gavel and books

Contributed article from Martha Cardi: Reed Group Chief Compliance Officer, featured in @work Magazine.

Legal action can uncover egregious errors and put yesterday’s “best practices” on the no-no list, raising red flags to guide employers around FMLA land mines.

The litigation or settlements in this article have generated substantial buzz among employee benefits professionals. Some will be covered in-depth at DMEC’s 2012 FMLA/ADAAA Employer Compliance Conference in Minneapolis on April 25 – 27. Is your FMLA program operating in compliance and minimizing risk? Managers can use the cases in this article to do an informal spot check, highlighting areas to
discuss with counsel and FMLA services providers. This article is not legal advice.

Automatic Terminations
It is now a high-risk activity to automatically terminate if an employee has exhausted all leave options and hasn’t recovered the capacity to perform the essential job functions.

“The Equal Employment Opportunity Commission (EEOC) is focusing on employers with company-wide policies or practices that result in ‘systemic violations,’” said Martha Cardi, Chief Compliance Officer at Reed Group.  In a landmark 2011 settlement, Verizon paid $20 million in monetary relief to hundreds of former employees, the largest ADA settlement in EEOC history. Verizon ended its “no-fault” attendance policy that disciplined employees up to termination for “chargeable absences.”

Verizon accepted a rigorous three- year consent decree requiring several steps to achieve ADA compliance. Verizon wasn’t the only employer forced to do an about-face on automatic terminations. Others who paid penalties under consent decrees were:

• Supervalu/Jewel Food Stores paid $3.2 million to 110 former employees who weren’t 100% recovered at the end of medical leaves of absence;

• United Airlines paid $600,000 to a group of affected reservations agents unable to return from disability leaves who then had to retire or go on extended leave;

• Sears, Roebuck & Co. paid $6.2 million to class claimants who were terminated following exhaustion of workers’ compensation benefits.

An EEOC lawsuit is in-process with Princeton Health Care System for allegedly terminating employees after exhausting FMLA leave without an interactive process to consider accommodations.

“This is counter-intuitive for employers, it feels like they are being in- consistent and opening themselves up to discrimination claims” if they offer an interactive process to some employees but not all, notes Frank Alvarez, Esq., a Jackson Lewis senior partner and DMEC Compliance Conference keynote speaker.

“But this is part of the ADA.”

Although the EEOC is hunting for systemic violations, individual cases have generated costly settlements as well.

In Cuiellette v. City of Los Angeles, a police officer was dismissed from a “permanent light duty” assignment with no attempt to evaluate his abilities when the department learned he had a 100% disability rating from a workers’ compensation claim. The settlement was $1.5 million.

Training Managers

Several cases have highlighted the importance of training managers. Even though uninvolved in the daily details of FMLA notification and documentation, a manager can turn a troubling FMLA case into an expensive litigation nightmare.

In Kara Jorud v. Michaels Stores, the plaintiff alleged interference with her FMLA rights for cancer treatment and recovery, harassment’s and threats, wrongful accusation of theft, and un- fairly grading the condition of the store she managed.

A district manager for Michaels, alleged to have caused several of Jorud’s incidents, was named in the suit. Jorud said she appealed to corporate management for relief from the manager’s alleged actions but received none. The jury awarded $100,722 in lost wages for the FMLA interference claim, and a combined $8 million in personal and  punitive  damages  for  violation of the ADA and Florida Civil Rights Act. The judge reserved the right to increase the award for lost wages up to $1 million.  Many employers focus leave management on paid benefits, and might regard FMLA—which doesn’t provide pay replacement—as having lower cost risks in litigation. Jorud v. Michael’s can lay that mis-perception to rest! A termination can generate high lost-wages damages. Alvarez also notes that even if some FMLA cases do avoid damages for lost wages, a losing employer would still pay substantial attorney fees for both plaintiff and defendant.  While  the  behavior  alleged  in Jorud v. Michael’s is clearly over the top, milder behavior can also generate litigation. Cardi warns that “Intolerance or visible frustration with leaves can create liability even if the employee receives all the leave time requested.”

This is exemplified by Terwilliger v. Howard Memorial Hospital, No. 09- CV-4055 (W.D.Ark. 2011). In this case, an employee on FMLA back surgery leave received weekly calls from her supervisor asking when she was returning to work. During one call, the employee asked if her job was in jeopardy, and the supervisor allegedly replied that she should return to work as soon as possible.

Terwilliger took the full pre approved leave, later was terminated for suspicion of theft, and sued the employer for retaliation and interference with her FMLA rights. The court dis- missed the retaliation claim based on the employer’s evidence of attempted theft by the employee. The court allowed the interference claim to go to trial, however. The court applied the “chill theory… reasoning that a chilling of FMLA rights is sufficient for an FMLA interference claim.”

The employer was within rights to investigate for theft, and the court found  the  termination  was  lawful. The supervisor was within rights in calling  the  employee  during  leave, and in asking about when she would be back—but perhaps not in the level of pressure applied.

The final outcome of the interference  claim  hasn’t  been  reported  on, but even a “win” may be expensive. To help avoid “chill theory” interference claims, Cardi advises employers to use a trained person from HR or a vendor to call employees during FMLA leaves. If supervisors or managers make those calls, they should be trained on what they can and cannot say, and about the tone of the conversation.  Murphy v. FedEx Nat. LTL, Inc., reminds employers to train managers not to make promises about FMLA claims—or statements that could be construed as promises. In this case, the employee asked her manager for an additional 30-day leave following her husband’s death.

Her manager said, “Okay, cool, not a problem, I’ll let HR know.” The employee took this as a promise, and her manager didn’t tell her about any further steps to apply for the leave. The employee took the leave, was terminated, claimed interference with her FMLA rights and invoked “equitable estoppel” requiring the employer to fulfill its promise. The Eighth Circuit Court of Appeals agreed a promise was made, and remanded to the District Court for a jury trial that may result in an award to the employee.

Family and medical leave laws may not provide pay replacement (except under  Connecticut’s  new  paid  sick leave law), but this doesn’t necessarily shield the employer from liability for interference and retaliation claims when termination occurs.

Leave Management

Leave certification is an important leave management issue for employers.

New FMLA leave requests should always be met by giving the employee the full startup packet with instructions, requirements and medical certification forms. In Branham v. Gannett Satellite Information Network, Inc., the employer failed to provide the startup packet, the employee was not informed of the requirement for medical certification within 15 days of leave request, and could not be terminated for failing to provide it.

When do employees qualify for FMLA rights? Since they can’t take FMLA leave until 12 months/1,250 hours of work, an employer might think FMLA rights aren’t protected until then—and would be wrong.

In Pereda v. Brookdale Senior Living Communities, Inc. (January 10, 2012), plaintiff Kathryn Pereda notified her employer she would be taking FMLA leave for the birth of her child on or about Nov. 30, 2009. She did not yet qualify to take FMLA leave, but she would  have  become  eligible  by  the due date. The court held that “because the FMLA requires notice in advance of future leave, employees are pro- tected from interference prior to the occurrence of a triggering event, such as the birth of a child.”

The court found Pereda’s advance notice to her employer was “protected activity under the FMLA.” The em- ployer appeared not to know that. Pereda said she was harassed, disci- plined for attending prenatal appoint- ments, and inappropriately placed on a performance improvement plan before being fired in September, 2009.

“A gentle reminder—don’t treat your employee differently after the leave request has been made,” said Jeff Nowak, Partner at Franczek Radelet PC and Cardi’s co-presenter at the DMEC Compliance Conference. That applies equally to employees with a full bank of FMLA time, those who have exhausted their leave time, and those who don’t yet qualify to take FMLA leave.

In the case of intermittent leave, where the initial certification applies to every absence, employers cannot require a new doctor’s note for each and every incidence of absence.

In Jackson v. Jernberg Industries 2010 WL 60921 (N.D. Ill. 2010), the plaintiff argued that this requirement interfered with his FMLA rights, and the court agreed. The employer didn’t produce any evidence of suspicion about Jackson’s absences, but simply defended its requirement of doctor’s notes for every absence in an intermittent FMLA claim.

Cardi notes an employer with an “honest  suspicion”  has  alternatives, however, that they can exercise in a reasonable fashion and appropriately to the case at hand:

• Call the employee at home to verify they are in recuperation;

• Speak directly with the employee to verify or clarify information about the absence;

• Call a medical provider to verify the employee appeared for the stated appointment (but ask no more than that);

• Question co-workers about their knowledge of the claimant’s activities during an absence;

• Perform surveillance of employee activities, but only in extreme cases justified by the circumstances.

One such extreme case was Douglas Rydalch v. Southwest Airlines. Rydalch, a reservation agent, worked in South- west’s Houston office, but his family lived in Salt Lake City. Due to low seniority, he had difficulty in getting time-off around holidays. He received warnings from the employer about his questionable use of FMLA.  Investigations found he took more than 35 FMLA days just before or after his previously scheduled time off, including late December, 2007.

The employer gave Rydalch two warnings before taking action. The employer then hired an independent hearings officer to conduct a hearing in which Rydalch was represented by a member of his union. The officer concluded Rydalch had violated the company’s attendance program. A Utah District Court dismissed all Rydalch’s claims, including FMLA interference and retaliation, and ADA discrimination, accommodation and retaliation.

The court stated, “Southwest’s reason for firing Mr. Rydalch—its honest belief that he abused FMLA leave—is legitimate and nondiscriminatory. An employer’s belief that an employee is misusing FMLA leave provides sufficient justification to terminate his employment if that belief is honest.” By hiring an independent hearings officer, the employer had solid proof that its belief was honest.


Legal counsel and services providers are part of every employer’s “FMLA team” and their first resource for building compliant programs, reducing risk and defending against litigation. DMEC offers this review of important FMLA cases to help IDAM professionals identify areas to review and discuss with their FMLA team.

Article contributed from ▪ @work