Even the nation's largest employers have experienced difficulty with the Family and Medical Leave Act's technical requirements for substituting paid leave for unpaid FMLA leave, and for designating and counting the substituted leave as FMLA-qualifying leave. In Cline v. Wal-Mart Stores, Inc., a May 1998 decision, the Fourth Circuit Court of Appeals (the federal appellate court for the Carolinas, Maryland, Virginia, and West Virginia) ruled that Wal-Mart violated the FMLA and the Americans with Disabilities Act when it demoted a former maintenance supervisor the same day he returned from surgery to remove a brain tumor, and then fired him two months later.
Summary of the Facts
After he was diagnosed with a brain tumor, Cline requested a medical leave of absence. His personnel manager approved the leave, and informed Cline that he would be required to use any accrued vacation time before the medical leave began. Cline was provided a "Request for Leave of Absence" form, but no notices relating to his rights under the FMLA. Cline's leave of absence, which included one week of paid vacation, began on August 4, 1994.
In mid October 1994, Cline's wife informed management that Cline would be returning to work on November 1 if his physician released him as expected. Nevertheless, the store manager was concerned that Cline might not have the stamina or mental stability to perform his job after returning from surgery. In late October, the manager hired an employee from another location to fill Cline's position. Cline returned to Wal-Mart on November 1, thirteen weeks after his leave had begun. His physician had prescribed no work restrictions, but because store management still felt that Cline's health would affect his attendance and prevent him from handling the pressure of his former supervisory position, Cline was demoted. A few months later, Cline was fired for clocking in early and waiting in an employee lounge for a meeting to begin, although another employee who had also clocked in early for the meeting was not permanently discharged, and eventually was promoted to Cline's former position.
In addition to his claims that Wal-Mart terminated him in violation of the ADA for what it "regarded as a disability" and in retaliation for contesting his demotion, Cline alleged that Wal-Mart violated the FMLA by failing to reinstate him to his former position when he returned from his medical leave of absence. The Fourth Circuit agreed with the trial court that Wal-Mart violated both statutes, but concluded that the jury's damage award of over $688,000 was "excessive," and ordered it reduced in part.
Reinstatement Issue
On the reinstatement issue, the company argued that the week of accrued vacation that Cline took before his medical leave commenced should be counted as part of his 12-week FMLA entitlement. Since Cline had been out of work for 13 weeks, Wal-Mart claimed, his FMLA leave entitlement had expired the week before his return. Thus, Wal-Mart argued, it did not have to reinstate Cline because he had failed to return to work prior to his exhaustion of FMLA-protected leave.
Rejecting these arguments, the Fourth Circuit concluded that while employers have the right to require employees to substitute paid leave or accrued vacation for FMLA leave and then designate the substituted leave as FMLA leave, Wal-Mart had failed to properly inform Cline that the accrued vacation he took before his surgery was to be designated and counted toward his 12-week FMLA leave entitlement. In the absence of proper notice, the court held, Cline's FMLA "clock" did not begin running until the end of his week of vacation. Thus, his reinstatement rights were protected for a week's vacation plus 12 weeks of FMLA leave.
Employers Must Give Notice Vacation will be Substituted for FMLA Leave
As Cline demonstrates, merely implementing an FMLA policy or informing an employee that the employer may require substitution of paid leave is not enough. When an employee requests leave for a serious health condition or other FMLA-qualifying reason, the employer must generally inform the employee within 48 hours that his or her accrued paid leave will be substituted for FMLA leave, and that the paid leave will be designated as FMLA leave and counted toward the employee's 12-week entitlement. Otherwise, the FMLA entitlement will not be reduced until the employee's paid leave expires -- which can tie an employer's hands while an employee takes far more leave than the employer has authorized or its policies would normally permit.
Employers Can Require a Medical Certificate for Return to Work
If an employer is concerned about an employee's ability to safely perform his job upon returning from FMLA leave, what can it do to protect its business interests and deny reinstatement? Under the FMLA, several steps may be available:
- reinstatement may be denied until the employee provides a fitness-for-duty medical certification, as long as the employer informs the employee of such a requirement in its initial FMLA designation notice to the employee, or
- if an employer suspects that the employee's serious health condition may also be a disability protected by the ADA, the employer may require a return-to-duty physical examination or functional capacity evaluation to insure that the employee can perform the essential functions of the former job or an equivalent job. (The Fourth Circuit approved of this practice last September in Porter v. United States Alumoweld Company.)
Additionally, reinstatement may be denied for various non-health-related reasons. For example, if an employer eliminates the position of an employee on FMLA leave as part of a reduction in force, the employer is not required to reinstate the employee upon the conclusion of his or her leave. Employers also may deny reinstatement if an employee on leave clearly tells the employer that he or she will not be returning to work, or if leave was obtained fraudulently.