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Long history of pregnancy bias favors employees on FMLA interference, retaliation claims

By Sheryl Allenson, J.D.

Allegations that an employer kept data projecting when women might become pregnant and that the employees were demoted and, in one instance, fired after announcing they were pregnant overcame a motion to dismiss the employees’ FMLA interference claim, ruled a federal district court in New York. Although one employee claimed that she was constructively discharged, there was a nexus between that claim and her interference claim that sustained the cause of action. Moreover, the employees adequately pleaded a claim for FMLA retaliation (Stoler v Institute for Integrative Nutrition, November 18, 2013, Sweet, D).

The three female plaintiffs worked for the Institute for Integrative Nutrition (IIN) and each became pregnant during their tenure. They claimed that their employer considered the possibility that employees would have children in making employment decisions. According to the employees, the employer created an evaluation form asking managers to determine an employee’s “future plans,” including any “maternity” plans. The founder and director of the program asked that a maternity projection chart be created. This included every female’s (and most employees were female) age, marital status, and maternal status to determine the likelihood that an employee would have a child. No male employees were included on the chart. The employees were listed as likely or fairly likely to have children within the next few years.

Executive employee. One of the employees had an advanced degree and a career history that included a fellowship and placement in other managerial positions. When she joined IIN, she was an internal consultant, but she was soon promoted to a marketing director and a year later was promoted again into the employer’s executive team. Shortly thereafter, she was placed in charge of two departments. But two months later the employee told the company’s owner she was pregnant and planned to take maternity leave. Things went downhill. The company’s owner told her that “in his experience, ‘[w]omen’s priorities shift when they become mothers’” and that she should consider that. He also told her that her position might not be available when she returned, but that was an “excellent performer and should not be concerned about her job.”

Three months later, the employee submitted FMLA paperwork and started her leave three months after that. She was scheduled to return 12 weeks later but asked for a two-week extension, which the employer granted. However, about a month before she was initially scheduled to return, the employee asked about her position, and the owner equivocated. The day before she was scheduled to return, he told her there were too many managers, he needed to figure out a new role, and he directed her to stay home. After that, she was demoted two levels below her previous position and did not manage employees anymore. The owner told her she could prove herself to move back up the ranks.

As part of her demotion, the employee lost her private office. She complained to the company’s HR manager, the COO, and the in-house counsel about her demotion. Downplaying these complaints, the owner told the other individuals, essentially, that she was experiencing culture shock after her maternity leave. He later posted a job listing for the employee’s former position. In response, the employee filed her initial complaint and also complained to the company’s president that her demotion after her leave was a result of discrimination and retaliation. Instead of embracing these concerns, the president chastised her. And a few months later, she was fired, allegedly because her position was eliminated. Although the employee was later offered a much more junior position, meanwhile, her computer access was turned off, her security access was taken away, and she was escorted from the building. She responded with an email that the job offer was not made in good fail and asked to be reinstated to her pre-maternity leave position, which the employer refused.

Marketing manager. The second employee had more than 10 years of experience in marketing and PR, and started working with IIN as a marketing manager in November 2011. Almost a year later, she told the owner, HR and the company’s CEO that she was pregnant and would need FMLA leave. A few weeks later, the owner met with her (with a coworker present) and told the employee that he “never met a new mom that didn’t underestimate the sleep, time, exhaustion from a new baby.” He told her to consider whether it was “worth it” and also said he needed to protect himself because her performance could decline. The employee responded, in writing, that she wanted to stay with the company, and that her work capacity was not and would not be diminished. She specifically said she planned to return to her position, reporting to the owner and the company’s new CEO.

But the employee believed her employer started looking for reasons to terminate her and falsely criticized her work. A month after she gave notice about her need for FMLA, the owner told her staff that she was no longer in charge of marketing. He claimed she was “spread too thin” and could not manage her duties; threatened to reduce her pay; and reduced her managerial responsibilities, assigning them instead to two junior employees who did not have children and were not pregnant. Later, the employer posted a job posting for a new marketing director describing the employee’s former duties. The employee was terminated 10 days before she was to start her maternity leave.

Announcement of marriage. Three months after the third employee announced she was engaged, the first employee recommended to the owner that she be promoted, but the owner declined, stating that the engaged employee was “getting married, and her head was in another place.” Instead, he promoted a more junior employee who was listed on the company’s maternity projection chart as “not likely” to have a child within five years.

The following year, the owner told this employee that if she made certain cuts, she would receive a specific raise. While the first employee was on leave, he asked the third employee to serve as manager of student services and told her she would keep that position when the first employee returned. The owner praised the third employee, and she was considered a top manager in August of 2012. Midway through that month, however, the third employee told the owner she was pregnant, that she was committed to her work, and that her commitment would not change. In response, the owner said there had been “conversations on whether to retain her.” He equivocated on whether the employee would still have a job available. The owner then met with her to discuss purported issues with her listening skills and, two weeks later, reduced her role and took her off the management team. She was replaced by an unmarried woman with no children. She was later taken off one of her three projects and received a lower than promised pay increase. After the third employee started her FMLA leave, she sent an email acknowledging that she had been constructively discharged. She cited the allegations already set forth as the basis of her conclusion.

Interference claim. In April 2013, the employees filed charges with the EEOC alleging gender and pregnancy discrimination and retaliation in violation of Title VII. In-house counsel met with staff, acknowledged the suit, but denied the allegations. He said that employees “who did not have it in their hearts” to work for IIN should step forward and IIN would structure a mutually beneficial exit agreement. The employees filed an amended class-action complaint alleging, among other claims FMLA interference, FMLA retaliation and retaliation under Title VII and state law. The employer moved to dismiss.

History of interference. As an initial matter, the court found that the employees alleged “a history of the Defendants’ interfering with employees’ FMLA rights.” Evaluating each of the employee’s claims separately, the court ruled that the employer was not entitled to dismissal of the employees’ FMLA interference claims. The court rehashed the allegations spelled out by the employees, concluding that they adequately pleaded a cause of action.

As to the first employee, the court rejected the employer’s argument that she did not specifically request FMLA leave; an employee need not use that precise language to ignite the protections of the Act. Nor did she lose FMLA protection by extending her leave by two weeks, because the employer did not explain that her rights would be affected. According to the court, FMLA coverage applies to a plaintiff who has taken, with the employer’s permission, a leave greater than 12 weeks.

Date eligible. Although the defendants claimed that the second employee was not eligible for FMLA leave, they used the wrong measuring stick. Here, the employer suggested that she was not a covered employee because she had not worked for the defendants for 12 months when she requested leave. But the proper marker for eligibility determination was the date she was going to start leave, the court explained. She had would have worked for the company 12 months at that time but never got the chance, because she was terminated 10 days before her FMLA leave was to start. This temporal proximity was sufficient to show interference to overcome the motion to dismiss.

Constructive discharge. The third employee’s interference claim was also plausible. Although constructive discharge was generally brought as a separate claim, here the employee pleaded adequate facts to demonstrate that she was constructively discharged and as a result, that the employer interfered with her FMLA rights.

FMLA retaliation. Each employee also stated a claim for FMLA retaliation, the court concluded. All employees engaged in protected activity of some sort, they were subject to adverse employment actions, and there was causation between the two. Accordingly, the employer’s motion to dismiss this claim was denied.

Title VII. Turning to the employees’ Title VII and state law retaliation claims, the court had mixed reviews. Both the first and the third employees complained of and opposed the discrimination that they and other women were subject to. The second employee did not engage in Title VII-protected activity until after the amended complaint was filed, the court concluded. Thus, the employer was entitled to a motion to dismiss the Title VII and state law claim as to the second employee only. The claim as it related to the first and third employees advanced.