Costco Hit with Unanimous Verdict in Disability Discrimination Case

SAN FRANCISCO, CA – May 15, 2026 – A federal jury has unanimously found Costco Wholesale Corporation liable for disability discrimination, ordering the retail giant to pay $200,000 in damages to a former employee. The verdict, delivered in the U.S. District Court for the Northern District of California, concludes a contentious legal battle and sends a potent message to employers about their legal and ethical obligations to workers with disabilities.

The case centered on Aaron Talamantes, a probationary employee who alleged the company failed to accommodate his known disabilities and ultimately terminated his employment. The 12-0 jury decision in favor of Talamantes marks a significant victory for employee rights advocates and places a spotlight on the often-hidden struggles of workers with conditions like PTSD and anxiety. The financial penalty for Costco is expected to grow substantially, as the awarded damages do not include the significant attorneys' fees the company will likely be ordered to pay.

A Plea for Accommodation Met with Dismissal

The dispute began shortly after Aaron Talamantes was hired at a Costco location. According to the lawsuit, Talamantes informed his managers that he lived with Post-Traumatic Stress Disorder (PTSD), anxiety, and physical limitations from a prior ankle injury that required surgical hardware. He requested what his attorneys described as reasonable accommodations: the ability to take short breaks if he experienced a PTSD-related panic attack and restrictions on heavy lifting to avoid aggravating his ankle injury.

Costco's defense claimed the company was unaware of Talamantes' PTSD until after the decision to terminate him had been made. However, the plaintiff's case painted a different picture, one of managerial misinterpretation and a failure to engage in a legally required dialogue.

A critical point of contention was a doctor's note Talamantes provided, which stated, "No lifting. No heavy lifting." Court documents revealed that his managers interpreted this note to mean Talamantes was incapable of lifting anything at all, not even a paper receipt. Based on this interpretation, they placed him on an immediate, unpaid leave of absence.

Approximately one week later, Talamantes secured a second doctor's note that cleared him to return to work without any restrictions. That same note, however, also mentioned that his ankle injury was still interfering with his ability to work. According to the plaintiff's counsel, Costco never followed up with Talamantes to clarify the seemingly contradictory information or to discuss potential accommodations, a step that is central to the legally mandated "interactive process."

The Path to Trial: A Judge's Skepticism

Before the case ever reached a jury, it faced a crucial test in the form of a motion for summary judgment filed by Costco—a legal maneuver to have the case dismissed without a full trial. In a pre-trial ruling, Chief U.S. District Judge Richard Seeborg denied the majority of Costco's motion, signaling that the plaintiff's claims had significant merit.

Judge Seeborg found that "substantial factual disputes" existed that a jury needed to decide. These disputes included whether Costco managers were truly unaware of Talamantes' disabilities, whether the company had failed its duty to engage in a good-faith interactive process, and whether the company's official reasons for his termination were merely a pretext for discrimination. While the judge granted Costco's motion regarding punitive damages, his decision to allow the core discrimination claims to proceed was a pivotal moment in the litigation.

"This was an extraordinarily difficult case because disability discrimination often happens behind closed doors, through dismissive comments, ignored accommodation requests, and efforts to discredit vulnerable employees," said Sam Setyan, founder of Setyan Law and one of the lead attorneys for Talamantes. "Our client showed tremendous courage throughout this process and deserved to be treated with dignity and respect, not mocked or pushed aside after asking for help."

The case, Talamantes v. Costco Wholesale Corporation, Case No. 24-cv-00789, highlights the challenges employees face in proving discrimination, which often relies on subtle actions and inactions rather than overt statements.

A Resounding Verdict and the Financial Fallout

The unanimous 12-0 verdict in favor of Talamantes represents a complete validation of his claims in the eyes of the jury. The $200,000 award for damages is intended to compensate him for the harm caused by the company's actions. However, the final bill for Costco will be much higher.

Under federal law, prevailing plaintiffs in discrimination cases are typically entitled to have their attorneys' fees paid by the defendant. In complex, multi-year litigation like this, legal fees can easily run into the hundreds of thousands of dollars, potentially equaling or even exceeding the damage award itself. The plaintiff's legal team, which included Setyan Law, APC. and Ratner Molineaux, LLP, has stated that these fees are expected to "substantially increase Costco's total financial exposure." As of this report, Costco has not issued a public statement regarding the verdict.

A Wake-Up Call for Corporate America

Legal experts and employee advocates view this verdict as more than just a single loss for a major corporation; they see it as a powerful affirmation of disability rights and a stern warning to all employers. The case underscores the stringent requirements of both the federal Americans with Disabilities Act (ADA) and California's even more protective Fair Employment and Housing Act (FEHA).

Both laws require employers not only to refrain from discrimination but to proactively provide "reasonable accommodations" and engage in a "timely, good-faith interactive process" to find solutions for employees with disabilities. The jury's decision suggests they found Costco failed on both counts.

"The unanimous verdict sends a clear message that employers cannot ignore disability accommodation laws and expect to escape accountability," Setyan remarked after the trial. He specifically pointed to the implications for businesses operating in the Golden State. "This verdict puts Costco and other large corporations on notice. California law requires employers to take accommodation requests seriously and to engage with workers in good faith. Juries are paying attention when companies fail to do that."

The verdict is particularly relevant in the modern workplace, where awareness of "invisible disabilities" such as PTSD, anxiety, and other mental health conditions is growing. The case serves as a crucial reminder that these conditions are protected under law and require the same level of seriousness and respect from employers as physical ailments. For large corporations like Costco, which has faced other discrimination lawsuits in the past, this verdict reinforces the significant legal and reputational risks of failing to foster an inclusive and legally compliant workplace culture.