Costco is still on the hook for a $250,000 jury verdict for an employee who was stalked at work by a customer, the U.S. Court of Appeals for the Seventh Circuit said Sept. 10.

The warehouse juggernaut tried to argue that its employee, Dawn Suppo, was only touched on her face and wrists and only had to endure unwanted, overly friendly conversations from the customer she alleged was a stalker. “Yet Costco’s argument implies a position inconsistent with our case...