Baena, 50, worked in the Schwarzenegger/Shriver household for more than 20 years before leaving in January.
But according to a report from Radar Online and Star Magazine, Baena didn't retire from her position, but instead was fired.
Friends of Baena tell Radar that she was "furious" with Schwarzenegger's decision to fire her after "decades of loyal service."
TMZ reports that Baena began to pursue Schwarzenegger in the late 1990s. She reportedly bragged to friends about having unprotected sex with the former California governor during the day, while the family was out. She never stayed the night.
According to TMZ, when she became pregnant, she didn’t tell Schwarzenegger that he was the father of the baby until the boy was a toddler.
She instead listed her then-husband, Rogelio Baena, as the child's father on the birth certificate.
She reportedly had the baby in October of 1997, just days before Shriver gave birth to Christopher Sargent, now 13.
When Schwarzenegger learned of the child, he was reportedly very “generous” with his support.
But according to Radar, she admitted to friends that she "finally wanted to tell the secret that she had kept faithfully for years to the world" after her reported termination.
"It was a nuclear blow-up between her and Arnold," a friend said. "Mildred took it hard."
Baena now lives in a 4-bedroom house with a pool a few hours outside of L.A. with the boy and her 3 other children.
According to TMZ, the boy, whose photos have not been released, looks very similar to his father.