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In Pereda v. Brookdale Senior Living Communities, Inc., the question before the appeals court was whether a first-year employee not yet eligible for FMLA leave had job protection when requesting leave that would begin after her eligibility date (i.e., her anniversary date).  The appeals court responded in the positive, providing protection from termination to someone who did not meet the statute’s definition of “eligible employee.”  The Eleventh Circuit, which covers Florida, Georgia, and Alabama, became the nation’s first to rule on this issue. 

The plaintiff in Pereda had become employed in October 2008 and had announced in June 2009 that she was pregnant and would be requesting FMLA leave after the birth of her child scheduled for late November 2009.  Under the FMLA, an “eligible employee” is one who has been employed for at least 12 months and has completed at least 1,250 of service during the previous 12-month period.  The plaintiff was not an eligible employee when she announced her intention in June 2009 to take FMLA leave at a later date.  Nor was she an eligible employee when the employer fired her in September 2009.

But the appeals court spun the definition of “eligible employee” and held that because the employee would have been an eligible employee at the time she actually would have taken leave, she was protected from discharge under the FMLA.  The court wrote that holding otherwise “would violate the purposes for which the FMLA was enacted,” and would create “a loophole . . . whereby an employer has total freedom to terminate an employee before she can ever become eligible.”

Perhaps the court’s most persuasive reasoning came when it cited a section of the FMLA which requires “employees” -- not necessarily “eligible” employees -- to provide employers with at least 30 days’ notice before taking leave that is foreseeable based on an expected birth.  The court concluded that a different result in the case would leave some employees in a “trap” between complying with the notice requirement (but subjecting themselves to risk of retaliatory termination), or waiting for their anniversary dates to arrive (but rendering them non-compliant with the notice requirement).

This expanded definition of “eligible employee” creates a host of unanswered questions about when certain employees are protected under the FMLA.  To wit:

• What if an 11-month employee says during Thanksgiving week that he is “leaning toward” having surgery on his trick knee after the New Year, likely keeping him on FMLA leave for a month or so?
• What if a just-hired employee says in January of Year 1 that she and her husband have applied for adoption of a Russian child, a lengthy process that will, if they are approved (a questionable proposition), necessitate their going overseas for a couple of months in the middle of Year 2.  What if the individual had shared this during the pre-hire process?
• What if an 11-month employee shares that she and her sister are deciding which of them will take three months off from work next year to care for their mother, who is scheduled at that time to move out of a nursing home?  What if the employer elects to terminate the employee the following week, and the mother dies the week after that?

Until further guidance emerges from the other courts of appeal, the prudent course for employers may be to not take adverse action against these types of employees, unless strong evidence unrelated to the FMLA supports the action.

Hofferica v. St. Mary Medical Center (E.D. Pa 2011).  Hofferica teaches employers to be responsive and accessible to employees who are absent on FMLA leave.

While taking FMLA leave to recover from surgery, the employee left a series of telephone messages with her employer providing updates on her recovery.  In one message, the employee attempted to notify the employer that her physician had recommended extending her leave by one week.  The employer never responded to any of the employee’s telephone messages.  And, when the employee did not return to work as originally scheduled, her employment was terminated.

In the end, the U.S. District Court for the Eastern District of Pennsylvania held that the employer’s failure to return the employee’s phone calls during her FMLA leave showed an “antagonistic attitude” sufficient to support the employee’s FMLA retaliation claim.

Terwilliger v. Howard Memorial Hospital (W.D. Ark. 2011). Terwilliger, on the other hand, warns employers not to be overly aggressive in communicating with employees who are absent on FMLA leave.

While the employee was on FMLA leave in this case, her supervisor began calling her on a weekly basis to determine her return-to-work date.  The employee later returned to work without objection from the employer.  But, the employee claimed that the employer had interfered with her right to FMLA leave by pressuring her to return to work before she was ready to do so.  In an initial ruling, the District Court for the Western District of Arkansas upheld the employee’s FMLA interference claim.

The court later dismissed the FMLA interference claim because, as it turns out, the employee had been released by her physician to full duty at the time she was “pressured” to return to work.  The court’s initial ruling, however, sent a warning signal to employers that aggressive communication with employees who are absent on FMLA leave can be as problematic as not communicating with those employees at all.

Adams v. Fayette Home Care (3d Cir. 2011).  Adams also addresses the issue of contacting employees who are absent on FMLA leave.  Specifically, Adams assures employers that they may wait until an employee returns from FMLA leave before disciplining the employee based on evidence discovered during the employee’s leave.

The employer, a hospice home care provider, received reports from a patient that the employee, an at-home caregiver, had been showing patients photographs of her boyfriend’s genitalia.  Naturally, the employer planned to fire the employee due to this misconduct.  But, because the employee was on FMLA leave at the time of the reports, the employer waited nearly two months until the employee returned to work before carrying out the termination.

In a victory for the employer, the U.S. Court of Appeals for the Third Circuit denied the employee’s FMLA retaliation claim, holding that there was no evidence of “sinister motive” on the employer’s part in deciding to postpone the termination until the conclusion of the employee’s FMLA leave.

Sanders v. City of Newport (9th Cir. 2011).  Sanders reminds employers that, if they deny an employee reinstatement at the conclusion of FMLA leave, the employer should be prepared to prove why the employee did not have a right to return to work under the FMLA.

In this case, the employer did not permit an employee to return to work from FMLA leave because the employee had been placed by her physician under a permanent restriction for which the employer could not “guarantee” an accommodation.  The employee subsequently sued her employer for interfering with her FMLA right to reinstatement.

Without addressing the merits of the case, the U.S. Court of Appeals for the Ninth Circuit held that the employer carries the burden of proving that an employee taking FMLA leave does not have a right to reinstatement.  The Eighth, Tenth, and Eleventh Circuits had previously reached the same conclusion.  In contrast, the Seventh Circuit has placed the burden of proof on the employee.  Because the issue appears unsettled in the courts, employers, as a precaution, should be prepared to explain why it has denied reinstatement to an employee at the conclusion of FMLA leave.

Millea v. Metro-North Railroad Co.  Finally, it is helpful to remind employers about Millea, a case discussed in a previous article in this blog.  As we noted then, Millea warns employers about a potential trend in the courts to expand the scope of the FMLA’s anti-retaliation provision.  In Millea, the Second Circuit held that retaliation claims under the FMLA should be reviewed under standards similar to the broad standards applied to Title VII retaliation claims.  Not only does this decision place a greater burden of proof on employers facing individual claims of FMLA retaliation, it also could subject employers to a widespread increase in FMLA retaliation claims similar to the steady increase in Title VII retaliation claims plaguing employers in recent years.

These five cases from 2011 could pave the way for future developments in 2012 concerning the FMLA.  By understanding and anticipating these developments, employers can ensure that they remain compliant with the law and avoid costly and disruptive litigation.

Fact Sheet #77A: Prohibiting Retaliation Under the Fair Labor Standards Act (FLSA) provides information concerning the FLSA’s prohibition of retaliation against any employee who has “filed any complaint” or cooperated in an investigation under the FLSA.  Fact Sheet #77A explains that employees are protected from retaliation under the FLSA when making a complaint orally or in writing.  It also recognizes that not only are complaints made to the DOL Wage and Hour Division protected, but that most courts have ruled that internal complaints to an employer are protected as well.  Additionally, Fact Sheet #77A explains that the FLSA’s prohibition against retaliation applies to all employees of an employer, even in those instances in which the employee’s work and the employer are not covered by the FLSA. Further, the fact sheet provides that the FLSA’s retaliation prohibition applies even where there is no current employment relationship between the parties. For example, it protects an employee from retaliation by a former employer.

Fact Sheet #77B: Protection for Individuals under the FMLA outlines the FMLA’s prohibition of retaliation against an individual for exercising his or her rights or participating in matters protected under the FMLA.  The new fact sheet also gives the following examples of prohibited conduct: refusing to authorize FMLA leave for an eligible employee, discouraging an employee from using FMLA leave, manipulating an employee’s work hours to avoid FMLA responsibilities, using an employee’s FMLA request as a negative factor in employment actions, and counting FMLA leave under “no fault” attendance policies.

Fact Sheet #77C: Prohibiting Retaliation Under the Migrant and Seasonal Agricultural Worker Protection Act (MSPA) provides information concerning the protections and enforcement procedures under the MSPA.  The MSPA protects migrant and seasonal agricultural workers and establishes employment standards related to wages, housing, transportation, disclosures, and recordkeeping. It also requires farm labor contractors to register with the U.S. DOL. The MSPA prohibits discrimination or retaliation against a migrant or seasonal agricultural worker who has filed a complaint or participated in any proceeding under the MSPA.

Full versions of the new Fact Sheets may be found at the following links:
Fact Sheet #77A: Prohibiting Retaliation Under the Fair Labor Standards Act (FLSA)
Fact Sheet #77B: Protection for Individuals under the FMLA
Fact Sheet #77C: Prohibiting Retaliation Under the Migrant and Seasonal Agricultural Worker Protection Act (MSPA)

In Millea, an employee who took intermittent FMLA leave for anxiety attacks related to post traumatic stress disorder, brought suit alleging FMLA claims of interference and retaliation and a claim of intentional infliction of emotional distress.  The employee’s FMLA retaliation claim was based on his allegations that his employer retaliated against him for taking FMLA leave by; 1) placing a notice of discipline in his employment file for a year; 2) requiring him to update his FMLA certification; 3) creating a work environment that motivated him to transfer to a lower paying job; 4) delaying approval of his bid for the lead custodian position; and 5) subjecting him to heightened managerial surveillance.

On appeal, the employee disputed the lower court’s jury instruction, arguing that the jury should have been given a broad definition of the term materially adverse employment action in regards to his FMLA retaliation claim.  The lower court had instructed the jury that an “‘adverse employment action’ is a materially adverse change in the terms and conditions of employment’’ and explained that examples include termination, demotion, loss of benefits and significantly diminished responsibilities, but not an alteration of job responsibilities or a mere inconvenience.   The lower court explicitly refused to apply the employee’s proposed definition which was based on the standard articulated in Burlington Northern & Santa Fe Railway Co. v. White, a Title VII case.  548 U.S. 53 (2006).  The Burlington Northern standard established by the Supreme Court, explains that an adverse employment action occurs when a reasonable employee would have found the alleged retaliatory action materially adverse and that a retaliatory action is materially adverse when the action would have been likely to dissuade or deter a reasonable employee from exercising his legal rights. 

The Second Circuit found that the district court’s definition was “impermissibly narrow and therefore erroneous” and agreed that the definition established in Burlington Northern should be applied to the FMLA.  The Second Circuit explained that Burlington Northern’s treatment of its anti-retaliation provision is applicable to the FMLA because the FMLA’s anti-retaliation provision has the same underlying purpose as Title VII and also has wording that is almost identical to Title VII.  Based on these similarities, the Court concluded that a materially adverse action within the FMLA “is any action by the employer that is likely to dissuade a reasonable worker in the plaintiff’s position from exercising its legal rights.”

The Second Circuit is not alone in treating the FMLA anti-retaliation provision broadly; the Fourth, Fifth, Seventh and Tenth Circuits have also applied Title VII’s definition of a materially adverse action to the FMLA.  Notably, the definition of a materially adverse action in Burlington Northern includes actions that involve a change in employment life outside of the terms and conditions of employment.  This broad treatment of a materially adverse action means that employees bringing FMLA retaliation claims have a much lower threshold to meet.  As a result, due to this expansion of the universe of adverse actions, there is potential for a greater number of claims alleging FMLA retaliation.  Employers should be aware of this FMLA standard and be conscious of strictly enforcing and promoting FMLA anti-retaliation policies and procedures.

Voluntary Wellness Programs

The law does not prohibit wellness programs, but it places limits on them.  The law permits employers to acquire genetic information as part of a wellness program, so long as it is completely voluntary and employees cannot be penalized for failing to provide such information.  Employers are also prohibited from offering money for employees’ genetic information, but money can be offered for the completion of health risk assessments, which include questions involving genetic information.  This is permitted provided it is clear that the money will be paid regardless of whether the employees answer the genetic information questions.  For example, an employer could offer a $150 incentive to employees who complete a 100-question health risk assessment that includes 20 questions at the end about family medical history and other genetic information, so long as the employer specifies that the money will be paid to all employees who respond to the first 80 questions, regardless of whether or not they complete the remaining 20 questions on family medical history and genetic information. 

Inadvertently Acquired Genetic Information

GINA has an exception for the inadvertent receipt of “family medical history.”  The EEOC, in its commentary on the final rules, extends this exception to any genetic information an employer inadvertently receives.  Otherwise an employer could arguably be held liable for the acquisition of genetic information if, for example, it overhears a conversation where one employee tells another that her mother had a genetic test to determine whether she was at increased risk of getting breast cancer (which would constitute genetic information, but not family medical history, under the regulations).  The regulations outline a number of scenarios where this exception would be applicable, including, for example, where a supervisor learns genetic information by overhearing a conversation at the water cooler; where a supervisor receives genetic information in response to an ordinary expression of concern (e.g., “How are you?” or “Did they catch it early?” asked of an employee who was just diagnosed with cancer, provided the supervisor does not follow up with probing questions likely to result in the acquisition of genetic information); or where the supervisor inadvertently learns genetic information by accessing an employee’s page on a social networking site which the supervisor had been granted permission by the employee to access.  The EEOC also provides “safe harbor” language for use when requesting health information as part of the FMLA and/or ADA reasonable accommodation process.  If the language is used, any receipt of genetic information will be considered “inadvertent.” 

Confidential Treatment Of Genetic Information

The EEOC makes clear that, once genetic information about employees is acquired, employers that possess the information must maintain it in files that are separate from employee personnel files and treat it as confidential medical records.  Genetic information can only be disclosed in limited circumstances, such as upon receipt of an employee’s written request or in response to a court order.  Although the regulations provide that genetic information placed in personnel files prior to November 21, 2009 need not be removed, the regulations prohibit disclosure in the same manner. 

Clarification Of Definitions Used In GINA

The definitions in GINA left many open questions.  It was unclear whether former employees would be covered and/or whether persons who become dependents by adoption or placement would be covered, for example.  The EEOC has answered both questions in the affirmative.  The EEOC has made clear that former employees are covered by the law.  This will require employers to carefully protect genetic information about current and former employees.  The EEOC has also made clear that persons who become dependents by adoption or placement for adoption are considered “family members” whose genetic information falls under GINA.  While adoptees may not be genetically related to the covered employee, the EEOC reasons that “the acquisition of information about the occurrence of a disease or disorder in an applicant’s or employee’s adopted child could certainly result in the type of discrimination GINA was intended to prohibit.”

The regulations also attempt to explain more fully the term “genetic test,” providing several examples of tests that constitute genetic tests under the statute (for example, amniocentesis and other tests used to determine the presence of genetic abnormalities in a fetus during pregnancy, testing that reveals family relationships, such as paternity tests, and testing to determine whether an individual has the BRCA1 or BRCA2 variant indicating a predisposition to breast cancer), as well as several examples of tests that do not constitute genetic tests under the statute (for example, cholesterol tests, tests for the presence of drugs or alcohol, and HIV tests). 

Next Steps For Employers

Employers are advised to immediately take the following steps to ensure compliance with GINA and its implementing regulations: 

• revise EEO policies to prohibit discrimination based on genetic information;
• train supervisors, human resources, and other hiring personnel regarding GINA compliance;
• conduct an audit of any voluntary wellness programs to ensure that their policies with respect to genetic information comply with GINA;
• revise any form requests for medical information to include the “safe harbor” language provided in the regulations; and
• remove any genetic information from personnel files and place it in confidential medical files.

A Department of Labor ("DOL") regulation interpreting the FMLA, which is codified at 29 C.F.R. § 825.107, enumerates the following eight factors to be considered in determining whether a firm is a successor in interest: (1) substantial continuity of the same business operations; (2) use of the same plant; (3) continuity of the work force; (4) similarity of jobs and working conditions; (5) similarity of supervisory personnel; (6) similarity in machinery, equipment, and production methods; (7) similarity of products or services; and (8) the ability of the predecessor to provide relief. However, only a handful of courts have addressed the issue of successor liability under the FMLA, and until September 27th, the U.S. Court of Appeals for the Sixth Circuit was the only federal appellate court to have ruled on the issue.

On September 27th, the U.S. Court of Appeals for the Ninth Circuit, in applying the DOL’s test, held in Sullivan v. Dollar Tree Stores, Inc.,  No. 08-35413 (9th Cir. Sept. 27, 2010), that plaintiff Christina Sullivan was not entitled to FMLA benefits because her new employer, Dollar Tree Stores, Inc. ("Dollar Tree") was not a successor in interest of her former employer, Factory 2-U. The decision is illustrative of what courts might look at when assessing whether an employer is a successor in interest of a former employer.

The basic facts of the case were as follows: Dollar Tree had purchased Factory 2-U’s leasehold of a Pasco, Washington store after Factory 2-U filed for bankruptcy, and the plaintiff, who had been working at the Factory 2-U store as a full-time store manager for over a year, was hired by Dollar Tree as an assistant store manager. The plaintiff subsequently requested FMLA leave, but because she had not been working for Dollar Tree for at least 12 months, Dollar Tree only approved some of the leave that she had requested. In determining whether Dollar Tree was a successor in interest of Factory 2-U for the purposes of the FMLA, the court considered the eight-factor test laid out in the DOL regulation.

The court noted that although Dollar Tree was operating a similar business out of the same location, Dollar Tree did not purchase any other assets from Factory 2-U other than the lease on the building, and Dollar Tree spent weeks renovating the store’s interior to meet its own design specifications. The court also noted the following: Factory 2-U’s employees were required to apply for jobs with Dollar Tree if they wanted to work for Dollar Tree, and only the plaintiff and one other employee of Factory 2-U were hired by Dollar Tree; Dollar Tree trained the employees in its own methods; and Dollar Tree employed a new store manager. The court concluded, "considering all the regulatory factors as a whole, the interests of Plaintiff and Dollar Tree, the policy goals of the FMLA, and the equities disclosed in the record," Dollar Tree was not a "successor in interest" to Factory 2-U within the meaning of the FMLA.

This recent opinion is a reminder that when merging with or purchasing the assets of another company, employers should be cognizant of the possibility that they will be considered a "successor in interest" of the other company and therefore obligated to provide that company’s employees with rights and benefits under the FMLA immediately after the merger or purchase. As shown by the opinion, any such inquiry will be incredibly fact-specific, and employers should therefore seek the advice of counsel prior to denying FMLA leave requests made by the merged or purchased company’s employees.

The NDAA expands “exigency” leave to family members of members of regular armed forces who have been deployed to a foreign country.  The military caregiver provision has likewise been expanded to allow family members of veterans to take such leave, as long as the veteran was in active service during the five years previous to the date on which he or she needs care.  However, neither the "Employees Rights and Responsibilities under the Family and Medical Leave Act" poster nor the certification forms provided on the DOL website have been modified to reflect the new law.  An employer who relies on these materials may be unlawfully denying leave to those employees who are now eligible. 
 
To avoid liability, and confusion, employers should familiarize themselves with the new law and avoid exclusive reliance on the current DOL website.   Employers are also encouraged to amend their certification forms to comply with the new law.  Finally, employers should inform their employees of their expanded rights by taking steps such as amending their postings, updating their handbooks and/or revising their written policies.

In addition to biological and adopted children, the FMLA’s definition of “son or daughter” includes foster children, stepchildren, a legal ward, or a child of a person standing “in loco parentis.”  The DOL’s recent guidance focused on the definition of in loco parentis, which has been understood to mean “in place of a parent.” 

Federal regulations define in loco parentis as those with day-to-day responsibilities to care for and financially support a child.  The DOL’s June 22 opinion, however, clarified that the definition is not intended to require that an employee standing in loco parentis both provide day-to-day care and financial support to the child.  Either factor, standing alone, can be enough to qualify that employee for leave if the employee intends to assume parental responsibilities for the child.

This clarification potentially entitles aunts, uncles, grandparents, or same-sex partners who are helping raise their partners’ adopted children, to 12 weeks of unpaid leave to care for a child who is newly adopted, born, or suffering from a serious health condition. 

While employers are entitled to request that an employee provide written documentation verifying an in loco parentis relationship when applying for FMLA leave, employers are cautioned that the DOL’s guidance requires only “a simple statement asserting that the requisite family relationship exists.”  The DOL fails, however, to give any further guidance regarding the requirements for that “simple statement.”  Employers are encouraged to contact legal counsel should any questions arise regarding an employee’s entitlement to FMLA leave based on in loco parentis standing.

This is less clear with respect to the FMLA.  Some courts have allowed juries to decide whether the plaintiff is entitled to front pay and how much should be awarded.  The Ninth Circuit Court of Appeals recently wrestled with this issue in Traxler v. Multnomah County, 2010 WL 669251 (9th Cir. February 26, 2010).  In Traxler, a county employee was discharged after he took medical leave.  He filed a lawsuit challenging the decision under the FMLA.  At the trial, the jury returned a verdict in the plaintiff’s favor that included a front pay award of $1,551,000.

The County sought a new trial and to alter or amend the judgment, arguing that it was error to submit the issue of front pay to the jury.  The district court agreed, vacated the jury’s front pay award, and instead awarded the plaintiff $267,000 in front pay.  The district court also ruled in the alternative that, even if it was not improper for the jury to calculate FMLA front pay, the award was excessive.  The plaintiff appealed this ruling.

In affirming the district court’s ruling that it was an error to submit front pay considerations to the jury, the Ninth Circuit held that, under the FMLA, front pay is an equitable remedy that must be determined by the court and not by the jury, as to both the availability of the remedy and the amount of any award.  The Court noted that its view was consistent with the Fourth, Fifth, and Tenth Circuits.  Because front pay is not among the enumerated damages under the statute, the Court concluded that “the court’s power under the FMLA to award front pay, as an alternative to reinstatement, is derived solely from the statutory provision permitting the court to award ‘such equitable relief as may be appropriate.’”  Because front pay is an equitable remedy, the Court reasoned, “it makes little sense to say that the availability of front pay is a judicial determination and the amount a jury determination.”

This decision is significant for employers because, generally speaking, juries can be extremely unpredictable with respect to remedies.  Courts generally have much more experience not only with issues of liability but also with remedies.  Placing the decision whether to award front pay (and how much) in the hands of a jury could dramatically alter the risk scenario in the event of a trial.  Although judges are not always predictable, at least they have much more experience not only with issues of liability but also with remedies, and usually are less likely than juries to be influenced by appeals to emotion.

Thus, at least in the Fourth, Fifth, Ninth, and Tenth Circuits, and “as a proxy for reinstatement,” the award of front pay in FMLA cases, including the amount, rests solely with the judge and not the jury.

The first new provision expands the right to “exigency” leave to family members of active duty service members.  Under last year’s amendments, only family members of reserve service members were eligible for such leave.  The FMLA now allows an employee to take up to 12 weeks of leave per year to deal with specified issues related to overseas military service by a family member (defined as a spouse, son, daughter, or parent).  Examples include arranging child care, making financial and legal arrangements, and counseling.  

The second new provision expands the right of employees to take up to 26 weeks of leave per year to care for a family member with a serious injury or illness incurred as a result of military service.  Under last year’s amendments, only employees who had a family member (defined as a spouse, son, daughter, parent, or next of kin) in active duty could take such leave.  The FMLA now allows family members of veterans to take such leave, as long as the veteran was in active service during the five years previous to the date on which he or she needs care.

The new leave entitlements became effective on October 28, 2009.  Employers should take immediate steps to update their leave policies, forms, and procedures to ensure compliance.  We can help.