Thinking About Terminating A Pregnant Employee? Here’s A Cautionary Tale

By Latika Sharma and Stacy Hunter

Most employers are aware that discrimination lawsuits are risky and expensive. A recent case, Lopez v. Bimbo Bakeries, serves as a reminder of just how expensive those cases can be, particularly if the terminated employee can garner a jury’s sympathy.

Recipe for Disaster
Lopez, a single mother of two, worked at Bimbo as a route sales representative. She transported baked goods on 15-pound trays that were stacked on wheeled racks in her truck. The design of the truck and the racks allowed her to load and unload the trays without forcing her to climb in and out of the truck. Lopez became pregnant and was diagnosed with diabetes. Lopez’s perinatal nurse provided her with a certification describing her work restrictions, which included occasionally lifting items ranging from 11 to 20 pounds, taking 15 to 20 minute breaks every two hours, and refraining from climbing. If modified work was not available, Lopez would be unable to work for the duration of her pregnancy. Lopez gave her certification to Laura Thompson-McCann, Bimbo’s HR Manager. Without consulting anyone else, Thompson-McCann told Lopez to go home immediately because Lopez was unable to perform her job duties as required. Thompson-McCann then determined that Bimbo did not have any available positions that could accommodate Lopez’s restrictions, despite Bimbo’s interim work program for employees with industrial injuries. Thompson-McCann refused to allow Lopez to return to her former position or any other Bimbo position, even though Lopez’s nurse assured her that Lopez could perform her job duties. Lopez filed for unemployment and Thompson-McCann responded by sending a letter to Lopez demanding that she confirm her resignation within 48 hours. When Lopez did not respond, Thompson-McCann determined that Lopez had resigned. Lopez sued, claiming gender and pregnancy discrimination. Following a jury trial, Lopez was awarded $340,700 in compensatory damages, $2 million in punitive damages, and over $1 million in attorneys’ fees.

Why Punitive Damages?
A corporate employer may be liable for punitive damages if a managing agent of the corporation acts with fraud, oppression or malice. A managing agent is defined as an employee who exercises substantial independent authority and judgment over decisions that ultimately determine corporate policy. Punitive damages were awarded to Lopez because the jury found that Thompson-McCann was a managing agent and that her actions were fraudulent and oppressive. The jury determined that Thompson-McCain violated the law when she terminated Lopez because of her pregnancy, and that she then attempted to conceal that wrongful act by claiming that Lopez had resigned. If the jury determines that an employer is liable for punitive damages, the amount of punitive damages must then be determined. The amount of punitive damages is based on the reprehensibility of the employer’s conduct and is designed to punish the employer for its wrongful acts. Because Bimbo’s assets were valued at $826 million and its actions were highly reprehensible, the jury determined that $2 million in punitive damages was appropriate.

Why Attorney’s Fees?
In most employment cases, the trial court will award attorneys’ fees to a prevailing plaintiff. Attorneys’ fees are awarded to ensure that the employee is not forced to bear the financial burden of litigation in order to vindicate her statutory rights. In determining the appropriate amount of attorneys’ fees to award, the Court will consider the number of hours spent by the attorney multiplied by a reasonable hourly rate. The court may then multiply that amount by a factor designed to reward the attorney for the risk incurred in taking a case in which he will receive nothing if he loses.

What This Means For You
To avoid falling into the same trap as Bimbo, you should ensure that your managing agents understand their legal obligations. When the managing agent is a human resources professional, she must understand the complex interplay between the ADA, FMLA and California’s FEHA and PDL. Here, Thompson-McCann made one mistake after another. She failed to engage in the interactive process, failed to determine whether the employee could perform her duties with a reasonable accommodation, failed to determine whether an alternative interim position was available even though company policy allowed for it, and failed to determine whether an extended leave of absence would be an appropriate accommodation. Any one of these failures would have resulted in liability for the employer. Together, they cost the employer a lot of dough.