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Rescinded Notice of Future Termination Was Actionable Adverse Action

Alana Shultz was 19 weeks pregnant at her wedding. She was employed as the program director for a New York City synagogue. As she was leaving for her honeymoon, she shared the pregnancy news with her supervisor. Upon her return, Ms. Shultz was told that her employment would end in a few weeks due to “restructuring.” Although she expressed how difficult it would be for her to get a new job when she was so visibly pregnant, they did not respond. She was offered a severance agreement of six weeks pay in exchange for releasing any claims of pregnancy or gender discrimination as well as FMLA.

Instead, Ms. Shultz hired an attorney. Once the attorney notified the synagogue of her claims, her  employment was “reinstated.” Ms. Shultz claimed that following the reinstatement, she was subjected to discrimination such as: announcing that the temple’s congregation had the right to disapprove of her pre-marital pregnancy; removing her name from the temple’s newsletters and employee lists; requiring her to finish up tasks as though she was being fired on the original date; and given the silent treatment by the rabbi and a board member. She quit and filed suit.

The Second Circuit Court of Appeals heard the case. One of the issues was whether the rescinded termination could qualify as an “adverse action” essential to claims under Title VII and FMLA. The court of appeals found that indeed it was an adverse action based on language from a prior Supreme Court decision. For statute of limitations purposes, notice of termination begins to toll when “the operative decision was made-and notice given-in advance of a designated date on which employment terminated.” By extension, an adverse action begins when notice was given.  The amount of damages could however be reduced by the reinstatement a couple weeks later. The trier of fact would have to determine whether it was good faith offer. The two week time period between termination and reinstatement was enough for Ms. Shultz to feel the loss of her job at a vulnerable time.