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Ilhardt v. Sara Lee Corp.

June 26, 1997

LORA S. ILHARDT, PLAINTIFF-APPELLANT,

v.

SARA LEE CORPORATION, A MARYLAND CORPORATION, DEFENDANT-APPELLEE.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 94 C 5034 George W. Lindberg, Judge.

Before HARLINGTON WOOD, JR., COFFEY and EASTERBROOK, Circuit Judges.

HARLINGTON WOOD, JR., Circuit Judge.

ARGUED APRIL 2, 1997

DECIDED JUNE 26, 1997

In June of 1994, Sara Lee Corporation implemented a corporation-wide reduction-in-force (RIF) affecting personnel from every department. At that time, Lora Ilhardt, an in-house attorney, differed from her law department colleagues in only two respects: she worked part-time and she was pregnant. When pressured by Sara Lee's president to reduce the size of the department, Ilhardt's supervisors, although extremely satisfied with her performance, decided to eliminate her position. Ilhardt's supervisors say she was chosen because she worked part-time; Ilhardt maintains they let her go because she was pregnant. She sued, claiming Sara Lee violated the Pregnancy Discrimination Act (PDA) as well as the Family and Medical Leave Act (FMLA). She also argues that Sara Lee's stated reason for selecting her for the force reduction -- that she worked part-time -- violated Title VII because it constitutes an employment policy that has a disparate impact on women. The district court, however, found that Ilhardt's complaint had not stated genuine issues of material fact and granted Sara Lee's motion for summary judgment. Ilhardt appeals, and we affirm.

The following are the relevant facts of this case. *fn1 Lora Ilhardt began working for Sara Lee in April, 1988. She was the first female attorney to be hired in Sara Lee's Chicago office. After only a short time working there, she was given several raises and promoted to the Director level, entitling her to bonuses based on Sara Lee's profitability. In October, 1989, Ilhardt gave birth to her first child, and after her three-month maternity leave, she asked if she could return to work only three days a week. Her request was approved, and her salary was prorated to reflect the reduction in the amount of time she worked, and then it was increased to incorporate a yearly bonus which she received regardless of the company's productivity, unlike the other directors. Her part-time status caused some inconvenience, but on the whole both clients and co-workers were satisfied with the work Ilhardt did, and she received high marks in her yearly performance reviews.

Ilhardt began her second maternity leave in July, 1991. At that time, the legal department was planning to move into new offices. Shortly before Ilhardt left, Gordon Newman, Sara Lee's General Counsel and the head of Ilhardt's department, circulated a floor plan which indicated where each attorney's new office would be. Ilhardt noticed that although an office was designated with her title, her name was not on the floor plan. She questioned Newman as to why her name was omitted. He responded that he wanted to wait to see if she returned to work and then determine what their needs were. Concerned, Ilhardt spoke to William Lipsman, the associate general counsel and her immediate supervisor. Lipsman told her that although Sara Lee reserved its right to reevaluate its need for a full-time attorney in the future, she could return to work part-time after her maternity leave.

In the fall of 1992, rumors of a corporate office reduction-in-force began to circulate among Sara Lee's employees. Newman decided that if he were ordered to eliminate an attorney position it would be Ilhardt's part-time position because the remaining employees could absorb a part-time attorney's work more easily than a full-time attorney's. He claims that he informed Ilhardt of this decision, but Ilhardt says she was never told her part-time position would be eliminated. In any event, Newman offered Ilhardt a new full-time position which the legal department was creating to assist with its increasing workload and Sara Lee's planned Latin American acquisitions. He indicated to Ilhardt that if she were working full-time, he would be better able to protect her job should an RIF affect the legal department. She did not accept the new job, however, as she did not consider herself qualified for some of its duties and as the job required extensive travel, which she preferred not to do. She was also contemplating another pregnancy, but did not inform Newman or anyone else at Sara Lee of those plans.

Ilhardt announced her third pregnancy in April, 1993. Aware that her job might be in jeopardy because of the impending RIF, Ilhardt told Lipsman that she would be willing to take a six-month maternity leave if that would help the law department's budget and preserve her job. Cor Boonstra, Sara Lee's president, implemented the RIF in late April, requiring every corporate office department to reduce its numbers. He met with the department heads in late May to discuss their responses. Lipsman represented the law department and when Boonstra insisted that they cut a professional from that department, Lipsman informed him of the decision to cut Ilhardt's part-time attorney position. He also told Boonstra that Ilhardt was pregnant and put her offer of taking an extended maternity leave on the table. This placated Boonstra somewhat, but he added two conditions: that Ilhardt's leave would last eight months, until the beginning of the next fiscal year, and that Sara Lee would not guarantee her a position at the end of that period. If the law department's budget permitted, however, she could return. Boonstra also agreed that Ilhardt and another pregnant employee could work until they took maternity leave instead of leaving in June with the others whose positions were eliminated.

When Lipsman told Ilhardt about this arrangement, she rejected it. Lipsman then told her she could receive her severance package either when she left to have her baby or after the end of the eight-month leave period if the budget did not allow for her return. Thinking that Ilhardt would accept the company's offer of taking a leave of absence in lieu of termination, Lipsman told the rest of the law department that none of them would be affected by the RIF. Later, Ilhardt asked whether she could save her job by returning to work full-time after her maternity leave so that the law department would have to lay off a more junior attorney. Lipsman answered that she could not do this, as she had already rejected the full-time position offered to her and the company had hired someone else to fill that position. In June of 1993 Ilhardt's name was placed on a list of personnel who were being laid off, but next to her name was the designation "extra non-paid maternity leave." On a later update of the list, she was listed as "status to be determined." In September, Sara Lee notified Ilhardt that her position had been eliminated. Ilhardt left Sara Lee on maternity leave in October and wrote a letter to Newman in November requesting to return in January. Newman responded that because her position had been terminated the previous June, she could not return. He also reminded Ilhardt that he had told her more than a year earlier that her part-time position would be cut should he have to reduce the legal department staff and she had agreed that would be a fair decision.

Ilhardt then filed a charge of discrimination with the EEOC and sued Sara Lee within 90 days of obtaining a right-to-sue letter. She alleged three federal claims: a disparate treatment claim under the Pregnancy Discrimination Act, a claim for a violation of the Family and Medical Leave Act, and a disparate impact claim of sex discrimination under Title VII. The district court granted summary judgment in Sara Lee's favor, holding that Ilhardt had not stated a prima facie case of discrimination for two reasons: (1) she could not prove that she had been treated less favorably than others outside her protected group of pregnant employees, and (2) the facts showed that she had actually been treated more favorably than non-pregnant employees. The court additionally found that Ilhardt had failed to rebut Sara Lee's stated reason for selecting her for the force reduction, that is, her part-time status. Next, the district court found that she had not established a proper claim for disparate impact because she could not prove that her selection for the RIF on the basis that she worked part-time was a pattern or practice of employment, nor could she prove that selecting employees for an RIF based on part-time status had a disparate impact on women. Finally, the court held that Ilhardt was not an eligible employee under the FMLA and there were no genuine issues as to whether her discharge violated that act.

We review a district court's grant of summary judgment de novo, Wohl v. Spectrum Mfg., Inc., 94 F.3d 353, 355 (7th Cir. 1996); Beck v. University of Wisconsin Bd. of Regents, 75 F.3d 1130, 1134 (7th Cir. 1996), and will affirm where the record shows that no genuine issues of material fact exist from which a rational fact-finder could return a verdict for Ilhardt. See Hill v. Burrell Communications Group, Inc., 67 F.3d 665, 670 (7th Cir. 1995). We emphasize that the focus of our inquiry is on material facts: those which may affect the outcome of this case under the substantive law. See First Ind. Bank v. Baker, 957 F.2d 506, 508 (7th Cir. 1992). A dispute among such facts must also be genuine, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986), and an issue is genuine only when its resolution in favor of the plaintiff could prompt a reasonable jury to return a verdict for the plaintiff. Id. In this case, we will draw all reasonable inferences in Ilhardt's favor, and because this is an employment discrimination case where intent and credibility are particularly crucial to the outcome, we apply this standard especially rigorously. See Wohl, 94 F.3d at 355; Piraino v. International Orientation Resources, Inc., 84 F.3d 270, 273 (7th Cir. 1996); Sarsha v. Sears, Roebuck & Co., 3 F.3d 1035, 1042 (7th Cir. 1993).

I.

The Pregnancy Discrimination Act amended Title VII of the Civil Rights Act to clarify that pregnancy discrimination is included in Title VII's prohibition on sex discrimination. EEOC v. Northwestern Memorial Hospital, 858 F. Supp. 759, 763 (N.D. Ill. 1994). The PDA provides that "[w]omen affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment related purposes . . . as ...


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