Mothers Work Inc. Brand Image and Accusations of Employment Discrimination A Notre Dame case study prepared by research assistants Carolyn Billick and Lusiena Wong under the direction of Prof. J. S. O’Rourke, IV. Copyright 2004.

Mothers Work’s Brands

Presentation Overview Introduction to Problem Company History Rebecca Matthias, founder of Mothers Work, Inc. Corporate Communication at Mothers Work Cynthia Papageorge

Presentation Overview Women in the Workforce Pregnancy Discrimination Maternity Laws (FMLA, MMLA) Lawsuit Discussion Questions

Problem Late June, 2003, Rebecca Matthias called an emergency meeting to discuss Cynthia Papageorge’s lawsuit. Papageorge is former district manager who has sued the company and VP Frank Mullay for firing her, claiming the dismissal was because of her gender and pregnancy.

Problem Mothers Work had settled two similar cases outside of court, another was dismissed. Response from feminist groups. Image and reputation concern.

Company History Began by Rebecca and Dan Matthias in 1982 out of their Philadelphia home. Market niche for professional-looking maternity wear. Brands include Motherhood Maternity, Mimi Maternity, A Pea in a Pod and iMaternity . IPO in 1993, facilitated by Meridian Venture Partners.

Company History “Give the customer what she wants, when she wants it.” Vertically integrated, supply chain efficient. Recently opened 1,000th store in New Jersey during summer 2003. Considered the leading maternity clothing provider in the US. $500 million organization.

Rebecca Matthias President and COO of Mothers Work, Inc. Civil engineer, architect: MIT, Columbia, Univ. of Pennsylvania. Quit job to start computer company with husband, Dan. Became pregnant and had trouble finding professional maternity wear. Advocate for women owning small businesses.

Rebecca Matthias Board of Trustees at Drexel University, University of Pennsylvania. Author of a popular book about Mothers Work. Honored by the United States Small Business Administration. Mother of three children.

Rebecca Matthias “I’m a huge advocate for women starting their own businesses because it fits into [their] lifestyle…Women need flexibility, especially women with children…”

Corporate Communication at Mothers Work and Mona Astra Liss No formal department of corporate communication. Rebecca Matthias serves as company’s most visible spokesperson, followed by Mona Astra Liss, Publicity Director.

Corporate Communication at Mothers Work and Mona Astra Liss Responsible for all of Mothers Work fashion shows, creation of A Pea in a Pod’s celebrity mother program. Has written for New York Times, Washington Post, People, and US Weekly. Appears on a regular TBS show. “Dinner and a Movie.”

Cynthia Papageorge Began work in 1997 overseeing stores in Massachusetts, Connecticut, and Rhode Island. October 1999: 37 weeks pregnant and ordered to be fired by VP Frank Mullay after surprise store inspections. Mullay made several comments about Cynthia’s “condition” inhibiting her work.

Cynthia Papageorge Jan Dowe, Papageorge’s boss, refused to fire Papageorge after being told it would be illegal. Six months after returning from maternity leave, Papageorge was released after taking medical leave for an unrelated shoulder injury.

Women in the Work Force Increased participation in the labor force. Accounted for 85% of total increase in number of workers with more than one job between 1989-1999. Labor force participation continues to be highest in the 35-to-44 age groups. Working harder. “Double shift.”

Pregnancy Discrimination The frequency of pregnancy-related discrimination cases is on the rise. According to the U. S. Equal Employment Opportunity Commission: ~ Complaints nationwide increased 10% during 2002 to more than 4,700 cases. ~ Increase of approximately 40% since 1992.

Protection Pregnancy Discrimination Act (PDA) of 1978. Family Medical Leave Act (FMLA). Massachusetts Maternity Leave Act (MMLA).

Pregnancy Discrimination Act The Pregnancy Discrimination Act (PDA) of 1978 was passed as an amendment to Title VII of the Civil Rights of 1964. The act states, in part: “Women affected by pregnancy, childbirth, or related medical condition shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not affected but similar in their ability or inability to work”

Family Medical Leave Act The Family Medical Leave Act (FMLA) was passed by Congress in 1993 and guarantees employees of companies up to 12 weeks of unpaid leave annually for certain medical reasons or for the birth or adoption of a child. To be eligible: Employer must have 50 or more employees. Employees have been working for the employer for at least 12 months and 1,250 hours in the last year.

Family Medical Leave Act The FMLA protects employees by: Guaranteeing employees of companies up to 12 weeks of unpaid leave annually for certain medical reasons or for the birth or adoption of a child. Requiring employers to reinstate employees to their former job or an equivalent job at the end of the leave. Maintaining any group health insurance coverage under the same conditions of coverage and cost-sharing arrangement as if the employees were working during the leave.

Massachusetts Maternity Leave Act In the state of Massachusetts, employees receive additional protection through the Massachusetts Maternity Leave Act (MMLA). To be eligible: The employer must have 6 or more employees. Employees should have completed 3 months of employment probation. Employees must give 2 weeks notice of departure date and intent to return.

Massachusetts Maternity Leave Act The MMLA requires that: Employee on leave be restored to the previous or a similar position upon return to employment following leave. The position must have the same status, pay, length of service credit and seniority as the position the employee held prior to the leave.

Massachusetts Maternity Leave Act The MMLA also requires the maternity leave to not affect the employee’s right to receive: Vacation time Sick leave Bonuses Advancement Seniority Length of service credit Benefits Plans or programs she was eligible at the date of the leave Advantages or rights of her employment incident to her position

Massachusetts Maternity Leave Act BUT…. MMLA does not give employee returning from leave greater rights in terms of benefits or work conditions over other employees who have been working while the prior employee was on leave. Employer is not required to reinstate a returning employee to her previous position if other employees of the same caliber and length of service have been laid off during her leave period due to economic conditions or operation changes.

The Lawsuit Lawsuit claims Papageorge was fired because she was pregnant Papageorge’s lawyer: “It seems that pregnant women are subject to termination by virtue of their pregnancy. That position was made known in meetings with managers at Mothers Work. The other women [from other lawsuits] were terminated for the same reason.” Dowe filed a similar suit after being fired shortly after returning from maternity leave. Case was settled out of court.

Discussion Questions What facts in this case appear to be most important to you? Who are the key stakeholders in this case? How will a verdict for or against Papageorge affect the parties? What actions (if any) should Mothers Work, Inc. take? What message should the company send to the public? Who is Mothers Work’s target audience?

Discussion Questions What are the critical issues of this case? Which issue should Mothers Work confront first? Since there is no Corporate Communications department, who should deliver Mothers Work’s message? What mediums should Mothers Work use to convey its position? This lawsuit has not received much media attention (since the original filing of the suit). Why do you think this is the case?