Triable Question of Fact As to Whether Employee Was Terminated Because of Her Pregnancy Or Instead a Slow Down in Business

Garcia v. Wells Fargo Bank - Ninth Circuit Court of Appeals

Facts:  Paola Garcia ("Garcia") worked at Wells Fargo until she was subsequently terminated while on leave after her pregnancy.  Prior to her termination, Garcia sought a promotion to a Loan Doc Specialist position.  At the time she sought the promotion, she was not visibly pregnant.  However, Garcia did not get the promotion which instead went to an unnamed "Melissa Doe" that Wells Fargo hired.

Garcia filed suit against Wells Fargo based upon a claim of discrimination, retaliation and violation of the California Family Rights Act ("CFRA").  The district court granted summary judgment in favor of Wells Fargo as to all claims.  Garcia subsequently appealed. 

Holding:  The Court of Appeals noted that based upon the causes of action alleged by Garcia, the McDonnel Douglas burden shifting analysis would be applied:  After Garcia established a prima face case, the burden would then shift to Wells Fargo to provide a legitimate, non-discriminatory reason for its employment actions.  Once Wells Fargo met its burden, Garcia would then be required to establish that either Wells Fargo's showing was insufficient or that there was a triable issue of fact material to Wells Fargo's showing.  It is important to note that Garcia could meet her burden with direct or circumstantial evidence.

Failure to Promote

In response to the failure to promote claim raised by Garcia, Wells Fargo stated that it hired another candidate for the Loan Doc Specialist position because the candidate, unlike Garcia, had previously worked as a Loan Doc Specialist for Wells Fargo and was familiar with Wells Fargo's loan processing systems.  Notably, Garcia stipulated that the applicant was more qualified for the position.  Readers might recall that the U.S. Supreme Court has previously held that an employer has discretion to choose among equally qualified candidates for a position.

To counter Wells Fargo's reasoning for choosing another candidate, Garcia claimed that there was evidence that a Wells Fargo area manager commented that a pregnant woman could not be promoted because she would take time off work.  Although this area manager supervised two individuals that made the hiring decision at issue in this case, both individuals provided sworn statements that they did not know the area manager had made any comments about an applicant's pregnancy precluding them from receiving a promotion.  As a result of Garcia's inability to point to any evidence to support a rational inference that the area manager's alleged statement influenced the hiring/promotion decision, the Court held that the district court properly granted judgment in favor of Wells Fargo.

Termination

In regard to Garcia's termination claim, Wells Fargo asserted that the reason for eliminating Garcia's position was based on a "reduction in force."  To support this rationale, Wells Fargo relied upon a "Business Case" from October 24, 2014 (three days before Garcia's termination) which identified a "slowing in the market" resulted in a "position elimination of the HMC Jr."   However, Garcia argued that there was no overall slowdown in business but rather an internal reassignment in loan responsibilities.  In fact, the "Business Case" offered little to substantiate the market slowdown claim.  As well, Garcia testified that approximately two weeks after she took additional CFRA leave to care for her newborn baby, two Wells Fargo employees came to her house and took her laptop and FOB key.  Shortly thereafter, a Wells Fargo employee took Garcia's keys because "a new HMC was going to be sitting at Garcia's desk."  Based upon this evidence, the Court held that it was possible that a jury could find that business was not actually slowing down and that the termination came about in response to the request for additional CFRA leave.  As a result, the Court held that the granting of summary judgment in favor of Wells Fargo as to this claim was improper.

Judgment:  The Court of Appeals affirmed summary judgment in favor of the employer in regard to an employee's failure to promote claim but reversed a granting of summary judgment in favor of the employer as to the employee's termination claim as the employee had created a fact issue that a jury could find that the employee was terminated as a result of her pregnancy.

The Takeaway:  As with any case on appeal, it is important to look at what had been established at the trial court level and actually admitted into evidence.  In this instance, under the McDonnell Douglas burden shifting analysis, Garcia had simply failed to establish a valid claim that she was not promoted because of her pregnancy.  The fact that the individuals who chose another applicant for the Loan Doc Specialist position did not know of Garcia's pregnancy (when the employment decision was made) is likely what ultimately doomed this portion of Garcia's claim.  With that being said, I agree with the Court of Appeals finding that Garcia had met her burden to establish that she was terminated because of her pregnancy.  Given the circumstantial evidence (namely the Wells Fargo employees taking the laptop and FOB key as a new HMC would be sitting at Garcia's desk), I think that a jury could find that Wells Fargo's actions, after learning of Garcia's pregnancy and additional CFRA leave, established that Garcia was terminated as a result of her pregnancy.  Bear in mind, however, that the Court of Appeals did not find that this portion of Garcia's claim was true and correct.  Rather, there was enough evidence as to this portion of the claim to defeat the granting of summary judgment in favor of Wells Fargo.

Majority Opinion Judge:  Per curiam decision

Date:  June 20, 2018

Opinion:  http://hr.cch.com/eld/GarciaWellsFargo062018.pdf