Regina Petty Obtained Defense Verdict in Jury Trial Pregnancy Discrimination Case

Regina A. Petty, a partner in the San Diego office of Fisher & Phillips LLP, obtained a defense verdict in a jury trial of a pregnancy discrimination case. The plaintiff claimed that her pregnancy was a motivating reason to include her in a layoff of 13 employees. The plaintiff was a commission outside sales representative for a technology products company with more than 100 employees. The company’s primary customers were public school districts and universities in Southern California. The plaintiff started working for the defendant on December 23, 2009 and was laid off on February 26, 2010.

The company experienced an abrupt decline in revenues in the first quarter of 2010 at the time of the California state budget crisis. Working with the company’s female controller, the male president and two male vice presidents analyzed budget forecasts to determine the necessary cost cutting to achieve a profitable quarter. Profitability was necessary to satisfy the company’s loans and maintain performance bonding capacity. The president and two vice presidents took pay cuts. On January 12, 2010 the managers determined a reduction-in-force was necessary and created the first layoff list that day. The plaintiff was on the original list. From January 12 to January 26, the layoff list was reconsidered and revised. However, the plaintiff’s name never came off the list.

The layoff list was finalized on January 26. One of the vice presidents learned of the plaintiff’s pregnancy on January 29 when he made a sales call with the home-based sales rep. When discussing the pregnancy, the plaintiff described the vice president’s tone of voice and demeanor as negative, but could not identify anything specific to support this conclusion. This was the plaintiff’s second child and the vice president mentioned that the expectant inside sales rep was uncertain about returning to work after the birth of her second child.

The plaintiff challenged the credibility of the company’s claim of a severe, unanticipated business slowdown so soon after her hiring. The plaintiff also contended that after January 29 she was denied access to a sales database, had accounts taken from her, had appointments cancelled and was given the cold shoulder by the vice president at a training meeting. The company refuted these claims and established that he company was barely profitable in the first quarter even after the savings from the layoffs, pay cuts and a large vendor rebate. Without the reduction-in-force, the company’s income in 2010 would have been half of the 2009 income. The company also presented evidence that it consistently supported work schedule flexibility and approved all requests to work from home or have reduced schedules for child rearing and family medical needs. Furthermore, a female outside sales rep earned commissions in 2010 that made her the highest paid employee at the company in a year in which she was on pregnancy leave.

Plaintiff was laid-off on February 26 along with a male sales rep who started at the company in November 2009. The plaintiff claimed that when she was notified of her layoff by the same vice president who learned of her pregnancy on January 29, he stated that the company could not afford to invest in her because of the pregnancy and uncertainty about whether she would return to work. The vice president denied that he made this statement. At her deposition, plaintiff testified that the only time the vice president mentioned her pregnancy was on January 29.

The plaintiff sought economic, noneconomic and punitive damages for the discharge. Her compensation plan provided for a salary guarantee annualized at $70,000.00 for the first six months and then a recoverable draw against commissions annualized at $65,000.00. She claimed more than $500,000.00 in past and future lost earnings. Although she started a new sales job in October 2010, plaintiff contended that she would have earned more money with the defendant’s company. Plaintiff did not seek a specific amount for damages for emotional distress.

The jury was comprised of eight women and four men. After a 6-day trial in the Orange County Superior Court, the jury deliberated for three and one-half hours to return a defense verdict.