Ellis v. Costco Wholesale Corporation
Filing
797
ORDER re 796 Business Center issue filed by Elaine Sasaki, Shirley "Rae" Ellis, Leah Horstman. Signed by Judge Edward M. Chen on 9/17/14. (bpf, COURT STAFF) (Filed on 9/17/2014)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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SHIRLEY "RAE" ELLIS, et al.,
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Plaintiffs,
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v.
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COSTCO WHOLESALE CORPORATION
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Defendant.
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Case No. C04 3341 EMC
[PROPOSED] ORDER REGARDING
BUSINESS CENTERS ISSUE
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ORDER
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1. This court granted final approval of the class action settlement in this action on May
27, 2014 (Class Settlement Agreement), notice of settlement having been provided
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to the class. By the terms of the agreement, class members had until July 26, 2014 to
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submit a monetary claim, which will be determined by an arbitrator in subsequent
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proceedings.
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2. The parties recently identified a dispute concerning whether Costco’s Business
Center facilities, of which there are nine (9) in the U.S., are “warehouses” within the
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meaning of the Class Definition, which was incorporated into the Class Settlement
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Agreement.
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3. Women who worked exclusively within the Business Center facilities did not receive
the Class Notice approved by the Court on February 12, 2014 nor did they receive
information about the Monetary Claims Process in advance of the July 26, 2014
deadline for filing claims.
4. The dispute raises a number of issues concerning the interpretation and
implementation of the Class Settlement Agreement. These issues include:
a. Whether a Costco Business Center facility is a “Costco warehouse” within the
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meaning of the Class Definition and the Settlement (see Section 1.2.3);
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b. Whether women who worked exclusively within Business Center facilities
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during the Class Period (estimated to be 12) fall within the Class Definition;
c. Whether women who worked exclusively within Business Center facilities
should now receive some form of class notice and the opportunity to
participate in the claims process;
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[PROPOSED] ORDER RE: BUSINESS DELIVERY
Case No.: C04 3341 EMC
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d. Whether promotions to AGM and GM received by men in Business Center
facilities during the Class Period (estimated to be 20) should be included in
the list of promotions that may be challenged (Agreement, Section 5.2.3);
e. Whether promotions to AGM and GM in Business Center facilities during the
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Class Period should be subject to challenge by women who worked in
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Business Center facilities;
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f. Whether promotions to AGM and GM in Business Center facilities during the
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Class Period should be subject to challenge by class members who did not
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work in Business Center facilities; and
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g. How to ensure that any resolution of these issues does not unduly delay the
claims process.
5. The parties agree that the Class Settlement Agreement does not, by its express
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terms, address whether the Business Center facilities should be included within the
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scope of the Agreement and the related issues identified above.
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6. The parties have been unable to resolve the matter informally and have submitted a
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joint letter setting forth their respective positions. The parties have asked this Court
to resolve the issue.
GOOD CAUSE APPEARING, this Court finds and orders as follows:
a. The nine (9) Business Centers are “warehouses” within the meaning of the
Class Definition and the Class Settlement Agreement. While the Court finds
the issue to be very close, it concludes that this interpretation is consistent
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[PROPOSED] ORDER RE: BUSINESS DELIVERY
Case No.: C04 3341 EMC
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with the facts of the underlying case and the purpose of the Class Settlement
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Agreement.
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b. Within ten days of this order, Costco will provide to the Class Administrator
the names and addresses of the 12 women who worked in the Business
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Center facilities in Senior Staff or Assistant General Manager positions during
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the class period (“Business Center Class Members”);
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c. Within seven days of the receipt of the list, the Class Administrator will send
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a modified Notice of Class Settlement (see Attachment A) to the Business
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Center Class Members;
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d. Within ten days of this order, Costco will provide to Class Counsel a list of the
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20 AGM and GM promotions within the Class Period in the Business Center
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facilities, including the warehouse number, location, the date of the
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promotion, the position, and the person selected;
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e. Upon request, Costco will provide to Class Counsel (or outside Counsel for an
individual Business Center Class Member) the previously agreed‐upon
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personnel records for persons selected to the promotions identified in
Paragraph d;
f. The Business Center Class Members will have 60 days from the date that the
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modified Class Notice is postmarked to opt out of the settlement or to file a
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claim in the monetary claims process;
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g. The Business Center Class Members may challenge the promotions identified
in Paragraph 6d above, or any promotion on the list identified in Section
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[PROPOSED] ORDER RE: BUSINESS DELIVERY
Case No.: C04 3341 EMC
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5.2.3 of the Class Settlement Agreement not already challenged by other
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claimants;
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h. Any Business Center Class Member who does not opt out or file a claim in the
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monetary claims process will be deemed to have released her claims
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consistent with Section 6 of the Class Settlement Agreement;
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/s/ Jocelyn D. Larkin
Jocelyn D. Larkin
Counsel for Plaintiffs
R NIA
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Judge E
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Approved as to Form
M. Chen
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ORDERED
Judge Edward
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d M. Ch
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IT IS SO
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ROVED
APP
Honorable Edward M. Chen
UNITED STATES DISTRICT COURT
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9/17/14
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Dated:
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IT IS SO ORDERED.
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Center Class Members.
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This agreement creates no rights for any persons other than the Business
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/s/ David Kadue
David Kadue
Counsel for Costco Wholesale Corp.
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[PROPOSED] ORDER RE: BUSINESS DELIVERY
Case No.: C04 3341 EMC
Attachment A
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA
ELLIS V. COSTCO WHOLESALE CORP., NO. 04-3341
If you are a woman and are (or were) employed in a U.S. Costco
Business Center as a Senior Staff Manager or Assistant General
Manager, then a class action settlement could affect your rights.
If you take no action, you will be bound by the settlement. Your rights will be impacted.
The federal court authorized this notice.
Read this notice carefully. This notice explains the lawsuit, the settlement, and your legal rights.
This notice describes a class action settlement that has been approved by the Court, which
provides for certain changes in Costco’s system for promotions to Assistant General Manager
(“AGM”) and for an assessment of possible changes in Costco’s system for promotions to
General Manager (“GM”). (See Section 7)
The settlement, also creates an arbitration claims process in which women may make
claims for economic damages resulting from unlawful denial of promotions because of their
sex. Unless you win your claim, you will not receive any money. The settlement provides a
fund up to $8 million to compensate women who bring successful claims. (See Sections 6 and
8).
The court has not decided whether Costco did anything wrong. But your legal rights may be
affected, and you have a choice to make now:
YOUR LEGAL RIGHTS AND OPTIONS
REMAIN PART OF THE
SETTLEMENT
OPT OUT
DO NOTHING
You can file a claim seeking money in a claims process if you
believe you were unlawfully denied a promotion because of your
sex. An arbitrator will decide if your claim has merit.
If you want to file your own lawsuit against Costco for sex
discrimination for denying you an AGM or GM promotion, or if you
do not want to be bound by this lawsuit, then you should exclude
yourself (“opt-out”) from the settlement.
You can choose not to file a claim or opt-out. You will not receive
any money from the settlement and you will give up your right to
bring an independent lawsuit against Costco for the same claims
made in this case.
These rights and options—and the deadlines to exercise them—are explained in this notice.
Table of Contents
Page
WHAT THIS NOTICE CONTAINS
- 1 -
Basic Information
1.
Why Did I Get This Notice? ..................................................................................... - 1 -
2.
What Is This Lawsuit About? ................................................................................... - 1 -
3.
What Is a Class Action? ............................................................................................ - 1 -
4.
Why Is There a Settlement? ...................................................................................... - 1 -
5.
How Do I Know If I am Part of the Settlement? ...................................................... - 1 -
The Settlement — Essential Terms ......................................................................................... - 2 -
6.
What Are the Terms of the Settlement? .................................................................... - 2 -
Program Changes...................................................................................................................... - 2 -
7.
What Changes Will Costco Make to the AGM and GM Promotion
System? ..................................................................................................................... - 2 -
The Claims Process ................................................................................................................... - 3 -
8.
How Does the Claims Process Work? ...................................................................... - 3 -
9.
How Much Will I Get If I Win?................................................................................ - 3 -
10.
What Happens If I Lose My Claim? ......................................................................... - 4 -
11.
How Does the Claims Process Differ from Having My Own Case in
Federal Court? ........................................................................................................... - 4 -
12.
Do I Need to Decide Now Whether to File a Claim or Which Kind of
Claim to File?............................................................................................................ - 4 -
13.
Can I Get Help in Deciding What Kind of Claim to File? Will I Have a
Lawyer in the Claims Process? ................................................................................. - 4 -
14.
Will My Job or Future Promotions Be Affected If I Participate in the
Claims Process? ........................................................................................................ - 5 -
15.
Can I File a Claim If I Have Been Promoted to AGM or GM But I
Believe That I Should Have Been Promoted Sooner? .............................................. - 5 -
16.
If I Win, Then Can The Arbitrator Order Costco to Promote Me?........................... - 5 -
17.
Can I Make a Confidential Claim? ........................................................................... - 5 -
18.
If I Win My Claim, Then When Would I Get My Payment? ................................... - 5 -
19.
If I Win My Claim, Then Will Everyone Know How Much I Got? Or,
If I Lose My Claim, Will Everyone Know that I Lost? ............................................ - 6 -
20.
Under What Circumstances Can My Award Be Increased or
Decreased? ................................................................................................................ - 6 -
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Table of Contents (continued)
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21.
What Happens If The Total of The Award Amounts Is Less Than $8
Million? ..................................................................................................................... - 6 -
22.
What Claims Are Released by the Settlement? ........................................................ - 6 -
Named Plaintiffs ........................................................................................................................ - 7 -
23.
What Can the Three Named Plaintiffs Get Under the Settlement? ......................... - 7 -
The Lawyers Representing You .............................................................................................. - 7 -
24.
Do I have a Lawyer in this Case? ............................................................................. - 7 -
25.
What Have the Lawyers Been Paid? ......................................................................... - 7 -
Opting Out of the Settlement ................................................................................................... - 7 -
26.
Who Should Opt Out of the Class? ........................................................................... - 7 -
27.
How Do I Opt Out of the Class? ............................................................................... - 8 -
If You Do Nothing ..................................................................................................................... - 8 -
28.
What Happens if I Do Nothing at All? ..................................................................... - 8 -
Getting More Information ....................................................................................................... - 8 -
29.
How Do I Get More Information? ............................................................................ - 8 -
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BASIC INFORMATION
1. Why Did I Get This Notice?
Costco’s records show that you now work for Costco as either a Senior Staff Manager or an AGM in
a U.S. Business Center, or have worked in one of those positions at some time on or after January 3,
2002.
This notice advises you of a settlement of this class action lawsuit, and about your options. There will
be a claims process and arbitrators will decide who, if anyone, was unlawfully denied an AGM
promotion or a GM promotion because of her sex and entitled to compensation.
2. What Is This Lawsuit About?
This lawsuit claims that Costco unlawfully discriminated against female employees based on their
sex, by denying them opportunities for promotion to AGM or GM.
Costco denies it did anything wrong and no court has found that Costco did anything wrong. Costco
retains its right to defend itself against any claim brought against it.
3. What Is a Class Action?
In a class action, one or more people, called Named Plaintiffs (in this case, Shirley “Rae” Ellis, Leah
Horstman, and Elaine Sasaki), bring a lawsuit on behalf of people who a court finds have similar
claims. These people, considered members of the same Class, are called Class Members. One court
resolves the case for all Class Members, except for those who exclude themselves from the Class.
4. Why Is There a Settlement?
The Court did not decide in favor of Plaintiffs or in favor of Costco. Instead, both sides agreed to
a settlement to avoid a court trial, to provide a process to re-evaluate and change, as appropriate, the
promotion process, and to create a way to resolve money claims through a relatively quick
arbitration process.
5. How Do I Know If I am Part of the Settlement?
The class is defined as all current or former female Costco employees employed at any U.S. Costco
warehouse at any time on or after January 3, 2002 who have ever been Senior Staff Managers or
Assistant General Managers. Costco “warehouse” includes Business Centers.
Some women who have already excluded themselves from the lawsuit (called “opting out”) are not
Class Members and are not part of the settlement.
[- 1 -]
If you aren’t sure about your status, then you can contact Class Counsel at 1-866-501-2300 or
through the website address below or the Class Administrator at the address identified in Section 27
below.
THE SETTLEMENT — ESSENTIAL TERMS
6. What Are the Terms of the Settlement?
The settlement provides a process to evaluate and implement program changes and an arbitration
process to resolve claims of discriminatory denial of promotions.
Program Changes - Costco will implement job posting for AGM vacancies and will permit AGMs
to formally register interest in specific GM positions. Costco will, in good faith, consider changes in
its processes for making promotions to AGM and GM.
Claims Process for Money - If you bring a claim and an arbitrator decides that you were denied an
AGM or GM promotion because of your sex, then you will receive compensation. The settlement
would create an $8 million fund, from which any successful claimants would be paid. (For more
description, see Sections 17-21).
PROGRAM CHANGES
7. What Changes Will Costco Make to the AGM and GM Promotion System?
(1) An agreed-upon 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.
(2) Costco has agreed to post openings for AGM promotions within the geographic area where
the opening occurs and candidates who meet the posted qualifications will be allowed to
apply for the position.
(3) Costco has agreed to implement a system that will allow AGMs to register an interest in GM
positions in specific warehouses. 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.
(4) Costco will offer a merchandising training class for current Senior Staff managers who have
not received merchandising experience relevant to promotion to AGM as a way of
encouraging acquisition of that experience.
(5) Costco will communicate with and train its managers concerning any program changes.
(6) Costco will submit reports about these changes for two years after they are made.
[- 2 -]
These changes will apply to both women and men applying for promotions to AGM and GM.
THE CLAIMS PROCESS
8. How Does the Claims Process Work?
You have two different ways to make a claim if you choose to make one. You can make a written
claim (called a Claim by Written Submission) or you can make a claim in person before a neutral
arbitrator (called a Claim by Formal Arbitration).
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.
Every Claimant can challenge at least one specific promotion that she did not receive. She may
challenge up to two additional promotions if she meets certain experience requirements stated in
Section 5.3 of the Settlement Agreement.
The arbitrator will be given information about why you believe that you were interested and
qualified for promotion to a specific AGM or GM position and why you believe the decision not to
promote you to that position was a result of unlawful sex discrimination. Costco, too, may submit
information to the arbitrator that Costco believes shows that your sex was not a factor in the decision
not to promote you to that position. The arbitrator will decide whether or not you were denied
promotion because of your sex.
If you choose, Class Counsel will represent you. If you win your claim, then Class Counsel will be
entitled to ask that certain fees and costs be paid by Costco. You may instead hire your own lawyer
and, if you win your claim, your lawyer will be entitled to ask that certain fees and costs be paid by
Costco.
Whether you win or lose, you will not be charged any fee for participating in the claims process.
9. How Much Will I Get If I Win?
If you win, you will receive your actual losses up to a cap: lost salary, bonus, and the value of
restricted stock units plus interest. Under certain circumstances, your award amount may be
increased up to a second cap or decreased, which is explained in Section 20.
Type of Claim
Written
Written
Arbitration
Denial of Promotion into
Which Position
AGM
GM
AGM
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Actual Damages Up to First
Cap
$150,000 cap
$300,000 cap
$250,000 cap
Arbitration
GM
$600,000 cap
Lower award amounts apply if you make a confidential claim. (See Section 17.)
The settlement does not provide for an award of emotional distress or punitive damages.
10. What Happens If I Lose My Claim?
You will receive no money if the arbitrator finds that your claim is not valid.
11. How Does the Claims Process Differ from Having My Own Case in Federal
Court?
In the Claims Process, an arbitrator rather than a judge will decide your claim. Class Counsel will
represent you without charge. Claims decided by an arbitrator often are resolved more quickly than
claims decided by a judge or jury. Your wage loss is capped, as explained in Sections 9, 17 and 20.
You cannot seek emotional distress or punitive damages or an order giving you a promotion. If you
choose to make an arbitration claim, there are limits on how long the arbitration lasts, what
discovery tools your lawyer can use to get information, and what evidence can be used to support
your claim. The number of promotions you may challenge is explained in Section 8. The outcome
of the Claims Process is confidential. Neither side can appeal the result.
If you brought your own lawsuit in federal court, then your case would be decided by a jury or a
judge. You would have to find a lawyer to represent you. The limits on discovery tools and
evidence that apply in the Claims Process would not apply in the same way in court. You would be
entitled to seek emotional distress and punitive damages (up to a cap of $300,000) in addition to
your wage loss and an order promoting you. The number of promotions you could challenge would
not be subject to any limits and would depend on the evidence. The court proceedings and the
outcome would be public. Either side could appeal the result.
12. Do I Need to Decide Now Whether to File a Claim or Which Kind of Claim to
File?
Yes. The deadline is _______, 2014.
13. Can I Get Help in Deciding What Kind of Claim to File? Will I Have a Lawyer
in the Claims Process?
You can consult with Class Counsel and decide if you will file a claim, and what kind of claim to
file. There is information available about the past promotions, and who was selected, that will assist
you in making a decision. There is no charge to you for consulting with the lawyers to decide
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whether to file a claim, or for preparing your claim. If you do decide to file a claim, Class Counsel
will represent you through all stages of the Claims Process at no charge to you. You also can choose
to hire your own lawyer.
14. Will My Job or Future Promotions Be Affected If I Participate in the Claims
Process?
No. Costco supports the right of Class Members who believe they have been subject to sex
discrimination in promotion to have their claims determined by a neutral arbitrator in the Claims
Process. Retaliation is illegal. If you believe that you are being subjected to any kind of retaliation in
connection with the case or the Claims Process, then you can notify Class Counsel, notify your own
independent counsel, or use Costco’s Open Door process (if you are a current Costco employee).
15. 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. If you win your claim, your economic losses would be based on the time period before you
received the promotion.
16. If I Win, Then Can The Arbitrator Order Costco to Promote Me?
No. The Claims Process provides for only money damages. By staying in the case and not opting
out, you give up your right to have a court order that you be promoted to AGM or GM.
17. Can I Make a Confidential Claim?
If you are a current Costco employee, then you can choose to make a written claim on a
confidential basis so that the manager directly above you, and his or her direct manager, will not
know about your claim. If you choose to make a confidential claim, then the maximum that you
can receive if you are successful is:
Type of Claim
Written/Confidential
Written/Confidential
Denial of Promotion into
Which Position
AGM
GM
Actual Damages Up to
Cap
$25,000 cap
$50,000 cap
Under certain circumstances, where Costco takes the position that it would be unfair for the claim
to be heard on a confidential basis, Costco may ask the arbitrator to remove the confidentiality. If
the arbitrator removes the confidentiality, then you will have the right to change your claim to
non-confidential or to withdraw it.
18. If I Win My Claim, Then When Would I Get My Payment?
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Payments will be made at the completion of the Claims Process, which may be more than a year
after the Court approves the settlement.
19. If I Win My Claim, Then Will Everyone Know How Much I Got? Or, If I Lose
My Claim, Will Everyone Know that I Lost?
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). The agreement will explain the legal and financial consequences if
you do not keep the outcome confidential.
Costco is bound by the same duty to keep the outcomes confidential.
20. Under What Circumstances Can My Award Be Increased or Decreased?
If the total amount of successful claims results in award amounts of less than $8 million, then the
award amounts will be increased as follows. Any Claimant whose actual award amount exceeded the
first cap (see Section 9) will get the rest of her award amount, subject to a second cap.
Type of Claim
Written Confidential
Written Confidential
Written
Written
Arbitration
Arbitration
Denial of Promotion
into Which Position
AGM
GM
AGM
GM
AGM
GM
Actual Damages Over First Cap
Up to Additional Second Cap
$12,500
$25,000
$100,000 cap
$200,000 cap
$175,000 cap
$300,000 cap
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.
21. 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, then all of the money not allocated to
award amounts and certain settlement-related expenses will be donated to Network for Executive
Women, Consumer Products/Retail to fund scholarships or otherwise assist women pursuing
leadership roles in retail management.
22. What Claims Are Released by the Settlement?
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All class members who do not opt out of the settlement are giving up (also called “releasing”) their
rights to sue Costco for money damages for gender discrimination in connection with a failure to
promote them to AGM or GM since January 3, 2002. Class members give up these rights whether or
not they choose to make a claim in the Claims Process. Class members who are current employees
also give up their individual rights to seek certain injunctive relief, i.e., a court order that requires an
employer to change its promotion practices.
NAMED PLAINTIFFS
23. What Did the Three Named Plaintiffs Get Under the Settlement?
The three Named Plaintiffs may make a promotion claim in the Claims Process or may choose a trial
before the Court.
They also received a service payment of $10,000 each, paid from the settlement fund. A service
payment is not for damages for discrimination, but is a payment for services the Named Plaintiffs
have provided to the Class in obtaining the settlement. The Court approved this payment.
THE LAWYERS REPRESENTING YOU
24. Do I have a Lawyer in this Case?
The Court appointed the law firms of the Impact Fund; Lewis, Feinberg, Lee, Renaker & Jackson,
PC; Lieff Cabraser, Heimann & Bernstein, LLP; Davis, Cowell & Bowe, LLP; and Altshuler
Berzon, LLP to represent you and other Class Members. Together, the lawyers are called Class
Counsel.
25. What Have the Lawyers Been Paid?
The Court approved an award of attorneys’ fees and costs, paid by Costco, in the amount of
$4,583,959.64 for the services that they have provided to the Class. They also received fees for
anticipated services in monitoring and administering the settlement in the amount of $300,000.
Attorneys’ fees and costs will not be paid from the settlement fund.
OPTING OUT OF THE SETTLEMENT
26. Who Should Opt Out of the Class?
If (1) you want to keep the right to sue or continue to sue Costco on your own for sex discrimination
in unlawfully denying an AGM or GM promotion, or (2) you do not want to be bound by the
settlement of this lawsuit, then you should take steps to get out of the settlement. This is called
“opting out.”
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27. How Do I Opt Out of the Class?
To opt out of the settlement, you must complete the Opt Out form included with this notice. Be sure
to include your name, address, telephone number, and your signature. You must mail your
completed Opt Out form postmarked no later than_________, 2014 to:
Class Administrator
Ellis v. Costco Wholesale Corp. Opt Outs
Post Office Box 10847
Tallahassee, Florida 32302-2847
You cannot opt out by phone or email.
If you ask to opt out, then you cannot participate in the Claims Process, and you cannot object to the
settlement. You will not be legally bound by anything that happens in this lawsuit.
You cannot exclude yourself from the program changes called for by the settlement.
IF YOU DO NOTHING
28. What Happens if I Do Nothing at All?
If you do nothing, then you’ll be not entitled to file a claim in the claims process.
You will also be releasing your right to bring your own independent lawsuit, continue with such a
lawsuit, or be part of any other lawsuit against Costco about the legal issues in this case.
GETTING MORE INFORMATION
29. How Do I Get More Information?
This notice summarizes the settlement. More details are in the Settlement Agreement. You can get a
copy by contacting Class Counsel identified below, by visiting the case website,
www.GenderClassActionAgainstCostco.com, or by calling Costco Human Resources to leave a
message at extension 6095 or by sending an email to bweber@Costco.com.
Do not contact the Court for information.
COURT
Clerk of the Court
U.S. District Court for
the Northern District
CLASS COUNSEL
Jocelyn Larkin
The Impact Fund
125 University Avenue
[- 8 -]
COSTCO COUNSEL
David D. Kadue
Seyfarth Shaw LLP
2029 Century Park East
of California
450 Golden Gate Ave.
San Francisco, CA
94102-3489
Suite 102
Berkeley, CA 94710
www.GenderClassActionAgainstCostco.com
1-866-501-2300
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18035278v.3
Suite 3500
Los Angeles, CA 90067
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