Costco Sued Again by Employee Who Won $420,000

LOS ANGELES -- Two months after Costco was ordered to pay $420,000 to a gay and HIV-positive employee who was subjected to a hostile work environment, the man sued the warehouse store chain again Tuesday, claiming he has not yet been given his job back.

Juan I. Valera of Twentynine Palms alleges in his Los Angeles Superior Court lawsuit that Costco's failure to reinstate him as a photo manager is an act of retaliation because of the jury award and because of his sexual orientation.

David D. Kadue, an attorney for Costco, declined to comment on the new case, but Costco attorneys claim in court papers that Valera has turned down other job opportunities with the company.

On Dec. 3, a jury found that Valera endured a hostile work environment at the Inglewood warehouse and awarded him $420,000. The jury, which did not include any gay members, rejected his claims of sexual orientation discrimination, that Costco failed to provide accommodations for his needs and that the company acted with malice.

On Feb. 11, Judge Maureen Duffy-Lewis directed Costco to pay Valera's lawyer, Leo J. Terrell, $471,240 in attorneys' fees, plus another $39,540 in costs. Terrell was entitled to attorneys' fees because the case involved discrimination.

Terrell said Valera is unemployed and has no health benefits.

Valera, 45, filed the first lawsuit in October 2006. According to Terrell, after more than 20 years at Costco, everything changed for his client when a new general manager, John Weaver, arrived at the Inglewood location in 2005 and casually used the word "queers" in a statement.


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Valera took a leave of absence because of the stress, and when he returned asked the assistant general manager to protect him from further insensitive remarks, Terrell said. A day later, his work load was doubled and his pay was cut, according to Terrell.

Valera was forced to take a second continued stress leave and was demoted to cashier, Terrell said. He also eventually was stripped of his benefits, according to his attorney.

In May 2006, the woman who replaced him as photo manager, Elaine Ponce, filmed what was supposed to be a training video that depicted fellow Costco employee Kenneth Ellison mimicking Valera and calling him Auntie Juan, Terrell said.

The tape begins with Ellison stating to another employee, Carlos Taylor: "Carlos, I have a dilemma; next Friday is my Auntie Juan's bar mitzvah. He is a transsexual."

Terrell told jurors there was no doubt the co-workers were making fun of Valera in the video.

But defense attorneys maintained the three workers made the video while acting out a scenario in which a Costco employee asks for time off on short notice, and that the unlikely names and scenario were meant to convey the weak reasoning of the person making the late request.

Valera lost his benefits under Costco policy because he was gone for six months on one of his leaves of absence, according to the defense lawyers.

After Weaver was shown the video, he demoted Ponce and one of the other employees involved, according to the defense lawyers.

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