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A jury in Texas hit cosmetics giant Mary Kay Inc. with an $11.2 million verdict, including $10 million in punitive damages, for firing a sales manager disabled by cancer, who, the company contended, was not an employee but an independent contractor. Plaintiff’s counsel Angela Alioto said the judgment is the first of its type in the United States and is a significant first step toward extending some workplace legal rights to sales contractors. “This verdict means the 920,000 alleged independent contractors working for Mary Kay have their civil rights,” asserted Alioto of the Law Offices of Joseph L. Alioto and Angela Alioto in San Francisco. “If they get sick, they have a remedy. They can take a leave.” Woolf v. Mary Kay Cosmetics, No. 00-5612-J (Dallas Co., Texas, Dist. Ct.). The case was brought by Claudine Woolf, who began selling Mary Kay products in 1995. In January 1997 Woolf attained the rank of “Fabulous 50s director” for assembling a 50-person sales organization at the age of 27, according to court documents. Her company car was upgraded to a cherry-red Pontiac Grand Am, and, according to Alioto, she stopped selling directly and switched to managing her sales team full time. In March 1997, Woolf learned that she was pregnant. Two weeks later she was diagnosed with an aggressive form of breast cancer. Doctors told her that she required a mastectomy followed by chemotherapy that could kill the fetus or cause birth defects and would probably make her sterile. Woolf and her husband chose to continue the pregnancy. Although she gave birth two months prematurely, she and the baby are now healthy. Although Woolf was, according to her description, “sick and bald and pregnant,” she continued running her sales operation from her hospital room, but could not meet sales quotas. According to plaintiff’s documents, Woolf called Mary Kay headquarters in September 1997 asking for a reprieve from the sales goals. Mary Kay managers denied the request and a month later took away her company Pontiac Grand Am from in front of her parents’ home. Woolf filed suit in Contra Costa County, Calif., in 1998, claiming that she had been wrongly fired because of a medical disability. Mary Kay prevailed in having the case moved to Dallas, where it is headquartered. After a two-week trial, the jury found that Woolf was a Mary Kay employee and the company “acted with oppression or malice” by refusing to accommodate her illness. Alioto argued that, despite an agreement Woolf signed with Mary Kay stipulating she was a contractor, and federal tax filings as an independent contractor in 1995 through 1997, she was an employee managing a sales organization under the direction of Mary Kay. Alioto expects Mary Kay to appeal. Defense counsel Ellen L. Perlioni of San Francisco-based Littler Mendelson’s Dallas office declined to comment, other than to say the case is pending.

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