Alleged Comments by HR Director Sufficient to Defeat Company’s Motion for Summary Judgment

Remarks by a law firm’s human resources director could be “direct evidence” of pregnancy discrimination and violation of the FMLA, according to the 7th U.S. District Court of Appeals.  According to the court, such evidence falls outside of the “hearsay” objection that might otherwise keep it from being presented to a jury.  Makowski v. SmithAmundsen LLC, 7th Cir., No. 10-3330, November 9, 2011.

Lisa Makowski was employed as Marketing Director for the SmithAmundsen law firm between January 2005 and her termination in February 2008.  During her employment, Makowski received annual salary increases and discretionary bonuses based on her performance.  In the summer of 2007, Makowski informed the firm’s management that she was pregnant.  She requested, and was granted, leave under the Family and Medical Leave Act.  Between November 5 and November 25, Makowski worked from home with the firm’s permission, as she had been placed on bed rest by her obstetrician.  She began her FMLA leave on November 26, and gave birth on December 2.

In January 2008, the firm’s Executive Committee conducted its firm retreat, at which it annually assessed the overall structure of the firm to determine whether staffing changes were necessary.  At that retreat, the Executive Committee decided to terminate Makowski and to move another individual into the leadership position with the Marketing Department.  After that meeting, the Committee informed the firm’s Human Resources Director, Molly O’Gara, that Makowski didn’t “fit into our culture,” and asked O’Gara to consult with outside counsel to discuss the implementation of Makowski’s firing. 

On February 4, 2008, while Makowski was still on maternity leave, her employment was terminated over the telephone.  In that conversation, Makowski was told that her position was being eliminated as part of an organizational restructuring.  Later that day, Makowski came into the office to pick up her personal belongings. According to Makowski, as she was leaving the office, she was met by O’Gara, who told her that the actual reason for the termination was because of Makowski’s pregnancy and FMLA leave, and that the same thing had happened to several other women employees in the past.  O’Gara allegedly suggested to Makowski that she should speak to a lawyer about a possible class action on the issue.

Makowski filed a lawsuit on December 2, 2008, alleging violations of both the Pregnancy Discrimination Act and the Family and Medical Leave Act, and cited O’Gara’s alleged remarks as direct evidence of discrimination.  The firm moved for summary judgment, and the motion was granted, based on the fact that because O’Gara had not been directly involved in the decision to terminate Makowski, her statements concerning the termination were inadmissible hearsay.  Without those statements, Makowski lacked evidence of the connection between her termination and any discriminatory acts by the firm.

On appeal, the Seventh Circuit reversed that decision.  It found that because O’Gara’s statements concerned a matter within the scope of her duties as HR Director, they fell within an exception to the hearsay rule.  Essentially, that exception means that the agent acting within the scope of his or her employment with the company speaks on behalf of the company and that, therefore, his or her statement is actually a party admission that can be used to support a claimant’s case.  Here, O’Gara’s alleged comments to Makowski fit within the scope of O’Gara’s duties as an HR Director who was involved in the firm’s hirings and firings.  Further, the court pointed out that O’Gara’s discussions with outside counsel at the request of the Executive Committee could actually support an argument that O’Gara was directly involved in the final decision to fire Makowski, since the Committee waited for the counsel’s imprimatur before implementing the termination.

This case sets out an important lesson for employers and underscores the need for training for managers, supervisors, and HR personnel, especially with respect to having the difficult conversations needed for disciplinary and termination meetings.  The importance of the use of “talking points” for disciplinary and termination meetings cannot be overstressed.  Any remarks outside of pre-established, pre-rehearsed talking points could be used – as in this case – to argue to the jury that the “official” reason given for the adverse action was simply a pretext for discrimination.