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May 24, 1991

VICKI L. SPINA, Plaintiff,

James H. Alesia, United States District Judge.

The opinion of the court was delivered by: ALESIA


 This sex and/or pregnancy discrimination case is before the Court for a decision on the merits following a bench trial on the issue of liability only. After hearing testimony, reviewing exhibits, and examining the credible evidence of record, the Court enters judgment in favor of the defendant, Management Recruiters of O'Hare ("MRO"), d/b/a Office Mates-5 ("OM5") (collectively, "the Company"), and against the plaintiff, Vicki L. Spina ("Spina"). Pursuant to Rule 52(a) of the Federal Rules of Civil Procedure, the Court sets forth its findings of fact and conclusions of law.


 As is common in discrimination cases, the parties presented conflicting versions of the relevant facts. We therefore set forth the facts as we find them to be.

 The Parties

 1. Spina is a female who resides in Des Plaines, Illinois.

 2. MRO is an Illinois corporation with its principal place of business in Des Plaines, Illinois. MRO is engaged in the business of placing professionals and executives with salaries of $ 30,000 or more. OM5 is a wholly-owned subsidiary and division of MRO and is engaged in the business of placing secretarial, clerical, and office support personnel with salaries of $ 20,000 or less.

 4. Spina was employed by MRO in its OM5 division as an account executive from October, 1979 to May, 1982, when she voluntarily left the employ of OM5 to give birth to her first child. Spina was reemployed by the OM5 division in March, 1983 and worked there continuously until November 20, 1985.

 5. When initially hired in 1979, Spina signed an employment agreement governing certain of her terms and conditions of employment. When hired, all account executives of MRO and OM5 sign identical employment agreements containing, among other terms, the same restrictive covenant language and the same commission structure.

 Differences Between MRO and OM5

 6. Both MRO and OM5 are located in an office suite in Des Plaines, Illinois. The physical layout of the suite is configured such that MRO and OM5 are physically separated offices, sharing only a main entrance staffed by a receptionist. A walled training room separates the OM5 division from the entrance area, and in order to proceed from the entrance area to the OM5 area, one has to pass through two doors. As a result, employees working within the OM5 and MRO offices have no visual access to each other while working in their respective offices.

 7. MRO and OM5 are physically separated for legal, as well as operational reasons. Under the Illinois Private Employment Agency Act, private employment agencies and their recruiters must be licensed and must abide by certain statutory strictures. See Ill. Rev. Stat. ch. 111, paras. 901-915. The statutory definition of "private employment agency," however, does not include executive placement operations such as MRO. See Ill. Rev. Stat. ch. 111, para. 914.

 8. The nature of the placement services offered by MRO and OM5 and the qualifications of their respective employees are also different. On the one hand, MRO places executives earning $ 30,000 or more on a local and nationwide basis. The majority of the candidates seeking placement by MRO hold advanced degrees. As a result, MRO generally hires account executives who hold advanced degrees and have a specialty background, such as accounting, banking, law, etc. Most MRO employees have executive experience. These MRO employees, in turn, use their specialty backgrounds to place candidates in their particular specialty industry. On the average, an MRO account executive requires between six to seven weeks and two months to make a placement, with an average placement fee being over $ 11,000. Because of their different specialty areas, MRO account executives seldom work with one another to match a candidate with an account.

 9. OM5, on the other hand, places secretarial, clerical, and office support personnel earning $ 20,000 or less strictly on a local basis. In contrast to MRO, the majority of candidates seeking placement by OM5 do not hold advanced degrees. As a result, OM5 generally hires individuals who have a high school education and a secretarial or clerical background. Unlike the MRO account executives, the OM5 account executives have no specialized background, so most of the OM5 placements are made on a split-fee basis, with the account executive who furnishes the candidate earning 50% of the commission and the account executive who obtains the placement order from the client earning the remaining 50%. At OM5, the average elapsed time from the taking of an order to the actual placement of the candidate is less than one week, with the average placement fee (based on a fee schedule different from that used by MRO) being approximately $ 3,000. Whereas MRO is considered a "search firm," OM5 is registered as a licensed employment agency.

 11. The MRO and OM5 account executives have never worked together on accounts. No MRO account executive has ever transferred, either permanently or temporarily, to the OM5 division. Conversely, no OM5 account executive has ever transferred, either permanently or temporarily, to the MRO division. Nor has there ever been any line of progression between the OM5 and MRO positions.

 12. As a result of these operational differences, MRO and OM5 each use different stationery and have different telephone numbers. The MRO and OM5 employees also use different business cards, different stationery, different job orders and different send-out forms.

 13. MRO and OM5 also are operated as separate profit centers. Each division has a separate budget and advertising outlay. Nevertheless, because the total MRO payroll is relatively small (at all relevant times, the total staff at MRO and OM5, including Richard and Anita Kurz, numbered from twelve to seventeen), Richard Kurz has maintained a single payroll, bank account and profit sharing and health insurance plan for both divisions. Richard Kurz testified that he does so for reasons of administrative convenience and cost savings.

 14. Notably, all of Spina's non-party witnesses who were former employees of either MRO or OM5 testified to their perception that the MRO and OM5 divisions are operated as separate divisions.

 15. During the periods of Spina's employment with the OM5 division, all OM5 account executives were female, and they numbered between four and eight employees at any given time. On the other hand, MRO account executives were male and female, and they numbered between five and nine employees at any given time. During the course of Spina's employment, MRO employed a total of seven female account executives in the MRO division. All male and female MRO account executives share identical working conditions. The same differences in terms of employment that exist between male MRO account executives and OM5 account executives also exist between female MRO account executives and OM5 account executives.

 16. Generally, all employees of MRO and OM5 work a full-time schedule consisting of a 37 1/2 hour, five-day week.

 17. All MRO and OM5 employees are paid a minimum draw, which is an advance against future commissions. If commissions earned exceed the minimum draw, an employee receives a check for commissions because he or she does not need a draw. Thus, an employee who performs very well does not receive a draw, but, instead, receives commissions earned.

 Spina's Initial Employment with OM5

 18. In October 1979, Anita Kurz, as manager of OM5, hired Spina as a full-time account executive. Shortly after starting at OM5, Spina became a successful producer. It is undisputed that during most of her tenure at OM5, Spina performed her job excellently, received several awards and plaques for her sales performance, was the top producer in OM5's Des Plaines office, and was one of the top producers nationally.

 19. At the end of 1979, Anita Kurz became pregnant with the Kurzes' first child. During the latter stages of her pregnancy, Anita Kurz began experiencing pregnancy-related health problems and she stopped working in August, 1980. At the time Anita Kurz left, she intended not to come back to work, but to stay at home and raise her child.

 20. Before leaving, Anita Kurz chose Spina to act as manager at OM5 in Anita Kurz's absence. Spina continued to act as manager of OM5 on a full-time basis until May, 1982, when Spina voluntarily left OM5's employ to give birth to her first child. Between August, 1980 and May, 1982, Spina assumed most, but not all, of Anita Kurz's responsibilities. At the same time, Spina continued to work as an account executive. To compensate her for her increased responsibilities, Spina's pay arrangement was changed so that she received an override on the dollar volume of the individuals she supervised in addition to the commissions she earned. During the period of Anita Kurz's absence, Spina, as manager of the OM5 division, reported to Richard Kurz. Richard Kurz made all of the hiring and business decisions for the OM5 division in Anita Kurz's absence because of Spina's lack of experience in such matters. The remainder of the account executives in the OM5 division reported to Spina.

 21. Between October, 1979 and May, 1982, Spina, like all of the other MRO and OM5 employees, worked a full-time schedule consisting of a 37 1/2-hour, five-day workweek.

 22. At the end of 1981, Spina became pregnant with her first child and so informed Richard Kurz. In February, 1982, Spina announced that she did not intend to return to work after she left to have her child, deciding instead to stay home and raise her child. Richard Kurz told Spina that if she changed her mind, he would love to have her back. Anita Kurz, who at that time was herself pregnant with her second child, told Spina that she and Spina "would be mothers together."

 23. During the course of her first pregnancy, Spina often had to leave work early or miss days because of doctor's appointments or pregnancy-related illnesses. Spina was always permitted to take whatever absences she needed, and was never admonished for doing so.

 24. Spina voluntarily left OM5's employ on amicable terms in May, 1982. Shortly before Spina left, the Company threw a farewell office party for her at its expense, though this was not done for everybody who left the Company. After Spina left, the Kurzes remained in touch with her. The Kurzes invited Spina to the Company picnic in July, 1982, and she came. Anita Kurz also attended Spina's baby shower and bought her a stroller as a gift.

 Spina's Return to OM5

 25. In January, 1983, the OM5 business was failing, and Richard Kurz asked his wife to return to manage it back to health. Reluctantly, Anita Kurz returned to OM5.

 26. During the same month, Spina telephoned Richard Kurz and told him that she was interested in returning to work at OM5. Richard Kurz responded favorably, and the two agreed to meet for lunch to discuss the matter. During their meeting, Richard Kurz and Spina agreed that Spina would return as an account executive at OM5. Richard Kurz also mentioned to Spina that because she had left OM5 less than one year before, he thought that she would not lose her vested rights in the Company's profit sharing plan. Richard Kurz further advised Spina that he would arrange to have the 90-day waiting period for health insurance coverage waived so that she could immediately have such coverage. Spina was pleased with these arrangements. Spina also told Richard Kurz that she wanted assurances that she could take time off when necessary to care for her child, and Richard Kurz agreed.

 27. In March, 1983, after a ten-month absence, Spina returned to work as a full-time account executive in the OM5 division. Spina again reported directly to Anita Kurz. During her first few weeks, Spina encountered difficulty reacclimating to the business. Anita Kurz offered Spina encouragement, and Spina soon became a top producer again. Spina wrote a note to Anita Kurz thanking her for her encouragement. During the remainder of her employment, Spina wrote several other such notes to Anita Kurz.

 28. Following Spina's return to work, she and Anita Kurz became close personally. They socialized at each other's homes, went on outings together with their children, and exchanged birthday and Christmas gifts. In early 1984, after a fire struck Spina's home, Spina stayed at the Kurzes' home for a brief period. None of the other account executives shared this type of personal relationship with the Kurzes.

 Spina's Request for a Four-Day Workweek

 29. Sometime in June of 1984, Spina initiated a conversation with Anita Kurz in the Company training room. During this conversation, Spina requested that she be compensated in the form of a straight 50% commission plan. Spina said she felt she was entitled to this rate of commission because she was the top producer in the office. In response, Anita Kurz told Spina that Spina was already earning more money than anyone else in the office and refused Spina's request.

 30. All of the MRO and OM5 account executives worked under the same commission plan. Under this plan, employees received a 30% commission on the first $ 3,000 they cashed in each quarter, with a 5% increment for each additional $ 3,000 until they reached $ 15,000, after which they received a 50% commission on all subsequent cash-ins.

 31. Anita Kurz told Spina that she could not change the commission plan for Spina because Spina was fairly paid and to do so would create resentment among the other account executives. Spina expressed dissatisfaction with this response.

 32. Several days later, Spina initiated another conversation with Anita Kurz. This conversation also occurred in the Company training room. During this conversation, Spina asked Anita Kurz if Spina could work a four-day workweek, rather than a five-day workweek. In proposing this alternative, Spina explained that she wished to spend more time with her child. Anita Kurz told Spina that she would consider the idea.

 33. That evening Anita Kurz discussed the matter with her husband. By design, neither MRO nor OM5 had ever employed part-time employees before. In the Kurzes' judgment, the nature of the placement business required that account executives work a full workweek. Based on their experience, candidates and clients wanted immediate attention and tended to seek out other placement services rather than wait for an account executive to return a telephone call. (Spina, by her own admission, agreed with this assessment). To deal with this problem, Anita Kurz had established an office procedure whereby if an account executive was out, either Anita Kurz or another account executive would take the order for the absent account executive.

 34. In any event, after considering Spina's proposal to work a four-day, 30-hour workweek, Anita Kurz decided to accommodate Spina and grant her request. Anita Kurz did so because ...

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