Lawsuit Alleging Pregnancy-Related Firing Stirs Controversy

A company owned by evangelical Christian radio host Dave Ramsey is disputing a former employee’s claim that she was fired because she was pregnant. 

Lawyers for the company, Ramsey Solutions, stated in a March 8 court filing that the employee was fired because she had premarital sex, according to news reports this week. Ramsey Solutions is a personal finance coaching company based in Franklin, Tennessee, with more than 500 employees.

Caitlin O’Connor, a former administrative assistant at Ramsey Solutions, alleged in a federal lawsuit in July that she was discriminated against on the basis of sex when she was fired, according to The Tennessean. In the new court documents, the company argued that O’Connor was fired not because she was pregnant, but because she wasn’t married to her partner, the baby’s father, which was a violation of the company’s “righteous living” policy. The company stated that it has fired at least eight other employees, including five men, for having premarital sex, NBC News reported. 

Ramsey Solutions was named a 2020 Inc. Best Workplaces honoree, having met objective criteria through an application and employee survey process. Ramsey has the right to manage its business in accordance with its values and the court system will determine the merits of the lawsuit. Upon learning about the company’s “righteous living” policy and how it is applied, we believe that it is incompatible with our standards of organizational excellence and have made the editorial decision to remove the company from our 2020 Best Workplaces list.

Business owners joined the chorus of online outrage over the news of the lawsuit. “I thought it was terrible, both from a leadership and empathy standpoint,” says Tom Gimbel, founder and CEO of Chicago-based staffing company LaSalle Network, which has ranked 12 times on the Inc. 5000 list of fastest-growing U.S. private companies. “The whole concept of being able to track if somebody is or is not having sex is absolutely crazy.” He adds that a company that prohibited premarital sex among its employees could seem hypocritical if it didn’t apply that same standard to its customers or to its leadership.

Under Title VII of the Civil Rights Act, discriminating against an employee for being pregnant is illegal for companies with 15 or more employees. Whether a company can legally fire an employee for having premarital sex is more of a gray area, and has led to lawsuits against religious employers that terminated unmarried employees who became pregnant. While federal law does not prohibit discrimination based on marital or familial status, some states’ laws do, says Tracey Diamond, a labor and employment attorney at the Philadelphia office of the law firm Troutman Pepper. The burden is on the employee to prove that the company’s claim that she violated its policies was a pretext and that she was actually fired due to her pregnancy, Diamond says.

CEOs acknowledged that companies have a right to make decisions based on their values–and that employees are free to leave a company whose values don’t align with their own–but said this particular policy was out of step with most of modern America. 

That abstaining from premarital sex would be on a company’s list of values “seems almost unbelievable in today’s day and age,” says Carrie Kerpen, co-founder and CEO of marketing agency Likeable Media in Port Washington, New York, a three-time Inc. 5000 honoree. 

Sonia Thompson, a marketing consultant and CEO of Thompson Media Group in Wesley Chapel, Florida, questioned whether a company could reasonably fire an employee for violating a policy that wasn’t explicitly stated in an employment agreement. Ramsey Solutions does not provide a list of rules employees must follow in order to “live righteously,” according to The Tennessean. “If people can be fired based upon something, you have to give them a guideline,” Thompson says. “You have to be very clear and be consistent about your interpretation and application of these rules.”