7TH CIRCUIT ALLOWS HR DIRECTOR’S COMMENTS IN DISCRIMINATION CASE

John GarnerDMEC News

The United States Court of Appeals for the Seventh Circuit has ruled that comments made by lower-level managers, such as those in human resources, can be admissible as evidence, even if that individual was not the final decisionmaker taking an adverse action. 

Lisa Makowski, an employee of SmithAmundsen, LLC, took leave under the Family Medical Leave Act (FMLA) beginning just before the birth of her child and continuing after the birth. While Makowski was on leave, her supervisors informed her that her position was eliminated as part of an organizational restructuring and terminated her employment. Makowski filed suit against SmithAmundsen, Glen E. Amundsen, and Michael DeLargy, alleging pregnancy discrimination under Title VII of the Civil Rights Act of 1964 (Title VII), as amended by the Pregnancy Discrimination Act (PDA); interference with Makowski’s exercise of her rights under the FMLA; retaliation under the FMLA; and a violation of her right to a bonus under the FMLA. The district court granted summary judgment in favor of the defendants. On appeal, Makowski challenged an evidentiary ruling denying the admission of statements allegedly made by the Human Resources Director.

Makowski was employed as Marketing Director for SmithAmundsen, a law firm, from January 17, 2005, through February 4, 2008. She reported to Glen Amundsen, Chair of the Executive Committee and Marketing Partner, and Michael DeLargy, Chief Operating Officer. During each year of Makowski’s employment with SmithAmundsen, she received an annual salary increase, as well as quarterly discretionary merit bonuses based on individual performance for each quarter of her employment.

In the summer of 2007, Makowski notified SmithAmundsen’s management that she was pregnant and due in December. SmithAmundsen granted Makowski leave under the FMLA. On November 5, 2007, Makowski’s obstetrician placed her on bed rest for the remainder of her pregnancy. With SmithAmundsen’s permission, Makowski worked from home until November 26, 2007, at which point she began FMLA leave. On December 2, 2007, Makowski gave birth.

In January 2008, the Executive Committee, comprised of Amundsen and four other men, conducted its yearly retreat to assess the overall structure of the firm and determine whether staffing changes were necessary. At the retreat, the Executive Committee ratified Amundsen’s recommendation to eliminate Makowski’s position. The Executive Committee charged DeLargy with the task of conferring with outside labor and employment counsel regarding Makowski’s firing.

Molly O’Gara, Director of Human Resources, was responsible for implementing and monitoring SmithAmundsen’s compliance with human resources policies, as well as monitoring the firm’s compliance with anti-discrimination laws. She is consulted regularly regarding decisions to eliminate positions and terminate employees, and considers herself “the boss” with respect to human resources policies and compliance. DeLargy delegated to O’Gara the task of consulting with outside counsel to discuss Makowski’s firing, which she did prior to Makowski’s termination.

On February 4, 2008, while Makowski was on maternity leave, Amundsen and DeLargy terminated her over the telephone, explaining that her position was being eliminated as part of an organizational restructuring. That same day, O’Gara fired the IT Director, Tuan Hoang. Additionally, Amundsen sent an email to all equity and non-equity members of SmithAmundsen informing them of the Executive Committee’s decision to eliminate the IT Director and Director of Marketing positions.

Later that day, Makowski came to the office to retrieve her belongings. As she was leaving, O’Gara met her in the elevator lobby. O’Gara told her that she (Makowski) “was let go because of the fact that [Makowski] was pregnant and took medical leave.” Furthermore, O’Gara “believed that there were [sic] a group of people that were discriminated against because they were pregnant or because they took medical leave” and specifically mentioned a former associate at the firm, as one of the victims of discrimination. O’Gara also advised Makowski that “it might be a good idea to speak with a lawyer [as there] might be a possibility of a class action.” Regarding Hoang, O’Gara said that “they were working to let Tuan [Hoang] go for performance-based reasons,” but because Makowski was pregnant and on FMLA leave, outside counsel suggested labeling both Makowski’s and Hoang’s terminations as part of a reduction in force.

Makowski filed this lawsuit, alleging violations under Title VII, as amended by the PDA, and the FMLA. The defendants moved for summary judgment on all of Makowski’s claims. The district court granted the defendants’ motion with respect to Makowski’s termination. The court first ruled that because O’Gara’s job responsibilities were not related to the decision to terminate Makowski, and because O’Gara was not involved in the decision-making process, O’Gara’s statements concerning Makowski’s termination were not admissible. Without those statements, the court found that Makowski had no evidence of a direct connection between her protected activity and her termination; therefore, her Title VII discrimination claims and FMLA interference and retaliation claims failed.

Makowski contended that the district court erred in excluding O’Gara’s statements to Makowski concerning her termination and in failing to consider other evidence provided by Makowski. Makowski also argued that this evidence created a genuine issue of material fact as to whether Makowski was terminated due to her pregnancy and her taking medical leave.

The 7th Circuit determined that O’Gara’s statements fall under the definition of hearsay and that an exception to the hearsay rule applied because involvement in the process leading up to the employment action at issue is enough to make an employee’s statement admissable.

Next, Makowski argued that the district court erred in granting summary judgment for the defendants on her pregnancy discrimination claim. The PDA amended the definition of gender-based discrimination in Title VII to include discrimination “because of or on the basis of pregnancy, childbirth, or related medical conditions.” Like other Title VII claims, a plaintiff may prove discrimination through either the direct or indirect methods. To survive summary judgment under the direct method, a plaintiff must produce sufficient evidence, either direct or circumstantial, to create a triable issue as to whether pregnancy was a motivating factor in her discharge. Direct evidence is evidence that would prove discriminatory intent without reliance on inference or presumption.

O’Gara’s alleged statements to Makowski, provide direct evidence that pregnancy was a motivating factor in Makowski’s discharge. Although O’Gara denies having made the alleged statements, whether or not she made such admissions is a question for the jury. Accordingly, the 7th Circuit reversed the district court’s grant of summary judgment in favor of the defendants on Makowski’s pregnancy discrimination claim.

Makowski also argued that the district court erred in dismissing her FMLA claims on summary judgment. The district court found that without O’Gara’s statements, Makowski had no direct evidence of discrimination; however, with O’Gara’s statements now admitted they provide the necessary causal connection; therefore, the 7th Circuit reversed the summary judgment for the defendants on Makowski’s FMLA claims.

The case was remanded for proceedings consistent with this opinion.

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