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An Internet executive for Stamford, Conn.-based Cendant Corp. won the richest Family Medical Leave Act (FMLA) award in state history, and possibly the nation, in an administrative ruling issued Sept. 18. Kim Persky, a Princeton and Stanford-trained marketer, was earning $136,038 on Jan. 25, 1999, the day her baby was born and her family leave began. She had begun working for CUC International, a Cendant predecessor, in 1989, the year she earned an MBA from Stanford, and held a number of high-level marketing jobs for the company in the United States and England, supervising ambitious sales operations. The project she was working on at the time her medical leave began was the Internet service Sidewalk.com, which creates city-specific guides to food, entertainment and cultural events. In a 1998 deal with Cendant, Microsoft Corp. took an option to buy Sidewalk, while budgeting some $30 million a year for the project, and expecting $55 million to $60 million in annual revenues. NO EQUIVALENT POSITION The money wasn’t flowing in, in part due to friction between Cendant employees and Microsoft, according to the detailed findings of Lee Ellen Terry, an administrative hearing officer for the state Department of Labor who ruled in Persky’s favor. Persky’s Cendant boss described Persky’s Microsoft counterpart in the joint venture, Peter Atkins, as “a miserable and difficult individual.” His opposition to bonuses for the sales force caused low morale in the 300-employee project. Terry found it undermined Persky’s role by increasing Cendant’s duties without any increase in income. Persky favored a sale of the troubled project to Microsoft under the venture agreement, and a restructuring was underway when she took her family leave under the state act. In March, Persky was told her Sidewalk job had been eliminated in the restructuring — she could take a lesser position or explore a severance package. She was initially offered, but was never paid, two weeks’ pay for every year of service. Instead, she explored some of the four vice president jobs purportedly offered in telemarketing and small business travel, but she was not offered a position equivalent to her old job. Persky’s stock options and bonuses would become less valuable if she agreed to resign, as Cendant argued she had in July 1999. The bonuses and stock options later became large components of Persky’s award under Terry’s proposed decision, which still can be rejected, modified or approved by the state labor commissioner. In addition, because Persky has a parallel case pending in federal court, she is planning to petition for double damages there, under the 1993 federal FMLA. STRICT LIABILITY STANDARD Persky’s case was handled by Jeffrey S. Bagnell, of New Haven, Conn.’s Garrison, Levin-Epstein, Chimes & Richardson, as well as state Labor Department attorney Heidi Lane, in the state agency’s wage and workplace standards division. William Anthony, of Jackson Lewis, and Kirsten Hotchkiss, vice president of Cendant’s legal department, represented the company. Initially, Cendant argued in a footnote that Persky took 17 weeks’ leave instead of the allowed 16, but the hearing officer concluded she was including other paid leave, and that her family leave claim was viable. Jonathan Yee was selected to perform Perkins’ work while she was on maternity leave and was assigned her job permanently in a Feb. 2, 1999, transition agreement issued just days after her departure. Hearing officer Terry determined that Perkins was entitled to her old salary and stock options, plus the same bonuses extended to Yee. She found Atkins’ testimony that Perkins was allegedly incompetent to be “unpersuasive and self-serving,” whereas Perkins’ and her witness’s testimony was “credible and worthy of great weight,” Terry determined. Indeed, the only negative comments about Perkins that Terry found significant was the notation in her final performance review that “she had an edge and could have been nicer” when attacked. She got a 7 percent to 9 percent raise at that point. The state FMLA, Terry wrote, imposes a strict liability standard on an employer who interferes with an employee’s right to reinstatement. Although Cendant contended it told her of four other positions, Terry determined only one was actually offered, and Persky was justified in refusing it because “it was not substantially equivalent in terms of status and responsibility.” With the aid of forensic accountant Sheldon Wishnick, of Newington, Conn., Persky established damages of $496,344, excluding attorney fees, and is entitled to interest dating back to Oct. 15, 2001, Terry found. In its post-hearing brief, Cendant said the ruling attempts to ignore business events within Cendant that affected everyone and had nothing to do with Persky’s leave of absence. It criticized her competence and credibility, contending she was obligated to take one of the four jobs to mitigate damages. Bagnell, Persky’s lawyer, said the standard of review is high, and requires a finding that the hearing officer’s decision was arbitrary and amounted to an abuse of discretion.

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