Apology to Fired Reservist Won’t Hold Off Lawsuit : Law: Newport company says termination of a major on Gulf duty was a ‘foul-up.’ It offers job, back pay and benefits, but his attorney says that’s not enough.

Officials at a major aerospace firm apologized Wednesday for the firing of a local reservist who was serving in the Persian Gulf, and promised to give him back his job and all the back pay and medical benefits owed to him.

“We made a mistake. We recognize it, and we intend to rectify it as quickly and fully as possible,” said a statement issued by the New York office of the Loral Corp., which has aerospace plants in Newport Beach and elsewhere around the country.

Maj. Stephen McConnell and his family were out of the state on vacation Wednesday and could not be reached for comment. But the family’s attorney said that while the statement was encouraging, it would not be enough to stave off a wrongful-termination lawsuit alleging that Loral violated state and federal law protecting activated reservists from layoffs.

McConnell, 38, came home last week from nearly nine months in Saudi Arabia with a Bronze Star for his work in resupplying Army units. But he also returned with uncertainty about the status of his job as a subcontracting administrator in Newport Beach at Loral Aeronutronic.

While stationed in the Gulf, McConnell got letters first from Ford Aerospace--which sold the firm in October--and then from the new owner, Loral, telling him of his “termination” and instructing him to turn in his employee ID and report for a security debriefing.

In interviews last week, officials at Loral blamed the incident on a misunderstanding. They maintained that McConnell was not fired and that he had in fact been receiving his continued medical benefits and pay differential.

But on Wednesday the company took a different tack.

Spokesman Elizabeth Allen acknowledged that, in fact, McConnell had not been paid the difference between his military and company pay since last October or received medical coverage under the company’s insurance plan.

His daughter had been bedridden for nearly three months with a back injury, McConnell’s wife, Kim, said, and the lack of medical coverage was the sorest point in the dispute. Kim McConnell said she was forced to leave the 9-year-old girl at home--often alone--so she could continue working at a local pharmacy and keep up her own medical coverage.

“This was not the Loral way of treating people,” Allen said. “We regret the incident. . . . We want him to come back, and we’re sorry.”

Allen asserted that McConnell’s case was an isolated one.

“We have checked with every single other employee called over to Desert Storm, and this was the only one for which there was a foul-up,” she said. The company had 31 reservists nationwide called to duty.

The spokeswoman suggested that the snafu came about in part because of the transition from Ford to Loral, but she declined to elaborate.

“I’m a bit uncomfortable making excuses,” she said.

But Kevin McDermott, a local attorney and reservist who said he has been retained by the McConnell family to work on the case, offered his own explanation. He said that McConnell would have become vested in the company pension plan in May, and noted that his termination was a way for the company to avoid that prospect.

“It’s a good way to cut your employee overhead,” he said.

“It’s wonderful news,” McDermott said after hearing the company’s statement.

He said the company went further in acknowledging its responsibility than it has before. But even if McConnell does get his back pay and benefits, McDermott promised that the family still will file “a full-blown, wrongful termination tort” lawsuit against both Ford and Loral.

Federal and state law ban the firing of activated reservists in wartime except in certain circumstances, such as during broader cutbacks, and McDermott maintained that the actions of both Ford and Loral violated the law.

“They’ve got an obligation to treat people like Steve fairly and honestly, and you don’t put someone through what McConnell went through to save a few bucks,” McDermott said.