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Published: 2008-03-26

Walking the FMLA Termination Tightrope

With the enactment of federal and state statutes related to leaves of absence, employer discretion to terminate employees on leave has eroded considerably. Employees are protected against discrimination for exercising their rights under the federal Family and Medical Leave Act ("FMLA"), so that employers cannot use the taking of FMLA-qualified leave as a negative factor in any employment actions, such as promotion, discipline, layoff or termination, whether for cause or for any other reason. The FMLA clearly provides that any employee who asserts rights under the statute has no greater rights to reinstatement or other benefits and conditions of employment -- including continuing employment -- than if the employee had never requested or taken the leave. An employer may terminate an employee regardless of leave status provided that there is a legitimate, nondiscriminatory reason for termination.

In FMLA discrimination cases, which most courts have generally evaluated under the McDonnell Douglas-Burdine burden-shifting analysis applied in cases brought under Title VII of the Civil Rights Act of 1964, the burden of proof is ultimately on the employer. They must demonstrate that the employee would have been terminated or laid off despite having taken an FMLA-qualified leave. Many employers have been justifiably cautious about terminating any employee exercising rights under the FMLA. Over the past several years, the courts have provided considerable guidance on the layoff and termination of employees who have exercised their FMLA rights. While employers need to examine carefully the individual circumstances of each termination, the courts have upheld the right of employers to terminate employees for legitimate, nondiscriminatory reasons unrelated to the exercise of rights under the FMLA.

As a preliminary matter, it is important to bear in mind that the FMLA applies only to employers and employees who meet the qualifications specified in the Act. Otherwise, a court will lack jurisdiction over any claim under the FMLA. Not every leave will be protected under the FMLA. An eligible employee is guaranteed leave under the FMLA only in qualifying circumstances such as birth or placement of a child, care of a child, spouse or parent with a serious health condition, or in the event of the employee's own serious health condition. The FMLA specifically defines a serious health condition as rendering the employee incapable of performing the duties of the job or involving a medically necessary regimen of continuing treatment. If these prerequisites have not been strictly met, then the leave -- and any claim resulting from an adverse employment action associated with it -- will not be covered under the FMLA.

Before an employer can safely exercise its right to terminate an employee for legitimate, non-discriminatory reasons unrelated to the taking of FMLA leave, it is important to confirm compliance with the notice requirements under the FMLA. A covered employer is required to provide notice to employees of their rights and obligations under the FMLA by posting notices in a conspicuous place in work areas and by including a detailed notice and explanation of FMLA rights in any employee handbook. An employer's failure to provide such notice may excuse any failure on the part of an employee to provide notice to the employer of a request for FMLA leave.

More important is the requirement that employers designate leave as FMLA leave. When an employee provides sufficient information to put the employer on notice that the leave may be protected under the statute, the employer should confirm that the leave is qualified under the FMLA. In all circumstances, it is the employer's responsibility to designate leave as FMLA-qualifying and to specify that the time off will be counted against the employee's annual FMLA leave entitlement. The FMLA regulations require that the notice of the designation must be given to the employee promptly -- generally within two business days -- and confirmed in writing by the following pay day. It is an employer's duty to inform the employee that the leave will count against the bank of available FMLA leave time. Under the regulations, if an employer fails to give notice of FMLA designation, then the leave cannot be counted against the employee's FMLA leave entitlement. Any adverse action taken as a result of the employee's continuing absence could be a violation of the FMLA.

Not all the notice requirements of the FMLA burden employers. An employee must provide 30-days notice before taking an FMLA covered leave, or as much notice as is "practicable." If an employee fails to provide timely notice, the leave may be unprotected by the FMLA. This is key in intermittent leave situations, where lack of notice may be particularly disruptive to an employer's operations.

If all the notice requirements have been met, an employee is entitled to a maximum of 12 weeks of leave under the FMLA and no more. The courts have adhered to this bright line test, although employees have looked also to the Americans With Disabilities Act for reasonable accommodations involving longer leaves of absence. In Nunes v. Wal-Mart Stores, Inc. (D.N.Cal. 1997), the court granted summary judgment to an employer, holding that an employee was lawfully terminated from her position as a sales associate during an extended medical leave due to fainting episodes that caused her to black out and lose consciousness without warning. The employee exhausted her 12-week FMLA protected leave, but was forced to remain on leave due to her condition. The court held that under the FMLA the employer was required to hold open an employee's position for 12 weeks and no more. Because the employee was subject to passing out without warning, the court found that she was unable to perform the essential functions of her job, with or without accommodation, so she could also be terminated lawfully under the ADA.

Employees who are poor performers may be terminated in spite of their FMLA leave status. If an employee would have been terminated regardless of FMLA leave because of poor performance, then the employee may be terminated before, during or after an FMLA leave. In Richmond v. Oneok (1997), the Court of Appeals for the Tenth Circuit affirmed summary judgment for an employer, holding that a secretary was lawfully terminated following FMLA leave where her supervisor had documented 15 instances of poor work performance in the three years prior to her termination. The fact that the employee did not receive any counseling regarding her performance did not demonstrate that she was terminated for any reason besides poor performance. Similarly, in Hubbard v. Blue Cross Blue Shield Assoc., (N.D. Ill. 1998), the court held that an employee was lawfully terminated on her return from FMLA leave where, prior to the leave, she had failed to meet the goals of a corrective action program designed to improve her performance. Employers may also terminate employees who are out on leave, based on an infraction or poor performance that comes to the employer's attention during the leave. Moreover, employees who engage in insubordination, fraud or other prohibited conduct while out on leave may be discharged in spite of their FMLA leave status.

The cases reveal that it is important to keep thorough documentation of an employee's performance record so that the reason for a termination can be demonstrated to a court, particularly in light of the employer's burden to prove that the employee would not have been reinstated to their former position despite the FMLA leave. In Hillman v. Hamilton College (N.D.N.Y. 1998), the court held that an employee's favorable performance review indicating that she met or exceeded expectations in all areas. This was sufficient to support an inference that her employer's assertion that she was terminated for poor performance was pretextual. Another method to call into question an employer's reasons for termination is to produce evidence of other employees who were treated more favorably than the employee who took FMLA leave in the same circumstances.

The courts have clearly held that an employee who is on FMLA leave or who has taken FMLA leave may be considered for layoff during a reduction in force so long as the employee is not chosen for layoff on the basis of FMLA leave. Particularly where a company employs a fair and honest appraisal system to designate employees for layoff, the fact that an employee is taking or has taken FMLA leave does not preclude the employer from designating that employee for layoff. Even where there is no formal appraisal system, a layoff of an employee who is on FMLA leave may be lawful where the decision to terminate that employee is based on the business' future needs and the skills, experience and expertise of the workforce.