Judge Orders Walmart to Rehire Worker With Down Syndrome, Provide More Than $50,000 in Back Pay

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  • A federal judge ordered Walmart to rehire Marlo Spaeth, an employee with Down syndrome who was abruptly fired after working in a Wisconsin Supercenter for nearly 16 years.
  • The judge, however, denied the U.S. Equal Employment Opportunity Commission's request for tighter scrutiny of Walmart, the nation's largest private employer.
  • The judge's ruling can be appealed by both sides.

A federal judge has ordered Walmart to immediately rehire a woman with Down syndrome and give her more than $50,000 in back pay after she prevailed in a disability discrimination lawsuit related to her firing from a Wisconsin store.

But the judge denied a request to force Walmart to take other actions for the next five years in light of how it treated the woman, Marlo Spaeth.

Walmart told CNBC on Wednesday that it would comply with the order to give Spaeth her job back.

But a spokesman said the company has not decided whether to appeal the ruling on back pay, along with $300,000 in jury damages.

"We take supporting all our associates seriously and routinely accommodate thousands with disabilities every year," Walmart said.

The judge's order is the latest development in a more than five-year court battle between the U.S. Equal Employment Opportunity Commission and Walmart, the nation's largest private employer. The federal agency sued Walmart on Spaeth's behalf, after the retailer refused to accommodate her disability and fired her after nearly 16 years of working at one of its Supercenters.

Judge rejects additional steps

As part of the lawsuit, the EEOC had asked Judge William Griesbach to require the big-box retailer to add training for managers about the Americans with Disabilities Act.

The EEOC also had wanted Walmart to notify all employees about a jury's verdict in Spaeth's favor, their legal rights and their ability to contact the federal agency to report violations.

The EEOC had cited similar discrimination lawsuits against Walmart, arguing that the company's actions against Spaeth are part of a pattern.

Griesbach in his Feb. 22 ruling denying the requests said that most of the EEOC's requests are "directives that Walmart obey the law."

The judge wrote: "The substantial verdict against Walmart and the publicity it generated serve as strong deterrents against any repeat of the conduct at issue in this case."

Griesbach also said it will "create a strong incentive for Walmart to ensure that requests for reasonable accommodations are adequately addressed without court oversight of Walmart's administration and enforcement of its policies and procedures."

An EEOC attorney, Justin Mulaire, declined to say whether the agency will appeal Griesbach's refusal to force Walmart to take additional steps the agency wanted.

The ruling came about seven months after a Wisconsin federal court jury found that Walmart violated the law when it changed Spaeth's working hours and refused to accommodate her disability.

The jury awarded Spaeth more than $125 million in damages for the disability discrimination lawsuit — one of the highest in the federal agency's history for a single victim.

But that award was immediately reduced by the judge to a statutory maximum of $300,000.

In recent weeks, the EEOC and Walmart have argued in court papers over how to calculate the amount of back pay Spaeth would receive to comply with the judge's order.

The two parties still disagree on the amount Walmart must pay Spaeth to offset the tax liability she will incur from the money she is due to receive.

'Nothing short of traumatic'

For more than a decade, Spaeth had tidied store aisles, folded towels and helped customers at the Walmart store in Manitowoc, a city on the shore of Lake Michigan. During that time she regularly received positive performance reviews and raises.

Her work hours were changed in 2014 when the store began using a computerized scheduling system designed to match staffing levels with customer traffic, court records show.

Spaeth struggled to adapt to the new hours and worried that she would miss the bus or her dinnertime. That led to her sometimes leaving early.

Spaeth and her sister, Amy Jo Stevenson, repeatedly asked for her schedule to be changed back.

But Walmart refused, and ultimately fired Spaeth.

Stevenson said in a CNBC interview in July that when her sister lost her job, she lost her sense of purpose. She wouldn't come to the phone or pose for a photo. She buried her head in her hands when a Walmart commercial came on TV.

"It was nothing short of traumatic," Stevenson said in the interview. "It was hard, very difficult to watch."

She filed a complaint with the EEOC, which later led to the lawsuit.

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