Court Report - Offer to Begin Job Post-Pregnancy Not Discriminatory

Feb 1, 2004

HR Magazine, February 2004 Also: FMLA eligibility; overtime arbitration

[Venturelli v. ARC Community Services Inc., 7th Cir., No. 02-2294, Nov. 26, 2003.]

An offer of employment to begin sometime after the candidate delivered her baby was not unlawful pregnancy discrimination, the 7th U.S. Circuit Court of Appeals decided.

The Pregnancy Discrimination Act of 1978 (PDA) amended Title VII of the Civil Rights Act of 1964, making it illegal for a company to refuse to hire a woman because she is pregnant. Celena Venturelli, a temporary employee, was assigned to work for ARC Community Services of Madison, Wis. On that assignment, Venturelli, several months pregnant, performed well, and ARC hoped to hire her for a full-time position.

Michael Collins, ARC’s comptroller, twice discussed the position with Venturelli during January 2000. He discussed Venturelli’s pregnancy at length and inquired about how she would deal with the responsibilities of a full-time job. He commented that some women changed their attitude about work once they had children.

Venturelli interpreted the comments to mean that ARC did not want to hire pregnant women. However, she did not report the remarks to any other manager. ARC continued to offer her the full-time position, beginning after her child was born.

Venturelli left her temporary job near the end of February—three weeks before her due date. After that, ARC repeatedly tried to contact her about the permanent spot. Venturelli did not return calls and eventually found other employment.

In the meantime, ARC filled the position with other temporary employees, in the continued hope that Venturelli would accept the job. Eventually, ARC hired another woman who was also pregnant at the time. ARC also told the new candidate she could begin the job after her baby was born.

Venturelli filed a complaint with the Equal Employment Opportunity Commission and then sued, accusing ARC of refusing to hire her because she was pregnant. The district court dismissed the complaint, and the 7th Circuit affirmed.

The appellate court reasoned that, although Collins’ comments had offended Venturelli, she had not reported the comments to the hiring decision-makers. Collins was not a hiring decision-maker, so his remarks did not count as direct evidence of discrimination. The court also found that there was no circumstantial evidence that ARC refused to hire Venturelli because she was pregnant.

By Maria Greco Danaher, an attorney with the law firm of Dickie, McCamey & Chilcote in Pittsburgh.

Unauthorized Absence Counts As Service for FMLA Eligibility

[Babcock v. BellSouth Advertising, 4th Cir., No. 02-1791m, Oct. 28, 2003]

An employee on an unauthorized absence that started before, but extended beyond, her one-year service anniversary was covered by the Family and Medical Leave Act (FMLA), and her discharge for unapproved absences was unlawful, the 4th U.S. Circuit Court of Appeals has ruled.

To be eligible for FMLA leave, an employee must be employed for at least 12 months and have worked at least 1,250 hours during that 12-month period.

On June 1, 1999, BellSouth hired Kimberly Babcock as an outside advertising salesperson. In April 2000, Babcock began to experience a variety of health problems that affected her ability to perform her job. In mid-May, Babcock consulted her physician, who recommended a leave.

Babcock promptly told a BellSouth benefits case manager, Polly Hall, about her condition and said she needed to take short-term disability leave. Hall directed Babcock to have her doctor certify the medical reason for the leave.

Babcock started her leave on May 18. Four days later, on May 22, Babcock telephoned her supervisor and reported that her doctor had recommended six weeks’ leave. On May 30, Babcock’s doctor submitted his certification, which included a diagnosis and recommendation. Babcock, believing the six-week leave had been approved, left town on May 30 and did not return until June 9.

While Babcock was away, BellSouth sent two letters informing her that she had been approved for short-term disability leave only through May 27, that she was required to return to work on June 9 and that if she did not do so she could be subject to disciplinary action.

When Babcock returned home on June 9, she telephoned Hall and requested additional leave time. Hall advised Babcock that as of May 19, when Babcock went out on short-term disability, she had not accrued sufficient service time to be eligible for FMLA leave.

Babcock did not return to work. BellSouth terminated her employment on June 14 due to “misconduct consisting of unexcused absence.” Babcock sued under the FMLA. A jury found in her favor, and BellSouth appealed.

The sole issue on appeal was whether Babcock had been employed for at least 12 months as of the date her leave began. The 4th Circuit concluded that: “In the employment context, ‘leave’ means ‘an authorized absence or vacation from duty or employment.’”

The court reasoned that Babcock was not on “leave” during the period May 27 through June 9 because BellSouth had treated this absence as unauthorized, explaining that: “An employee cannot be both on leave and on an unexcused absence at the same time.”

Between May 19 and May 27, Babcock’s absence was covered by BellSouth’s short-term disability policy and therefore authorized, even though Babcock was not yet an “eligible employee” under the FMLA. Between May 28 and June 9, Babcock remained an active employee, despite being on an unexcused absence. By June 9 -- when she requested additional time off -- she had been employed for over a year and had become FMLA-eligible.

By Lawrence Peikes, an attorney with the law firm of Wiggin & Dana LLP in Stamford, Conn.


Arbitrator Had Power To Decide Arbitrability of Federal Overtime Claim

[Bailey v. Ameriquest Mortgage Co., 8th Cir., No. 02-1444, Oct. 14, 2003.]

An employment arbitration agreement that gave the arbitrator power to decide whether the case was subject to arbitration, as well as to decide the extent of the arbitrator’s own authority, was enforceable despite appearing to conflict with the employees’ rights under the Fair Labor Standards Act (FLSA), the 8th U.S. Circuit Court of Appeals recently held.

Account executives at Ameriquest Mortgage Co. filed suit under the FLSA, claiming that they had not been paid overtime for working more than 40 hours per week. Ameriquest moved to compel arbitration pursuant to its standard-form arbitration agreement signed by each account executive.

The trial court denied Ameriquest’s motion, relying on decisions from other circuits. Ameriquest appealed to the 8th Circuit, which reversed the trial court’s decision.

On a motion to compel arbitration, a court’s review is limited to determining whether there is a valid agreement to arbitrate and whether the dispute at issue is within the agreement’s scope.

The account executives’ FLSA claims were covered by the arbitration agreement, the court concluded, because the Supreme Court had upheld the arbitrability of federal age discrimination claims, and the age discrimination statute borrowed its remedial provisions from the FLSA.

The account executives claimed that the agreement was void because it was presented on a take-it-or-leave-it basis. However, the court determined that the agreement clearly acknowledged that the employees had discussed its terms with an attorney to the extent that they wished to do so. Thus, there was no evidence of fraud or overwhelming economic power.

The 8th Circuit reasoned that the district court’s decision was contrary to its own controlling precedent for two reasons. First, the agreement gave the arbitrator power to resolve any issues regarding the extent of the arbitrator’s procedural and remedial authority. If the agreement’s procedural and remedial limitations were inconsistent with federal statutory rights, the arbitrator also had the authority to enforce statutory rights.

Second, when an agreement to arbitrate expressly provides that the arbitrator is to decide arbitrability issues, then the arbitrator—not the court—must address those issues. For these reasons, the court concluded, the account executives were compelled to arbitrate their claims.

By Katherine M. Miller, an attorney with Spencer Fane Britt & Browne LLP in Kansas City, Mo.


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