11-14-11; You can’t be too cautious! New 7th Circuit Ruling confirming statements made by a non-decision makers can make a difference!

This case should serve as a reminder to all employers, you can never be too careful! Remember, you cannot prevent litigation 100% of the time, but you can make sure you have the best case possible in settings that could give rise to litigation. You have to be careful of what your team members say, as those statements could come back to haunt you.

Normally, statements made by employees who are not a decision maker in a Title VII suit would be hearsay, not admissible in a court of law, and not an admission. In Makowski v. SmithAmundsen, LLC, et al., the Seventh Circuit Federal Appellate Court found a human resources director's comments about an employee's termination can be considered a party admission, and thereby get around the hearsay classification in settings where that individual is involved in the “process leading up to the decision to terminate.”

In Makowski, Plaintiff Makowski sued her former employer alleging both pregnancy discrimination and violations of the FMLA. Apparently, while Ms. Makowski was on FMLA leave following birth of her child, her employer decided to terminate her employment. The COO of the company was directed to consult with outside counsel about the potential termination but the officer delegated that task to the company’s HR Director.

Defendant SmithAmundsen later terminated only two persons – Makowski and one other individual in another department. SmithAmundsen alleged the positions were being eliminated due to organizational restructuring. When Makowski came back to the office to collect her personal effects at a later date, the HR Director involved in the outside counsel consultation allegedly told Makowski her termination was due to the pregnancy and because she took her FMLA leave following the birth. The HR Director also allegedly told Makowski her termination was labeled a reduction in force based on the outside counsel's recommendation.

The Federal District Court initially ruled the HR Director's statement was inadmissible hearsay because the Director's "job responsibilities were not related to the decision to terminate Makowski, and because [the Director] was not involved in the decision-making process." The Seventh Circuit reversed, finding although the HR Director was not involved in the decision to terminate, "she was involved in the decision-making process leading up to that action due to her consultation with outside counsel regarding the termination and her job duties, which include ensuring the [employer's] compliance with federal anti-discrimination laws." The Seventh Circuit stressed the "involvement in the process leading up to the employment action at issue is enough to make an employee's statement an admission."

What does this mean for employers? The number one goal is to only terminate people for legitimate reasons. Keep your files updated, keep your personnel reviews honest, and keep a record of all infractions in case you need them later. After that, make sure the people you trust to help you come to these types of decisions understand the need for discretion, and know the old adage “loose lips sink ships.” Again – we stress, termination should be for valid cause, but even in such settings, a stray comment can give rise to a litigated claim, and juries often feel an emotional connection to a plaintiff in situations where they see a pregnant woman getting what looks like a very bad deal.  

This article was researched and written by our resident Blog Administrator, Arik D. Hetue, J. D. who can be reached at ahetue@keefe-law.com. Please feel free to direct any questions to him, or post them on our award winning blog.