In a very controversial decision, the Eleventh Circuit Court of Appeals, which governs Alabama, Florida and Georgia, rejected the Department of Labor's regulation under the Family and Medical Leave Act ("FMLA") requiring an employer to provide notice to an employee that their otherwise unpaid FMLA leave is to run concurrently with employer-sponsored paid time off, such as vacation pay, sick pay or short/long term disability.
In Cox v. Autozone, Inc., the Plaintiff, Alicia Cox, a supervisor with Autozone, took 15 weeks off when she gave birth. Upon her return, she was demoted. Cox alleged that she was entitled to 13 weeks of employer-provided paid disability leave and then 12 weeks of FMLA leave because her employer failed to notify her, as required by the FMLA regulations, that the two leaves would run concurrently. As such, she claims she should have been restored to her supervisor's position rather than be demoted.
The FMLA allows eligible employees up to 12 weeks of leave during any 12 month period due to a serious health condition, including pregnancy-related conditions. It also allows time off for birth and care of a child. The FMLA further allows the employee to elect or the employer to require use of any paid time off as part of the FMLA leave. In 1995, The Department of Labor issued regulations for the FMLA which expand upon the requirements of the statute itself. Under the regulations, an employer must notify an employee that his or her leave is to be counted as FMLA leave. Absent such notice, the leave is not FMLA leave. The employer must also notify the employee that his or her accrued paid time off will be used during that leave. Absent this additional notice, the employee's leave is unpaid and the employee is still entitled to his or her paid time off upon return to work.
In confirming that Autozone had not acted improperly when it demoted Cox, the Court held that the FMLA regulations improperly converted the FMLA's minimum of federally-mandated unpaid leave into an entitlement to an additional 12 weeks of leave unless the employer specifically and prospectively notifies the employee that she is using her FMLA leave. The Court went on to say that the FMLA statute does not suggest that the 12 week entitlement may be extended and that where an employer exceeds the baseline 12 weeks by providing not only more leave than FMLA but also paid leave, the employer should not find itself sued for violating the FMLA. Said the Court, "The regulations not only add requirements beyond those of the statute but they are also inconsistent with the stated purpose of the statute. One of the explicit purposes of the Act is to 'balance the demands of the workplace with the needs of families . . . in a manner that accommodates the legitimate interests of employers.'"
The Court's decision may be farther reaching than it first appears. The broad language used by the Court could be construed as meaning that employer's need not even inform an employee that his or her leave constitutes FMLA leave, paid or unpaid, as long as the requisite amount of time is provided. It will not be surprising if this decision is appealed to the United States Supreme Court. While the Eleventh Circuit's decision is not without practicality and constitutes a boon for employers, it runs contrary to the regulations which are controlling unless they are arbitrary, capricious or manifestly contrary to the statute. As one-sided as the regulations may be, it is difficult to say they are arbitrary, capricious or manifestly contrary to the statute.
Despite this decision, the better practice is for employers to continue advising employees that their leave will be counted as FMLA pursuant to the regulations and inform employees whether that leave will run concurrently with paid time off. In fact, employers should set forth the company's policy on this issue in its employee handbook. The Department of Labor, moreover, has provided a sample letter which makes it easy to designate leave as FMLA leave and to notify employees as to whether the leave will be paid or not.