An employer can terminate an employee while the employee is on disability, but not because of that disability. In other words, if your wife's job would have been lost at that time even if she had been there, the disability does not prevent loss of a job that would have been lost anyway. However, given what little you have posted, it seems your wife may have been subjected to either disability or pregnancy discrimination by this employer's conduct.
These kinds of cases are very fact intensive. Therefore you wife should locate and consult with an experienced employment law attorney as soon as possible to explore her facts and determine her options. I would suggest she look either on this site in the Find a Lawyer section, or go to www.cela.org, the home page for the California Employment Lawyers Association, an organization whose members are dedicated to the representation of employees against their employers.
Good luck to you and to her.
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Employers of at least 5 or more employees in California cannot discriminate against women due to their pregnancy. This, of course, means they cannot fire an employee due to pregnancy and have an obligation to attempt to reasonably accommodate a woman due to pregnancy related disabilities or limitations.
Having said that, an employer can terminate the employment of a pregnant woman for reasons unrelated to her pregnancy. So, in your wife's case, the issue may turn on what was really behind the employer's motive to fire her.
There are many facts and issues which must be looked at by experienced employment law counsel in order for your wife to get an informed legal opinion about her case and legal options. Help her find attorneys to talk to as soon as possible. You can try using the "Find a Lawyer" function on Avvo or go to the website for the California Employment Lawyers Association at www.cela.org and search for a CELA member in your area.
They say you get what you pay for, and this response is free, so take it for what it is worth. This is my opinion based on very limited information. My opinion should not be taken as legal advice. For true advice, we would require a confidential consultation where I would ask you questions and get your complete story. This is a public forum, so remember, nothing here is confidential. Nor am I your attorney. I do not know who you are and you have not hired me to provide any legal service. To do so would require us to meet and sign written retainer agreement. My responses are intended for general information only.
Your wife should call an employment law attorney to discuss. It is unlawful to harass or discriminate against an employee because of her pregnancy. In addition, there are laws that require an employer (if certain facts exist) to allow a pregnant employee to take leave based on disabling conditions related to her pregnancy in addition to leave under the Family Medical Leave Act. Many employment law attorneys offer a free initial phone consultation and may be able to help your wife at no cost to her or you. A demand letter from an attorney may be a good first step in resolving this matter.
It is unlawful for any employer with 5 or more employees to refuse to allow a female employee disabled by pregnancy, childbirth, or a related medical condition to take a leave for a reasonable period of time not to exceed four months and return to work. The employee shall be entitled to utilize any accrued vacation leave during this period of time. It is also unlawful for an employer to refuse to maintain and pay for coverage under a group health plan for an eligible female employee who takes leave. It is also unlawful for an employer to refuse to provide reasonable accommodation for an employee for a condition related to pregnancy, childbirth, or a related medical condition.
As you describe it, your wife has grounds for a lawsuit. She needs to contact an employment lawyer near her to represent her and advise her on what her rights are. Most employment lawyers offer an initial free consultation.