discrimination and retaliation claims. The court rejected Costco’s argument that the change was immaterial because Limited Part-Time Pharmacists are not guaranteed a minimum number of hours, noting that Colwell had been regularly scheduled for Monday shifts for nearly a year prior to the abrupt change.
On the issue of pretext, the court ruled that Colwell presented sufficient direct and circumstantial evidence to overcome the “same-actor inference,” which typically arises when the same person hires an employee and later takes adverse action against them. The court found that evidence of Kautz’s discriminatory comments and the temporal proximity between his counseling notice and the shift reductions created a triable issue of fact for a jury.
Regarding punitive damages, the court denied summary judgment, finding a genuine dispute as to whether Costco implemented its anti-harassment policy in good faith. The court noted that while Costco investigated the complaint, it failed to find that Kautz’s conduct violated its policy, which forbids epithets and negative stereotyping, and instead merely counseled him for being “unprofessional.”