Mothers Work Inc.: Brand Image and Accusations of Employment Discrimination
1. Mothers Work Inc. History
Mothers Works, Inc. was founded in 1982 by Rebecca Matthias. The company operated out of Matthias’ front closet in her Philadelphia home. With the commitment to “giving the customer what she wants, when she wants it” Ms. Matthias has allowed Mothers Work to increase its store base 1300% since its initial public offering in 1993, which offering was facilitated by Meridan Venture Partners, a venture capital firm. Mothers Work, Inc. had record sales, net income and earnings per share (EPS) in fiscal 2002. Sales increased 16.7% to$453.2 million, an increase attributed to the acquisition of iMaternity stores and the opening of 60 new Mothers Work, Inc. locations. The company opened 138 new shops during 2002, bringing the total location count to 909 stores. Mothers Work, Inc. believes that although the retail and global political environment remains difficult and uncertain, the corporation’s leadership, cost saving measures and strong balance sheet will position Mothers Work for future success.
Rebecca Matthias began her professional career as an architect working in the construction industry. Then when she became pregnant, she could not find professional maternity clothing. This was when Ms. Matthias recognized business maternity wear as an untapped market and started Mothers Work Inc. in order to help working women and their families find professional attire.
Ms. Matthias has been very supportive of other women entrepreneurs and has encouraged women to start their own business with statement “‘I’m a huge advocate for women starting businesses because it fits into [their] lifestyle in a lot of ways. Women need flexibility, especially women with children ….’ ”.
The Motherhood Maternity, Mimi Maternity, A Pea in a Pod and iMaternity brands are now owned by the company. This organization enjoys the cost savings associated with vertical integration and prides itself on being an efficient, “Real Time Retailer” for customers.
2. Business incident
On June 27, 2003, Rebecca Matthias, the COO of the world’s largest maternity clothing company, Mothers Work, Inc., called an urgent meeting with her top executives: Dan Matthias, Mother Work’s chairman, Sheryl Roth Rogers, vice president of marketing, Mona Astra Liss, Mothers Work’s publicity director who is responsible for the fashion publicity in print and in broadcast as long with organizing fashion shows and other activities promoting the Mothers Work maternity lines and Frank Mullay, vice president of stores.
The five administrative personnel were gathered to discuss how the company would address a recent lawsuit filed against Mothers Work, Inc. by a former district manager, Cynthia Papageorge. Frank Mullay, the company’s vice president of stores ordered Jan Dowe – Cynthia Papageorge’s Supervisor to terminate Papageorge on the ground of her pregnancy. Jan Dowe refused to fire Papageorge because this action would be illegal. However, Ms. Papageorge was released just six months after returning from maternity leave because of a shoulder injury which was not relevant to her pregnancy. Papageorge has accused Mr. Mullay of firing her three years earlier because of her gender and pregnancy. Beside this case, Mothers Work, Inc. has already settled two similar discriminatory complaints (one of which was filed by Papageorge’s boss, Jane Dowe for inadequate job performance after taking maternity leave).
Cynthia Papageorge began working for Mothers Work, Inc. in 1997 as a district manager for stores in Massachusetts, Connecticut and Rhode Island. In October of 1999, Papageorge was thirty-seven weeks pregnant with her first child when Mothers Work vice president, Frank Mullay, inspected four of Papageorge’s stores unannounced. Mullay found deficiencies in the stores’ housekeeping, made several references to Papageorge’s pregnancy and even suggested that Cynthia could not meet her job requirements as a result of her “condition.”
Mark Itzkowitz, Papageorge’s lawyer has claimed, “‘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 the other three lawsuits] were terminated for the same reason.’”
Papageorge’s case has been embraced by the media and damage to Mothers Work’s reputation. Serrin Foster, the president of Feminists for Life, declared, “‘It is mind blowing to think that a company named Mothers Work that profits from selling apparel to pregnant women would terminate[women’s employment] simply because of their maternity.’” Rebecca Matthias is renowned for her support of women in the workplace, as her company was founded on the premise that women can be both professionals and mothers.
On June 26, 2003, Cynthia Papageorge filed a lawsuit against Mothers Work, Inc. for gender and pregnancy discrimination. Therefore, Mothers Work, Inc. had to face with responding to the lawsuit as well as protecting its reputation from negative publicity.
Though Mothers Work, Inc. is the world largest company of maternity clothing, there was no Corporate Communication division exists at Mothers Work. Many of the communications tasks were undertaken by Rebecca Matthias and Publicity Director Mona Astra Liss.
3. Pregnancy Discrimination and Protection
Since 1950, the increase in the percentage of working women has been overwhelming. In1999 about 60% of females 16 years of age and older were in the workforce, an increase of 20% since the turn of the 20th century. Women also accounted for 85%of the total increase in the number of workers with more than one job for periods between 1989 and 1999. Labor force participation for women continues to be highest in the 35-44 age groups.
Women are working harder as with all Americans. The average full time worker works about 43 hours per week. For married working women, the amount of hours increased from 41 hours in 1989 to 46 hours in 1998.
In addition, women also have to take care of their families and so in a way, they are working “double shift.” Balancing between a career and a family can be difficult. As the number of women entering the workforce continues to rise, more businesses are offering services and information to help women find jobs or to better their understanding maternity rights. A good example of such an information source would be “The 100 Best Companies for Working Mothers List 2003”, a magazine published by Working Mothers.
Despite the protection offered by the legal system against pregnancy discrimination in the workplace, the number of pregnancy-related discrimination cases is on the rise. Pregnancy discrimination complaints nationwide jumped 10 percent last year to just over 4,700 cases, according to the Equal Employment Opportunity Commission (EEOC). Such complaints have increased by approximately 40 percent since 1992. Lawyers, enforcement officials and workers’ advocates believe that the increase is partly a symptom of wide spread layoffs. According to Will Hannum, an Andover, Mass., attorney who represents employers in labor matters, the shaky economy has exacerbated the situation as companies try to cope with pressures that sometimes force them to choose which employees to keep on the payroll.
In order to protect women workforce as well as reduce pregnancy discrimination, some Acts was passed such as The Family Medical Leave Act (FMLA), Pregnancy Discrimination Act (PDA) and Massachusetts Maternity Leave Act (MMLA).
The Pregnancy Discrimination Act of 1978 was passed as an amendment to Title VII of the Civil Rights of 1964. The act states that “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.”
The Family Medical Leave Act guarantees employees of companies up to12 weeks of unpaid leave annually for certain medical reasons or for the birth or adoption of a child. The condition to eligible is that the employer must have50 or more employees who have worked for the employer at least 12 months and 1,250 hours in the last year. The FMLA also requires that employers reinstate employees to their former job or an equivalent job at the end of the leave, and must maintain any group health insurance coverage under the same conditions of coverage and cost-sharing arrangement as if the employee were working during the leave.
Massachusetts Medical Leave Act gives additional protection for the residents of Massachusetts (the state in which Papageorge filed her lawsuit) besides the Family Medical Leave Act. The same as the Family Medical Leave Act, Massachusetts Medical Leave Act requires that an employee on leave be restored to her previous or a similar position with the same status, pay, length of service credit and seniority as the position the employee held prior to the leave upon her return to employment following leave. In addition, the MMLA also requires that a maternity leave not affect an employee’s right to receive vacation time, sick leave, bonuses, advancement, seniority, length of service credit, benefits, plans or programs for which she was eligible at the date of her leave, and any other advantages or rights of her employment incident to her position. Besides those rights of employee after medical leave, an employee returning from the leave does not have greater rights in terms of benefits or work conditions over other employees who have been working while the prior employee was on leave. The employer is also 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.
Nothing in the MMLA shall be construed to affect any bargaining agreement, employment agreement or company policy providing benefits that are greater than, or in addition to, those required under the statute. An employer may grant a longer maternity leave than required under the MMLA. However, if the employer does not intend for full MMLA rights to
Apply to the period beyond eight weeks; the employer must communicate it clearly to the employee in writing prior to the commencement of the leave.
4. Business Incident Solving
There are some issues need to be considered in order to solve the Mothers Work incident. First is maintaining the company’s reputation amongst employees and the public. This is the most important one at the time the case had been brought out to the lawsuit and public at the same time. Mothers Work Inc. is the maternity clothing company, therefore; it is necessary to give an insurance message to employees, especially women labors. Besides, the case had been attended by the media, so the company should have some acts to answer and maintain the reputation.
Secondly, identifying stakeholders who were relevant to have proper communication methods is essential. Some stakeholders are listed in the following:
Stockholders: The image of Mothers Work Inc. could be damaged by negative media attention which leads to poor stock performance. This decrease in price could have negative effect on stockholders’ wealth then broke the stable situation of the company. Mothers Work’s stock was downgraded by analysts from “outperform” status to “neutral” in November of 2003.
Employees: Mothers Work Inc. is a maternity clothing company, and Rebecca Matthias had stated that “‘I’m a huge advocate for women starting businesses because it fits into [their] lifestyle in a lot of ways. Women need flexibility, especially women with children ….’ ”. Therefore, Frank Mullay’s act might make female workers in particular feel lack of job security because they could be terminated while they are on maternity leave. This case can also deter potential female employees from wanting to work at Mothers Work, Inc.
Customers: Mothers Work Inc. is a huge company of maternity clothing and it cannot bring good image to customers when it decided to fire female employees on the ground of pregnancy. The discrimination against pregnant women can lead customers to not want to shop in chain of store of Mothers Work.
Competition: Mothers Work is now recognized as the largest maternity clothing company in the world, and then many competitors could benefit from negative consumers’ reaction to Papageorge’s lawsuit. Bad image of company can be built after the case, which leads to the loss of customers as well as the employees, especially female employees for competitors’ company. There are many big competitors of Mothers Work such as: JC Penney, Kmart, Kohl’s, Target, Sears, Wal-Mart, Gap and Old Navy.
Business Partners: Mothers Work is a vertically integrated company, so suppliers (other than raw materials providers) are not key stakeholders in this case. There is several prospective business partners, particularly baby product manufacturers (cribs, bedding, etc.) who want to sell their products under the brand names included in the Mothers Work family. The reputation of Mothers Work is important in this situation to ensure the willingness of cooperation of their partners. Meridian Venture Partners, the venture capital firm that financed Mothers Work’s growth and expansion, may also change its relationship with the maternity clothing company based on negative press.
Women’s Rights Activists: Feminist groups could generate a great deal of reputation damage to the company if they were to embrace this issue. Group Feminists for Life has already expressed their disapproval of Mothers Work’s practices. Although these groups are small in number, they still could become vocal and be detrimental to Mothers Work sales.
Rebecca Matthias’ Board Memberships: Matthias has earned degrees from MIT, Columbia University and the University of Pennsylvania. She is the author of Mothers Work: How a Young Mother Started a Business on a Shoestring and Built it in to a Multi-Million Dollar Company. Matthias serves on the Board of Trustees at Drexel University and Hahnemann MCP Medical University and is a member of the Board of Overseers of the School of Arts and Science at the University of Pennsylvania. On September 16, 2003, Rebecca Matthias was recognized by the United States Small Business Administration at the National Entrepreneurial Conference in Washington, D.C. for her success with Mothers Work. Rebecca Matthias’s reputation when she supported for the women for their own careers is well known and respected in the business world. Therefore, this discrimination case could cause disgrace to these boards and Rebecca might be removed from them.
Thirdly, employee relations in the company must be managed.
Finally, management of corporate communication is necessary to be taken care.
For instant solution, it appeared that the best way to avoid further media scrutiny was to attempt to settle the case out of court (a method that has obviously failed to this point). . It appears that with the Papageorge lawsuit, Mothers Work, Inc. can no longer ignore that fact that several other employees have sued the company for similar discrimination. One effective way could be considered is highlighting new educational efforts on Ms. Liss’s television appearances or in one her articles because Ms. Liss has written for The New York Times, The Washington Post, People and US Weekly and has been featured on the Today Show, Oprah and E! Entertainment. She is currently working with cable television channel, TBS Superstation, to provide maternity clothing advice to pregnant women. Ms. Liss has been a very prominent individual known for promoting Mothers Work clothing and products. Moreover, Rebecca Matthias is also admired and visible leader of Mothers Work, Inc. so a statement from her in print or on television might work in solving temporary problems after the Ms. Papageorge’s lawsuit.
Besides the temporary method as suggesting above, Mothers Work must have a long – term solutions to not get involve in some cases like Papageorge’s or Dowe’s. The problems happened one part because of the lack of communication division which is professional for media as well as intra-company communication. That’s why Mothers Work needs to solve its problems with communication among employees in company. One way is improving employee relations with colleagues and supervisors through discussions, meetings and evaluations each other. These ways of communicating could happen not only by downward (from higher to lower levels of employees) but also by upward way (from lower to higher levels) as well as the horizontal way (among same levels). The aim of these methods is helping employees and employers understand more about each other, and employees might have some power to contribute to the company’s growth and ensure their future with the current job. To encourage the employees to take part in the contribution of the company, Mothers Work, Inc. might also develop a program where employees could express concerns about executive members of the company along with the full responds for their questions. This can reinforce the relationship among the employees and supervisors.
Mothers Work Inc. lacks professional skills of communication. Many of the communications tasks are undertaken by Rebecca Matthias and Publicity Director Mona Astra Liss, who were both not professors in business communication. This raised a need of education about business communication for managers and employees which could improve the effectiveness of working processes in a huge company like Mothers Work.
There are many laws and Acts were passed to protect female employees, especially pregnant ones, so it was necessary to educate the managers and the employees on the laws of employment and pregnancy rights such as some basic understanding of the Civil Rights Act, of the Family Medical Leave Act, of the Massachusetts Maternity Leave Act, of Pregnancy Discrimination Act. These basic understandings help employees protect their rights after being back from pregnancy leave or some other medical leave. The managers needed this knowledge in order to not violate the rules. Besides the basic understanding about the laws, the company could design programs or some orientation projects to guide the managers how to deal with pregnancy-related issues.
Steven Ertelt, “Maternity Store Sued for Pregnancy Discrimination After Employee Fired,”30 June 2003, <http://www.prolifeinfo.com/nat19.html>
Wharton Entrepreneurial Programs, “Profiting from Pregnancy,” <http://www.wep.wharton.upenn.edu/maternity.html>
Tom Belden, “Mother Work Includes Serving as Role Model,” 18 September2003, <http://www.philly.com/mld/inquirer/6797380.htm>
Wharton Entrepreneurship Conference, <http://www.whartonentreconf.org/wec/bios.asp#matthias>
Mothers Work, Inc., “US Small Business Administration (SBA) Honors Rebecca Matthias, President & COO of Mothers Work,” 16 September2003 <http://biz.yahoo.com/prnews/030916/phtu022_1.html>(17 November 2003)
Theo Emery, “Maternity Co. Fires Pregnant Woman,”27 June 2003,<http:// www.cbsnews.com/stories/2003/06/27/national/printable560715.shtml>(18 November2003).
Burrelle’s Information Services: CBS News Transcripts, in LexisNexis,<http://80-web.lexis-nexis.com.lib proxy.nd.edu/universe/document? _m=e32f03b65dd39d7f69819adda18510b3&_ docnum=2&wchp=dGLbVtbzSkVA&_md5= a4ecbf93dbc25c150d9cdba78c08e739>.
Steven Ertelt, “Maternity Store Sued for Pregnancy Discrimination After Employee Fired,”30 June 2003, http://www.prolifeinfo.com/nat19.html (18November2003)
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