Walmart Defamation Lawsuit: $34.7M Verdict Overturned

The Walmart defamation lawsuit brought by former truck driver Jesus “Jesse” Fonseca produced a $34.7 million jury verdict in November 2024, and then lost it entirely seven months later when the trial court set the award aside. On June 27, 2025, a San Bernardino County judge granted Walmart’s motion for judgment notwithstanding the verdict, ruling that Fonseca’s defamation claim was legally barred because the alleged defamation and his firing were inseparable.¹

What Walmart Accused Fonseca Of

Fonseca drove for Walmart’s Apple Valley distribution center for 14 years and had appeared in a national Walmart commercial as the face of its trucking operation.² In June 2017, a semi-truck rear-ended his company vehicle during a freeway slowdown, causing a fiery collision.³ His doctors placed him on medical leave with restrictions against lifting more than five to ten pounds, bending, stooping, or driving commercial vehicles.⁴ He filed a workers’ compensation claim.

While Fonseca recovered, Walmart’s third-party workers’ compensation administrator hired private investigators, who filmed him driving a personal RV on a family camping trip and bending over during the outing.² Fonseca had told a nurse case manager about the trip in advance. On January 31, 2018, Walmart officials interrogated him for 20 to 30 minutes and accused him of workers’ compensation fraud.⁵ He maintained that his medical restrictions applied to operating a semi-truck on the job, not to driving a personal vehicle.⁴

Walmart’s ethics department classified the activity as an “integrity violation.” On March 29, 2018, the company fired him for “gross misconduct and integrity.”⁶

How the Jury Reached $34.7 Million

Fonseca’s employment claims were dismissed on summary judgment before trial, leaving only defamation for the jury.¹ The theory was defamation per quod, meaning Fonseca had to prove specific harm from Walmart’s statements rather than rely on inherently damaging language.⁶

The evidence focused on how Walmart reached its fraud conclusion. Fonseca’s attorneys showed that the ethics department had a blanket policy of treating any activity outside an employee’s medical restrictions as “intentional dishonesty,” regardless of whether investigators actually found deceptive intent.² Walmart’s own internal fraud investigator had found Fonseca “credible and honest” and declined to refer the case for criminal prosecution. The ethics department overrode that assessment without interviewing Fonseca or consulting the investigator.⁷

Fonseca testified that being fired for “gross misconduct and integrity” made new employment nearly impossible. Prospective employers asked why he had left Walmart, and disclosing the reason effectively blacklisted him.⁷ His attorneys argued the false accusation was part of a broader Walmart practice of using fraud allegations to push injured drivers back to work early or fire them to cut workers’ compensation costs.⁴

On November 19, 2024, the jury awarded $9.7 million in compensatory damages for economic and noneconomic losses, including mental suffering and loss of enjoyment of life. The next day it added $25 million in punitive damages, bringing the total to $34.7 million.² Walmart called the verdict “outrageous,” said it “does not reflect the straightforward and uncontested facts of this case,” and pledged to “pursue all available remedies.”⁵

Why the Trial Court Threw the Verdict Out

Walmart’s post-trial motion relied on a January 2025 California First District Court of Appeal decision, Hearn v. Pacific Gas and Electric Co. Hearn holds that a fired employee cannot recover defamation damages when two conditions are both met: the defamation claim is based on the same conduct that led to the termination, and the damages sought flow exclusively from losing the job rather than from a separate reputational injury.⁸ The reasoning is that allowing the claim would let employees repackage wrongful termination suits as defamation to sidestep limits on termination damages.

Walmart argued Fonseca’s case fit both conditions. His defamation claim rested on statements Walmart employees made to each other internally during the investigation that led to his firing, and the harm he proved at trial was job loss and the inability to get hired elsewhere because of how the firing was characterized.¹

The trial court agreed. On June 27, 2025, the judge granted judgment notwithstanding the verdict and set aside the full $34.7 million award, finding the claim “nonactionable” under Hearn because the alleged defamation and the termination shared the same underlying conduct and the damages were inseparable from the firing itself.¹ The court did not reach Walmart’s other post-trial arguments.

What This Means for Employees Defamed During a Firing

The outcome turns on a specific California rule, not on whether Walmart’s fraud accusation was true. The jury found the accusation false and punished the company for it. The court then ruled that the law does not permit a defamation claim when the defamatory statements are internal to the termination process and the resulting harm is loss of the job.

The distinction that matters under Hearn is whether the defamation caused reputational harm existing independently of the termination, or whether the two collapse into one injury. Statements made outside the firing process, or harm that reaches beyond the lost job, can still support a claim. In Fonseca’s case, the court found the two inseparable.

As of mid-2025, the jury’s verdict has been fully set aside. Available records do not indicate whether Fonseca has filed an appeal.¹

1
Horvitz & Levy. Fonseca v. Walmart
2
Courthouse News Service. Former Truck Driver Wins $34.7 Million Defamation Verdict Against Walmart
3
The Sacramento Bee. Former Walmart Truck Driver Awarded $34.7 Million by San Bernardino County Jury
4
CBS News. Walmart Defamation Lawsuit Truck Driver $35 Million Jesus Fonseca
5
Mercury News. Former Walmart Truck Driver Awarded $34.7 Million by San Bernardino County Jury
6
Employment Law Weekly. Jury Awards Injured Walmart Truck Driver $34M for Subrosa-Based Discharge
7
FreightWaves. Walmart Driver Wins Defamation Case Against Retailer for Almost $35 Million
8
FindLaw. Hearn v. Pacific Gas and Electric Company