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November 8, 1994



The opinion of the court was delivered by: WILLIAMS

Plaintiff, Penelope Jane DeNardo ("DeNardo"), has brought this suit against her former employer Clarence House Imports, Ltd. ("Clarence House"). DeNardo alleges that Clarence House discharged her because she was pregnant, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as amended by The Pregnancy Discrimination Act of 1978. *fn1" Defendant has moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the reasons stated below, defendant's motion is denied in part and granted in part.


 Defendant Clarence House, a New York wholesaler, sells home furnishings, fabric, and wallpaper to interior designers and hotels. Clarence House operates a company-owned showroom at the Merchandise Mart in Chicago. (Raup Dep. p. 7-8). Robin Roberts ("Roberts") is the sole shareholder of Clarence House and the chairman of its Board of Directors. He is the only person at Clarence House with the authority to make personnel decisions. (Roberts Aff. PP 1, 3). John Raup ("Raup") is Clarence House's national sales manager. Raup's responsibilities include supervising the operations at the Chicago showroom. Barbara Wike ("Wike") is the on-site manager for the showroom. (Raup's Aff. p. 7-12).

 On December 28, 1991, DeNardo learned that she was pregnant. (DeNardo' s Answers to Interrogatories, #2). On December 30th, DeNardo called Clarence House's comptroller in New York, Harold Spector, to request insurance claim forms. (DeNardo Dep. at 28). When Spector asked DeNardo why she needed the forms, DeNardo informed him that she was pregnant. The next day, December 31, 1991, Raup called the Chicago showroom from his office in New York and told Wike that the receptionist position was to be eliminated and that she was to fire DeNardo. (Raup Dep. at 27-28). After speaking with Raup, Wike told DeNardo that she was fired "due to the recession." According to DeNardo, Wike then said to her "I hear [you're] pregnant, congratulations when is the baby due." (DeNardo Dep. at 30-31).

 Defendant asserts that the decision to fire DeNardo was made well in advance of December 31, 1991. Roberts claims that sales in Chicago had declined in November. Because Clarence House could no longer afford to pay a receptionist, he decided at that time to eliminate the position. He then notified Raup of his decision. Together they decided to wait until after Christmas to fire DeNardo, "as a gesture of Christmas spirit." (Raup Dep. at 20-23, Roberts Aff. PP 5-9).

 Less than two months after firing DeNardo, Clarence House hired Christopher Peregoy ("Peregoy"). Clarence House asserts that Peregoy was hired as an assistant in the showroom, and that his principal responsibility was to do stock work. (Raup's Dep. p. 39). Peregoy himself, however, claims that he was hired as a receptionist and that his daily duties consisted primarily of sitting at the front desk and answering the phones, only occasionally loading or unloading stock. (Peregoy's Aff. P 8). Peregoy's annual salary was $ 18,200, while DeNardo's annual salary had been $ 16,900. (Plaintiff's Ex. G, Employee Profiles).

 On March 20, 1992, DeNardo filed a charge of pregnancy discrimination with the Equal Employment Opportunity Commission ("EEOC"). On June 30, 1993, the EEOC dismissed DeNardo's claim and issued a right to sue letter. (Def. Ex. G). DeNardo subsequently brought this action. Clarence House has moved for summary judgment on two grounds. First, Clarence House asserts that DeNardo has failed to produce sufficient evidence to sustain her substantive claim of gender discrimination under Title VII of the Civil Rights Act of 1964. Second, Clarence House asks the court to decide as a matter of law that because they had less than 100 employees at all relevant times, punitive damages should be capped at $ 50,000 pursuant to 42 U.S.C. § 1981a(b)(3)(A).

 Summary Judgment Standard

 Summary judgment is appropriate only when the evidence presented raises no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Scherer v. Rockwell Int'l. Corp., 975 F.2d 356, 360 (7th Cir. 1992). "In order for an issue to be 'genuine,' the evidence must be such that a reasonable jury could return a verdict for the nonmoving party." Id. at 360 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). When considering a motion for summary judgment, the court must view the evidence, as well as all reasonable inferences to be drawn from it, in the light most favorable to the nonmoving party. Sarsha v. Sears, Roebuck & Co., 3 F.3d 1035, 1038 (7th Cir. 1993) The summary judgment standard "is applied with added rigor in employment discrimination cases, where intent and credibility are crucial issues." Id. at 1038.


 Gender Discrimination

 To succeed on a claim of discrimination under Title VII of the Civil Rights Act, a plaintiff may either provide direct evidence of discrimination or, more commonly, show discrimination through the indirect, burden-shifting method of proof established by the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973). Under the McDonnell Douglas framework a plaintiff must first state a prima facie case of discrimination. Id. at 802. For a gender discrimination claim the plaintiff must show: (1) she was a member of the protected class, (2) she was doing her job well enough to meet her employer's legitimate expectations, (3) she was discharged or ...

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