Settlement FAQ

Frequently Asked Questions about the Costco Gender Class Action Lawsuit Settlement

Click the Question link to jump to the Answer.

Questions

Basic Information About the Lawsuit

Class Membership and 2014 Class Notice

Summary of Settlement Terms

Claims Process for Money

Free Legal Representation in the Claims Process

Answers

Basic Information About the Lawsuit

1. What is this lawsuit about? – This class action lawsuit, known as Ellis v. Costco Wholesale Corp., No. 04-3341 EMC (N.D. Cal.), charged that Costco Wholesale Corporation unlawfully discriminated against female employees based on their gender by failing to promote them to Assistant General Manager (AGM) and General Manager (GM) positions. The lawsuit sought money damages, including lost wages, for women who were denied these promotions because of their gender dating back to January 3, 2002. The lawsuit also sought changes in some of Costco’s policies and practices. The case was brought in 2004 as a class action by three women who sued not only for themselves, but also on behalf of all other women with similar legal claims and interests. The federal district judge in the Northern District of California ruled in 2012 that the case could proceed as a class action. On May 27, 2014, the judge granted final approval for the class settlement.

2. What is the current status of this lawsuit? – After nearly ten years of litigation, including two appeals, the parties agreed to settle the case. The settlement terms are explained below. The proposed Settlement Agreement was presented to Federal District Judge Edward M. Chen. After class members were notified of the settlement and presented with an opportunity to be heard, on May 27, 2014, the Court granted final approval of the settlement, finding that it was fair, reasonable, and adequate in all respects. The Settlement Agreement and Judge Chen’s Order are posted on this website, along with other important documents from the lawsuit.

3. Who are the Named Plaintiffs in this lawsuit? – The women who brought this case are Shirley “Rae” Ellis, Leah Horstman, and Elaine Sasaki. Ms. Ellis was formerly an Assistant General Manager at Costco warehouses in the Midwest and in Colorado. Ms. Horstman worked for Costco from 1981 to 2004. She was a Senior Staff manager at Costco warehouses in Southern California. Ms. Sasaki was hired by Costco in 1985, and is currently an Assistant General Manager in Costco’s Fresno, California warehouse. Judge Chen found Ms. Ellis, Ms. Horstman and Ms. Sasaki to be adequate representatives of the class and certified them as the class representatives.

4. Who are the lawyers representing the class? – The Court has appointed lawyers to represent you and other Class Members as “Class Counsel.” They are:

  • Impact Fund, a nonprofit legal foundation, (Jocelyn D. Larkin, Robert Schug, and Meredith Johnson); www.impactfund.org
  • Lieff Cabraser Heimann & Bernstein, LLP, (Kelly M. Dermody, Daniel Hutchinson, and Lisa Cisneros); www.lieffcabraser.com
  • Davis, Cowell & Bowe, LLP, (Elizabeth A. Lawrence and Sarah Varela); www.daviscowellandbowe.com
  • Lewis, Feinberg, Lee, Renaker & Jackson, P.C., (Bill Lann Lee, Lindsay Nako and Magdalena Guadalupe); www.lewisfeinberg.com

Class Membership and 2014 Class Notice

5. Am I a member of the class? – You are a member of the class if (1) you are a current female Costco employee employed at any U.S. Costco warehouse, or a former Costco employee who worked at any U.S. Costco warehouse at any time since January 3, 2002, and (2) you have held the position of Senior Staff Manager or Assistant General Manager. Some women who have already excluded themselves from the lawsuit (called “opting out”) are not Class Members and are not part of the settlement.

6. Who is not a member of the class? – You are not a member of the class if you don’t meet the definition here, or if you opted out of the class in response to a notice that you received from the Court in December 2012. If you are not a class member, your rights are not affected by this settlement and you are not eligible to participate in the Monetary Claims Process described below.

7. What should I do if I’m not sure of my status? – The deadline to file settlement claims has now passed. If you are a member of the class and have filed a settlement claim, you can contact the attorneys handling the case by calling (510) 845-3473 x308.

8. I received a Claim Guide. What is this Guide? – On May 27, 2014, Judge Chen granted final approval of the settlement reached between the parties. Accordingly, Class Counsel have sent all class members information to alert them to the court’s final approval order, the opening of the claims process, and related details. The Claim Guide explains the next steps in the claims process, including the July 26, 2014 deadline to submit the initial claim form, and the recommended deadline of July 7, 2014 to speak with an attorney to start the process of preparing the claim form.

9. I did not receive a notice or Claim Guide. What should I do? – The deadline to file settlement claims has now passed. If you are a member of the class and have filed a settlement claim, you can contact the attorneys handling the case by calling (510) 845-3473 x308.

Summary of Settlement Terms

10. What are the terms of the settlement? – Costco will make certain changes to its promotion process for AGM and GM positions. In addition, the settlement establishes a claims process in which class members may file a claim and an arbitrator will decide if the class member was denied an AGM or GM promotion because of gender. The settlement creates an $8 million fund from which successful claimants will be paid. The full settlement agreement is posted on this website.

11. What changes to the promotion process will Costco make? – Costco will post AGM job openings and Senior Staff Managers will be able to apply for AGM positions. AGMs will be able to formally register their interest in specific GM positions and Costco will consult the list of those who have registered an interest in that warehouse when it makes a GM selection. Registering an interest will help ensure that Costco is aware of who is interested in being considered for the promotion. Costco will offer a merchandising training class for current Senior Staff managers who have not received merchandising experience relevant to a promotion to AGM as a way of encouraging acquisition of that experience. Costco will communicate with and train its managers concerning program changes and will submit reports about these changes for two years after they are made. An outside expert will analyze the AGM and GM jobs, evaluate the promotion process for these jobs, and recommend to Costco written selection criteria and tools for the AGM and GM promotion process. Costco will, in good faith, consider changes in its processes for making promotions to AGM and GM.

12. What is the Claims Process? – The Claims Process is described in detail here.

13. What claims are released by the settlement? – A settlement “releases” certain claims, meaning that class members cannot later pursue those same claims on their own. This settlement releases the claims of class members for injunctive relief and money damages for gender discrimination in connection with a failure to promote them to AGM or GM since January 3, 2002.

Claims Process for Money

14. How will the Claims Process for money work? – You may bring a claim that you were denied a specific AGM or GM promotion or promotions because of your gender. An independent arbitrator will consider the information presented by you and by Costco and then decide if you were denied a promotion to AGM or GM because of your gender. If the arbitrator decides in your favor, you will receive compensation from the Settlement Fund.

15. What are the different ways to make a claim? – There are two ways to make a claim: (1) you can make a written claim, which will be reviewed by the neutral arbitrator, or (2) you can make a claim in person before a neutral arbitrator.

16. Can I make a claim confidentially? – If you are a current employee, then you also may choose to make a written claim confidentially so that your current AGM and GM (if you are a Senior Staff Manager) and your GM and Regional Operating Manager (if you are an AGM), will not know you are making a claim.

17. How many promotions can I challenge? – Each claimant can challenge at least one specific promotion that she did not receive. She may challenge up to two additional promotions depending on her tenure and whether she meets certain experience requirements.

18. What is a Claim by Written Submission and how will it be decided? – We will prepare a summary of your experience, using evidence from witnesses or documents that support your story. Costco will write a response to your written claim, and we will prepare a written response to Costco’s position. The file is then presented to the arbitrator and he or she will make a decision based on the papers. You do not have to appear before the arbitrator or attend any hearings.

19. What is a Claim by Formal Arbitration and how will it be decided? – There will be a hearing before a neutral arbitrator at which you will appear. We will represent you and help you to present your story with documents and witnesses. Costco can also present witnesses and documents to support its position at the arbitration. The arbitrations will be held in selected cities in your region of the country.

20. If I win my claim, how is my award calculated? – The amount that may be awarded to you if a neutral arbitrator finds you were denied the promotion because of your gender differs based on the type of claim you choose to file, the promotion that you should have received, the date your should have received the promotion, and the total amount of awards. The amount of the award is to compensate you for lost salary, bonuses and the value of restricted stock units plus interest. The award is subject to these first caps:

a confidential written claim for AGM $25,000
a written claim for AGM $150,000
an arbitration claim for AGM $250,000
a confidential written claim for GM $50,000
a written claim for GM $300,000
an arbitration claim for GM $600,000

By way of example, if you proved in an arbitration hearing that your claim for an AGM promotion and your damages were $200,000, you would receive this full amount. If your damages were $275,000, they would be capped at $250,000. However, in some circumstances, your award may be increased to the full $275,000 described here. And in certain circumstances, your award could be decreased, as described here.

21. When and how would I receive additional money above the first cap? – If the $8 million settlement fund is not completely awarded by successful claims under these first caps, and your economic damages are greater than these first caps, your award may be increased so that you receive the full amount of your damages up to a second cap:

a confidential written claim for AGM $12,500
a written claim for AGM $100,000
an arbitration for AGM $175,000
a confidential written claim for GM $25,000
a written claim for GM $200,000
an arbitration claim for GM $300,000

By way of example, if you successfully proved in an arbitration hearing that your claim for an AGM promotion and your damages were $300,000, you would receive up to the first cap of $250,000. If the second cap was applied, you would receive an additional $50,000.

This means that the maximum award for a denial of promotion to AGM will range from $25,000 to $425,000, and the maximum award for a denial of promotion to GM will range from $50,000 to $900,000.

22. If I win my claim, when would I receive the payment? – Payments will be made at the completion of the Claims Process, which could take more than a year.

23. Do I get any money if I don’t win my claim? – No.

24. If I file a claim, will everyone find out if I win or lose and how much I got? – No. All outcomes in the claims process (win or lose) will be kept confidential. To participate in the claims process, you will sign an agreement to keep the outcome confidential (with a few exceptions like your spouse or tax advisor). Costco is bound by the same duty to keep the outcomes confidential.

25. What happens if the total of the award amounts is more than $8 million? – If the total amount of successful claims results in award amounts exceeding $8 million, then each successful claimant’s award amount will be reduced pro rata.

26. What happens if the total of the award amounts is less than $8 Million? – If the total of the award amounts does not reach $8 million after the second cap is applied, then the money not allocated to award amounts and certain settlement-related expenses will be donated to the Network of Executive Women, Consumer Products/Retail, to fund scholarships or otherwise assist women pursuing leadership roles in retail management.

27. If I win (or lose) my claim, do I have to resign from my employment with Costco? – No. If you are a current Costco employee and you win (or lose) your claim, you will not be required to resign. As explained below, Costco is prohibited from retaliating against you for making a settlement claim.

28. Can I file a claim if I have been promoted to AGM or GM but I believe that I should have been promoted sooner? – Yes, and if the arbitrator agrees, your recovery will be based on the economic losses you suffered as a result of the delay.

29. Can I file a claim if I signed a statement for Costco in 2006? – Yes. The statement (or “declaration”) solicited by Costco and/or its attorneys in 2006 may not be used against you to limit your remedies and words to the effect that Costco did not engage in gender discrimination are no longer in the record.

30. What if I’m not sure I could prove Costco discriminated against me? – If you are a Class Member, you can speak with Class Counsel about the merits of your claim. The attorneys have information about promotions—the identities and genders of the employees who received them, the work history of those who were promoted, how much you would have been paid if you had been promoted, etc. They can assist you with preparing your claim and represent you in the Claims Process. It is not necessary for you to prove that someone told you that you were not being promoted because you are a woman, or to prove sexist comments were made to you. Most discrimination claims are proven with circumstantial evidence.

31. Is there information available to help me decide which promotion(s) to challenge? – Yes. Class Counsel has information about promotions—the identities and genders of the employees who received them, the work history of those who were promoted, how much you would have been paid if you had been promoted, etc.

32. If Costco did not give me the rotations that I needed to qualify for a promotion, can I still make a claim? – For promotions into AGM, a claimant may show that she was denied the opportunity to rotate into the merchandise manager position, which prevented her from being qualified at the time of the promotion.

33. Do I have to have proof that I asked or applied for a promotion? – No.

34. Can the arbitrator order Costco to promote me? – No, the settlement only provides for money damages, if an arbitrator finds you have been denied a promotion because of your gender.

35. Can Costco retaliate against me for participating in this lawsuit? – No, retaliation is illegal. If you believe that you are subjected to any kind of retaliation in connection with this case or the Claims Process, you should notify Class Counsel. You may choose to also notify your own independent counsel (if you hire one), or use Costco’s Open Door process (if you are a current Costco employee).

36. What’s the deadline for filing a claim? – The deadline to file settlement claims has now passed. If you are a member of the class and have filed a settlement claim, you can contact the attorneys handling the case by calling (510) 845-3473 x308.

37. Where can I find the claim form? – You can access the claim form here.

38. Will it cost me anything to participate in the claims process? – No, whether you win or lose, you will not pay anything. You may need to take a few days away from work if you choose to file a claim through arbitration.

Free Legal Representation in the Claims Process

39. Can I get help deciding whether to file a claim? – Yes.

40. Will I have a lawyer to represent me in the claims process? – If you choose, Class Counsel will represent you. Class Counsel have extensive class action and employment rights experience, including work on some of the largest gender discrimination cases ever brought in the United States.

41. Can I hire my own lawyer? – Yes, you may hire one at your own personal expense. Class Counsel will cooperate and make evidence available for use by a private attorney.

42. How will the lawyers be paid? – If you win your claim, Class Counsel (or your own lawyer) will be entitled to ask that certain fees and costs be paid by Costco. Class Counsel will not ask for any fees to be taken out of your award or from the Settlement Fund. If you hire your own lawyer, you will have to negotiate the terms of payment separately with that lawyer.

43. Can I submit a claim without a lawyer? – Yes, but you won’t be taking advantage of Class Counsel’s experience with the case and the Claims Process.

44. What is the address of the Claims Administrator?Ellis v. Costco Claims, Settlement Services, Inc., Post Office Box 10847, Tallahassee, Florida 32302-2847.

45. What do I do if I want more information? – The deadline to file settlement claims has now passed. If you are a member of the class and have filed a settlement claim, you can contact the attorneys handling the case by calling (510) 845-3473 x308.

46. What if I have other issues regarding my employment at Costco? – This case only involves company-wide claims of gender discrimination involving class members as defined above. If you have other claims, such as denial of overtime or other types of discrimination claims, Class Counsel cannot help you with those claims. Here are some resources you can check into:

  • The National Employment Lawyers Association: 415-296-7629 at www.nela.org
  • The National Employee Rights Institute (NERI) at www.nerinet.org
  • Your local United States Equal Employment Opportunity Commission or state anti-discrimination agency.