Family leave could leave you jobless

7 October 2004

10 minute read

Pregnant? Caring for an elderly parent? Be careful. If you work on Wall Street, chances are that by taking an extended leave you may be giving up a job. Read on to find out how to protect yourself.

When Karen Pisciotta learned she was pregnant with her first child, she decided to keep working full-time at her job as a mid-level financial analyst at a Manhattan investor relations firm until just before her son was born.

Then, Pisciotta, fresh off a stellar performance review, hammered out a pre-approved pregnancy leave that qualified under the Family and Medical Leave Act (FMLA) and, with her employer's blessing and support, took some time off to have and care for her baby. Pisciotta's pregnancy in the spring of 2003 went off without a hitch, but the outcome at work wasn't so trouble-free.

Some ten weeks after taking leave, and just days after Pisciotta phoned her managing director to tell him she was ready to return to work, Pisciotta was told that her job no longer existed. The reason given by her boss? The young man who replaced Pisciotta during her leave had been given all of her clients and had started to bring in new ones.

Pisciotta, who had been told that her replacement would be temporary, was now being told that she was the one who was no longer needed. 'I think they were expecting that I'd love so much being a mom that I'd phone them and tell them that I wasn't coming back,' Pisciotta says.

Pisciotta is not alone. Sure, the Family and Medical Leave Act of 1993 requires your company to give you 12 weeks of unpaid leave a year to tend to family and health emergencies, including childbirth. Under the law, your company must give you back your job, or an equivalent one, upon your return. The law aims to protect employees from discrimination, retaliation or blacklisting as a result of their having taken leave.

But here's what you may not realize: abuse of the law on both sides of the HR table is on the rise, Wall Street lawyers and diversity and recruitment executives say. During the past 12-16 months, increasing numbers of Wall Street employees-especially women who use the act to take or extend maternity leave-are filing complaints alleging violations of the FMLA.

'Our firm has seen an increase in family leave-related litigation against financial services firms across the board,' says Michelle Phillips, a partner at Jackson Lewis, a national employment law firm that represents Wall Street securities firms and other financial services companies in labor and employment disputes. 'We are especially seeing an increase in litigation involving women who return from maternity leave.'

Loophole abuse

What's driving this trend? In a workplace culture as aggressive and client-driven as Wall Street's, the law can be seen as especially cumbersome, chiefly when women seek to return to reduced work schedules.

A loophole in the family leave law exacerbates the problem for women returning to work after maternity leave. It says that companies are not required to continue family leave benefits or reinstate employees 'who would have been laid off or otherwise would have had their employment terminated had they continued to work during the FMLA leave period.' Workplace attorneys say some managers may create small-scale department reorganizations just to avoid hiring some people back, especially in top revenue-producing jobs.

On one hand, those same revenue makers arguably are not being realistic about what it takes to come back-regardless of what the law says. Pat Wieser, managing director of Russell Reynolds Associates, who recruits employees for capital markets positions at investment banks, says both men and women in Wall Street jobs seldom even take vacations, much less family leave.

'These markets move fast, product moves fast, competition moves fast and you have to be on top of it all the time,' Wieser says. 'If a supervisor figures out that they can do your job without you, then you will have job insecurity. It's the nature of the beast.'

On the other hand, some companies say that any urge by managers to minimize or lay off women returning from leave simply underscores the need for more enlightened employee retention policies.

One of Deutsche Bank's new role-playing exercises for executives participating in diversity training, for example, focuses on what happens when a woman returns from family leave and tries to manage her transition back. Karen Meyer, head of global diversity at Deutsche Bank, says companies should be able to accommodate such employees, but it's not always an easy concept for some to grasp at first.

Meyer says, 'Especially challenging is balancing the need to be on the ground and producing with the longer-term view that a company needs to accommodate its talent through some

of life's changes to retain them over the longer term.'

Attorney Phillips, whose firm counsels Wall Street firms and other clients in preventive litigation strategies, says both employers and employees need to more thoroughly evaluate family-leave related issues to prevent misuse. 'It's conceivable that when someone is gone for three months, the position they left may now be gone, and maybe downsizing and layoffs have truly eliminated the position.'

Discrimination with a small 'd'?

Bruce E. Menken, a partner in the Manhattan-based employment law firm of Beranbaum Menken Ben-Asher & Bierman, says, 'I think the common belief is that women, especially, will be distracted when they have children and they won't be as committed to their work once they get back.'

Menken, who has represented financial executives at firms including Goldman Sachs, Société Générale, American Express and Morgan Stanley, says that in some family leave cases he's handled, a woman has been replaced by a man or a non-pregnant, non-childbearing woman.

Typically in these cases, he says, women on leave will get a letter or a phone call from their employer during their leave, telling them that their job has been downsized or reorganized out of existence, and that there is no equivalent position available. In Pisciotta's case, her boss at first seemed very pleased she had called to announce her return, only to convey a couple of days later that her job had vanished.

More common, says Menken, are increased cases of what he calls 'discrimination with a small 'd': That's when an employer does not call a woman's replacement her replacement. Instead, a supervisor at the department level decides to conduct a minor reorganization of the department. Menken says this is done 'to cloak the discrimination so that now, one person is handling three other positions and there isn't the old job nor an equivalent job to be had.'

HR managers, especially if they're at a lesser rank than the supervisor in question, can sometimes turn a blind eye or simply get overruled, Menken says. The more revenue-producing a person's job is for the company at large, the less likely it is that HR will prevail on behalf of an employee back from an extended absence from clients and co-workers.

And if the employee sues? Companies can negotiate a lucrative severance package or offer a lump-sum settlement before a complaint even gets to court. In Pisciotta's case, the company initially offered her a severance that was equal to a package given to a much-junior male employee who had been fired for substandard work. Since Pisciotta had no health or performance issues, she hired a lawyer and was able to hammer out a much better severance deal.

But she still wasn't able to win back her job. 'Sure, I got a payout- but my job was gone,' she says. 'And while they seemed okay about discussing a reduced work schedule before I took my leave, they didn't even want to discuss a part-time arrangement when I told them I was coming back.'

For all the issues around family leave, however, Menken advises clients to think twice about suing. 'Employers know that litigation can be a war that can last a long time and end up being so costly that it could compromise a worker's future employment prospects,' he says.

Some settlements can work out better in the long run, however. Menken says, 'I tell some of my clients that if they can get 50 cents on the dollar in three months from the date that their company sends them a goodbye letter... that's often better than blood and bruises-especially if they now have a newborn, are still sick or have just been through an emotionally debilitating family hardship.'

Get smart

Here's how to decrease the chances that you'll be downsized while on a family leave: