On November 9, 2011, the US Circuit Court of Appeals for the Seventh Circuit issued an opinion in Makowski v. SmithAmundsen LLC, reversing the trial court's dismissal of claims against an employer for pregnancy discrimination, Family and Medical Leave Act (FMLA) interference and retaliation. The issue in this case was whether statements made by the employer's HR director were made within the scope of her employment and therefore admissible as an exception to the hearsay rule.

Laura Makowski worked at SmithAmundsen LLC as Marketing Director. In the summer of 2007, she notified the firm that she was pregnant. She requested and received leave under the FMLA beginning before the birth of her child. In January 2009, while Makowski was on maternity leave, the firm's Executive Committee decided to terminate Makowski and replace her with another member of the team. The committee informed the firm's HR Director that Makowski would be terminated and asked the Director to consult with outside counsel to discuss the firing.

In February 2008, firm leadership informed Makowski that she was being terminated as part of an organizational restructuring. She came into the office the same day to collect her belongings and met the HR Director. The HR Director told Makowski that the actual reason she was fired was because of her pregnancy and FMLA leave, and that other employees had been terminated for similar reasons. The HR Director also suggested that Makowski talk to a lawyer about a possible class action for discrimination.

Makowski filed suit in the Northern District of Illinois, under the Pregnancy Discrimination Act and the FMLA. In her complaint, Makowski cited the HR Director's comments as direct evidence of discrimination. SmithAmundsen moved for summary judgment, arguing that the statements were inadmissible as hearsay because the HR Director was not involved in the firing decision. The trial court agreed, finding that because the firm's Executive Committee made the decision to terminate Makowski before speaking to the HR Director, those comments were not admissible. The trial court granted summary judgment to SmithAmundsen on all claims.

Makowski appealed to the Seventh Circuit.

The Seventh Circuit reversed the trial court's decision, holding that the HR Director's statements were made within the scope of her employment. The statements were, therefore, admissible as admissions of the firm. Though the firm had discussed terminating Makowski before the HR Director was consulted, the Seventh Circuit found that the employment decision was Makowski's actual termination. Because the firm asked its HR Director to consult outside counsel about the termination before it occurred, the Seventh Circuit found that the HR Director was involved in the decision-making process. The HR Director also regularly consulted on hiring and firing decisions for the firm, including compliance with anti-discrimination laws.

Because these statements were admitted as evidence linking Makowski's termination to her pregnancy, the Seventh Circuit found that there were genuine issues of material fact on Makowski's claims of pregnancy discrimination, FMLA interference and retaliation.

Employers should not assume that statements made by non-decision makers will be excluded as hearsay, and should ensure that employees who regularly consult on hiring and firing decisions are properly trained in best practices for terminating employees. Best practices should include appropriate channels for transmitting information about the termination to the employee in question.