The Facts

Plaintiff Perry Picarazzi, a customer service representative for John Crane, Inc.(JCI), had a history of alcoholism, and his alcohol problems clearly led to absenteeism problems in March 2008.  As a result, he was issued a number of "points" under JCI's attendance policies, which led to progressive discipline.  However, JCI failed to issue this course of discipline until the day it also issued a final warning to Picarazzi, which occurred mere days before his termination in late June 2008.

Picarazzi remained in the rehab facility until April 23, at which time he was discharged.  Although the treatment facility released him to work on April 24, his doctor returned him to work with no restrictions nearly a week later, on April 30.  Due to relapses, Picarazzi returned to the rehab facility from April 30 to May 8 and then from June 9-15.  On many days between and after these periods through his termination, Picarazzi was absent from work, apparently as a result of his alcoholism. 

In a nutshell, JCI considered the periods when Picarazzi was in actual treatment as FMLA leave, and as a result, no absentee points were assessed against him.  However, the Company did assess absentee points for some of the days when he claimed to be on FMLA leave but not actually undergoing treatment at a rehab facility. 

The Court's Ruling

As for FMLA leave relating to substance abuse, the FMLA regulations clearly state that:

FMLA leave may only be taken for treatment for substance abuse by a health care provider or by a provider of health care services on referral by a health care provider. On the other hand, absence because of the employee's use of the substance, rather than for treatment, does not qualify for FMLA leave. 19 C.F.R. § 825.119(a). 

In light of these regulations, JCI argued that it assessed absentee points against Picarazzi on those occasions when he was not enrolled in a rehab program or under his doctor's care.

For a number of reasons, the Court disagreed with JCI.  First, the Court found that a employee need not be enrolled in a rehab institution every day that he was on leave in order to qualify for FMLA leave.  As such, some of the other days Picarazzi was absent may also have been considered FMLA leave.  Second, it held that a jury could find that JCI made representations to Picarazzi that he was on approved FMLA leave through late June, the time period in which he was terminated.  Separately, the Court found that JCI did not warn Picarazzi of the consequences of failing to provide adequate medical certification of his serious health condition.  As a result, the Court determined that a jury should decide whether JCI violated the FMLA.

Insights for Employers

• Although substance abuse itself is not protected by the FMLA, this decision blurs the lines a bit between substance abuse and treatment for that abuse.  In fact, the Court did not seem moved at all that several of Picarazzi's absences seemed to relate to his "abuse" as opposed to his "treatment" of it.  Let this decision be instructive to employers:  When an employee seeks FMLA leave as a result of alcohol or drug related issues, employers should closely analyze all the leave time involved so as to avoid incorrectly designating FMLA leave.
• Employers, sober up!  Miscommunication is a killer.  Clearly, the court refused to dismiss Picarazzi's case at least in part because the employer mistakenly represented to him that "his job would be protected until the 12 week period of leave to which he was entitled under the FMLA expired on June 23, 2008."  Why would the employer communicate such a broad period of leave when the date of return was unknown, and at that point, looked like it may only be four weeks in length?  At a minimum, JCI's communications confused Picarazzi, leading him to believe that he was entitled to more FMLA leave than he may otherwise have been entitled to. 
• Be consistent with discipline.  The Court smelled something funny when JCI failed to notify Picarazzi of multiple disciplinary warnings until days before his termination.  A wise lesson: federal judges don't like when you stack stale discipline at the end of employment and then terminate days later! With respect to discipline, employers all to often get tripped up when they fail to treat an employee on FMLA in the same manner it would treat any other employee.  Timing matters!  When you have a legitimate reason to discipline an employee, whether or not the FMLA is involved, do so in a timely manner.  Employers who wait seem to always pay the price.

Last month, the 11th Circuit Court of Appeals found that a drug company did not violate the FMLA when it demoted a top-level executive upon her return from maternity leave for performance deficiencies unrelated to her FMLA leave.  Schaaf v. SmithKline Beecham Corp. d/b/a GlaxoSmithKline (pdf).

Plaintiff Ellen Schaaf served as a regional vice president for GlaxoSmithKline (GSK), and after several years in this position, Schaaf’s subordinates complained about her “antagonistic and inflexible” management style, poor communication skills, and other shortfalls.  After an investigation, GSK placed Schaaf on a performance improvement plan (PIP).  Months later, while she was out on protected FMLA maternity leave, further deficiencies were discovered and she was demoted upon her return.  Schaaf sued, claiming her FMLA leave was the employer's reason for the demotion, rather than the employee complaints or her own work deficiencies.  She alleged that because GSK learned of her performance issues while she was on FMLA leave, her legally protected leave caused the demotion. In other words, according to Schaaf, but for the FMLA leave, GSK would have no reason to find out about her performance issues and demote her.

Court Ruling

The Court rejected this argument as “legally incorrect” and “logically unsound.” It reasoned that Schaaf’s reading of the FMLA would “effectively protect deficient employees from adverse employment actions, such that those workers could actually attain job security by seeking leave under the FMLA.” Such a result is “laughable,” according to the Court, which further found:

[The FMLA's] purpose is not implicated in the least if an employee's absence permits her employer to discover past professional transgressions that then lead to an adverse employment action against the employee. In such a situation, the employer is motivated not by the taking of the leave itself, but rather by prior deficiencies that, whenever they were discovered, would have prompted demotion or discharge whether or not the employee took FMLA leave."

Insights for Employers

This decision is a clear win for employers.  Moreover, the case itself is a great example of an employer taking immediate action to discipline an employee for performance deficiencies, a response which was supported by a thorough investigation into the employee’s conduct, written documentation and use of a PIP. Here, GlaxoSmithKline was able to establish quite clearly that it would have issued discipline regardless of Schaaf’s maternity leave and her exercise of FMLA rights.  Employers should follow GSK’s lead in the manner they approach their own employees’ performance problems.

Listen to our Podcast on point:  For further guidance, our May FMLA Insights Podcast provides practical advice regarding whether and when an employer can take disciplinary action when an employee’s performance deficiencies are uncovered while he or she is on FMLA leave.