An employee’s pregnancy raises questions

Best Threads, a small New Hampshire retail chain, has sent Valued Employee to management training, costing thousands of dollars. Valued Employee has been with the company for years and is slotted to manage a new Best Threads store opening in time to catch the back-to-school rush and holiday season.

In June, after her training, Valued Employee announced she is pregnant, due in early November. She intends to go forward with the plans to manage the new store, but will require leave during the holiday rush for the birth. Wouldn’t it be better for her to take the next store management position that opens up? What should Best Threads do?

Best Threads should tread carefully.

As a general rule, Best Threads cannot change the terms of Valued Employee’s position because she is pregnant. Best Threads must base its decisions on the employee’s actual ability to perform the job, not on perceptions. Also, Best Threads must comply with state and federal pregnancy and childbirth leave law.

The federal Pregnancy Discrimination Act applies to employers with 15 or more employees. It makes it unlawful to refuse to hire, discharge, or otherwise discriminate against any individual with respect to compensation, terms, conditions or privileges of employment because of pregnancy, childbirth or related medical conditions. It requires covered employers to treat women affected in the same manner as other applicants or employees with temporary disabilities.

The Family and Medical Leave Act (FMLA) requires certain employers to provide up to 12 weeks of leave related to pregnancy and child birth to eligible employees. The key employee provision of FMLA allows an employer to deny reinstatement if it would cause substantial and grievous economic injury to the operations of the employer. This determination can take into account whether permanent replacement is unavoidable and, if so, the cost of then reinstating the employee. However, the substantial and grievous economic injury standard is more stringent than the undue hardship test under the Americans with Disabilities Act. It is a difficult standard to meet.

Under New Hampshire law, an employer must permit a female employee to take a leave of absence for the period of temporary physical disability resulting from pregnancy, childbirth or related medical conditions and allow the employee to return to her original or a comparable position unless business necessity makes this impossible or unreasonable.

With respect to benefits, pregnancy, childbirth and related medical conditions must be considered temporary disabilities and treated as any other temporary disability. This applies to employers employing six or more employees.

Course of action

Best Threads must start from the premise that Valued Employee will be able to perform the essential functions of her promised position, regardless of generalized perceptions about her pregnancy. Best Threads may, however, notify Valued Employee of the physical requirements of the position, including any known possible hazards (e.g. any known hazards, such as chemicals to the developing fetus) and require Valued Employee to report any anticipated inability to perform. Valued Employee must be allowed to work as long as she is able.

Best Threads should consider immediately whether Valued Employee meets the definition of a key employee as defined by the FMLA. But in making this decision, Best Threads must first determine whether there would be substantial and grievous economic injury in reinstating Valued Employee.

Considerations may include temporary reassignment of current store managers, temporary placement agencies, etc. Because the substantial and grievous economic injury is a very high standard, legal counsel should be consulted before any decision is made. Best Threads must notify Valued Employee as soon as practicable if it is making the key employee designation or it will lose the right to deny reinstatement.

If Best Threads does not make the designation, it must find coverage for Valued Employee during her leave, including any intermittent leave, and plan to reinstate Valued Employee upon completion of her leave.

However, Best Threads may hold Valued Employee to the same performance standards to which she otherwise would be held, with exception for the legitimate FMLA absences.

Cheryl Deshaies, an attorney in the Employment Law Practice Group at the law firm of McLane, Graf, Raulerson & Middleton, can be reached at 603-628-1315 or cheryl.deshaies@mclane.com.