FMLA FAQ: When Employee on FMLA Leave Indicates They Will Not Return From FMLA Leave, What Should an Employer Do?

Posted by Jeff Nowak on June 22, 2012

woman_pregnant_child_stomach_brother_sister.jpgHere's a question from the client inquiry line this past week, and it pops up often enough that I figured I would share:

Q:  An employee on maternity leave contacted us two months into leave that she will not be returning to work at the end of FMLA leave (which now is one month away).  Is her employment terminated immediately?  And can we recover any health care premiums we paid during her leave?

A:  The question above raises two issues: 1) What are the restoration rights of an employee who has informed you they will not return after FMLA leave? and 2) Can the employer recover its share of health care premiums paid during FMLA leave?

Restoration Rights

As we know, employees generally are entitled to be restored to the same or equivalent position upon return from leave under the Family and Medical Leave Act.  However, in this fact scenario, one important exception applies.  Under the regulations:

If an employee gives unequivocal notice of intent not to return to work, the employer's obligations under FMLA to maintain health benefits (subject to COBRA requirements) and to restore the employee cease. However, these obligations continue if an employee indicates he or she may be unable to return to work but expresses a continuing desire to do so.  (My emphasis, not the DOL's.)

When do the employer's obligations to maintain health benefits and restore the employee cease?  Immediately.  According to the regulations, an employee's FMLA rights effectively end where they have provided uneqivocal notice (defined by Merriam-Webster as "leaving no doubt") that they will not return.

Recover Health Care Premiums

Under the regulations, the employer may recover its share of health plan premiums during a period of unpaid FMLA leave from an employee if the employee fails to return to work, unless the reason for not returning to work is due to, among other things, "circumstances beyond the employee's control.  The Department of Labor makes clear that this phrase is "necessarily broad" and includes a situation where the employee chooses to stay home with a newborn child who has a serious health condition.  However, the DOL acknowledges that this caveat clearly does not cover a situation where the employee chooses to stay home with a "well, newborn child."

Beware of Treating Employees Differently

Although employers technically have the right to recover health care premiums from a mom who voluntarily decides not to return to work, should they recover them?  On one hand, the decision may be based on company culture and business priorities.  On the other hand, might the recovery of premiums in these situations open the employer up to a claim of gender discrimination?  Do you do this for all employees who do not return after FMLA expires?  Recovering premiums only from the mom who chooses not to return might be inadvertent -- and bad -- evidence of gender discrimination.  A theory perhaps, but what do you think?  Post a comment below.   

Requiring Employees to Return to Work With No Restrictions or To Be "100% Healed" is a Huge Risk for Employers

Posted by Jeff Nowak on May 10, 2012

100.jpgThere must be something in the water.  Over the past few months alone, I have reviewed a number of employers' policies and correspondence regarding an employee's return to work from a leave of absence.  What has been surprising to me is the number of employer policies that require an employee to return from leave with "no restrictions" or "100% healed."  Consider the following requirement, which was embedded in an employer's return to work notice at the conclusion of FMLA leave:   

As your FMLA leave is nearly exhausted, we expect you to return to work on April 2, 2012 with a note from your physician stating that you are able to work with no restrictions.

Or take this one, which a third party administrator proposed to one of my clients for use in correspondence sent with the Company's FMLA Rights and Responsibilities Notice:

In addition, [the Company] cannot accept light duty restrictions upon your return to work.  If you are unable to return to work without restrictions, you must remain on leave until you are able to return without restrictions.

¡Ay, caramba!  Really?

What's the Problem with a "No Restrictions" Approach? 

When employers require that employees be 100% healed or have no restrictions upon their return to work, the far majority of courts have found that these policies discriminate against employees with disabilities who may be able to perform the essential functions of their position with or without a reasonable accommodation under the Americans with Disabilities Act.  To be clear, the ADA requires employers to make an individualized assessment when deciding whether an employee can return.  When employers implement a "100% healed" policy, most courts find that employers improperly bypassed the individualized assessment process.  Under these policies, the employer simply presumes that the employee is unable to perform the duties of his or her job without properly considering whether the employee’s restrictions can be accommodated. 

At a minimum, the problem with this practice is two-fold: 1) it bypasses the process requiring an employer to make an individualized assessment under the ADA; and 2) it increases the chance that the employer will have found to perceive the employee as disabled.

Not all courts feel this way, of course.  Recently, in Powers v. USF Holland (pdf), a federal appellate court found that "100% healed" policies are only problematic if the employee can show he or she is actually disabled or is regarded as disabled.  Hmmmm...that doesn't make me feel too comfortable.  Interestingly, this decision applied pre-ADA Amendments Act (ADAAA) law and regulations because the facts pre-dated the ADAAA.  However, even this conservative Seventh Circuit court warned employers:  “The risk of a [100% healed] policy is even greater, if not absolute, now that the ADAAA has changed the definition of ‘regarded as’ disabled.”

The Powers decision certainly echoes the EEOC's position, which has long held that these policies violate the ADA.  In fact, late last month, I had the chance to serve as a fellow speaker on ADA and FMLA issues at a DMEC conference with Chris Kuczynski, the EEOC's Assistant Legal Counsel and Director of its ADA/GINA Policy Division.  At the conference, Mr. Kuczynski reminded employers that they face significant risk under the ADA if they maintain a policy that requires an employee to return to work without restrictions (for the reasons stated above).     

Insights for Employers

Given the much broader regulations implementing the ADAAA, employers that still enforce “100% healed” policies or require evidence that employees can return to work “without restrictions” take on a tremendous amount of risk.  Far too much risk, in my opinion.  Therefore, employers must re-evaluate these practices and implement policies that provide for individualized assessments of an employee’s ability to return to work with or without a reasonable accommodation under the ADA.  In light of the EEOC's recent litigation in this area, this evaluation is imperative.

Naturally, this means employers also must do an effective job of obtaining medical information to which they are legally entitled so that they can make the most informed decisions about: 1) the employee's ability to return to work; and 2) whether an accommodation may help the employee perform the job.  Thus, in the context of FMLA, employers should engage in a consistent and regular practice of requiring all employees returning from FMLA leave to provide a fitness-for-duty certification from their health care provider that confirms their ability to return to work and perform the essential functions of their job, with or without a reasonable accommodation.

Stephen Colbert Takes FMLA Leave to Care for Mom; Will His "Key Employee" Status under the FMLA Deny His Return to "The Colbert Report"?

Posted by Jeff Nowak on February 19, 2012

08_colbert-pg-horizontal.jpgAccording to Forbes and other news sources, Stephen Colbert has taken a leave of absence from his late-night comedy show, "The Colbert Report," to attend to his ailing 91 year-old mother.

Only a true FMLA nerd would use this as an opportunity to explain a little-used, often forgotten rule under the Family and Medical Leave Act -- the "key employee" provision -- that actually could deny Colbert's reinstatement to his wildly popular comedy show. The FMLA allows employers to utilize this "key employee" provision to deny reinstatement to an employee who is among the highest paid in the workplace and whose reinstatement after FMLA leave creates a significant financial hardship on the employer.

Before I explain further, to all those who inadvertently stumbled upon this blog article while searching google for "Stephen Colbert," I assure you -- the man running for President of the United States of America of South Carolina most assuredly will be welcomed back to The Colbert Report once his FMLA leave ends.

But, let's suppose for an instant that we lived in the bizarro world, and Comedy Central wanted to get rid of Colbert as quickly as NBC chucked Conan O'Brien from the Tonight Show.  Could it do so under the FMLA? Under the FMLA's "key employee" exception, Comedy Central could terminate Colbert's employment so long as it could show that:

1. Colbert is among the highest paid 10 percent of all the employees working for Comedy Central.  Keep in mind two points: a) Earnings include wages, premium pay, incentive pay, and non-discretionary and discretionary bonuses; however, earnings do not include incentives whose value is determined at some future date, (e.g., stock options, future benefits or even incentives for Colbert because he reportedly is surging ahead of Buddy Roemer in the presidential polls in the upcoming Louisiana primary); and b) the determination of whether Colbert is among the highest paid 10 percent is made at the time he gives notice of the need for FMLA leave.

2. Having to reinstate Colbert would cause substantial and grievous economic injury to Comedy Central's operations.  This is an overwhelming standard for any employer to meet, and the FMLA regulations even note that this test is significantly harder to establish than the “undue hardship” test under the ADA.  In short, the only real guidance the regulations give employers is not much in the way of guidance at all:

A precise test cannot be set for the level of hardship or injury to the employer which must be sustained.  If the reinstatement of a "key employee" threatens the economic viability of the firm, that would constitute "substantial and grievous economic injury."  A lesser injury which causes substantial, long-term economic injury would also be sufficient.  Minor inconveniences and costs that the employer would experience in the normal course of doing business would certainly not constitute "substantial and grievous economic injury."  29 C.F.R. 825.218(c)

In other words, an employer has to show it would be in a world of hurt because of a key employee's reinstatement after FMLA leave.

Notice to "Key Employee" is Critical

Even if the employer can satisfy the above factors, the employer still must provide the employee written notice at the start of FMLA leave explaining the potential consequences with respect to reinstatement and maintenance of benefits.  If the employer fails to do so, it cannot deny reinstatement.  Once the employer makes a determination that substantial and grievous economic injury will occur to its operations, the employer must provide notice to the employee, including the determination that the employee’s reinstatement will cause such injury, and the basis for the determination.  If the employee already has begun FMLA leave, the employer still must provide FMLA leave but allow the employee a reasonable period to return to work in lieu of additional FMLA leave.

If the employee does not return after receiving this notice, he or she still is entitled to take FMLA leave.  Upon the employee's return from FMLA, the employer must again assess whether substantial and grievous economic injury will occur to its operations if the employee is reinstated. If the employer finds that this injury still will occur, the employer must deny reinstatement in writing and, like before, provide the basis for the determination.  Keep in mind: the "key employee" provision of the FMLA does not allow the employer to deny FMLA leave, but only to deny reinstatement.

Of course, as to Colbert himself, this is simply a hypothetical from the bizarro world.  We look forward to Stephen Colbert's return to his rightful place at The Colbert Report -- and making us laugh on the presidential campaign trail.

Lessons From The Jewel-Osco / EEOC Settlement

Posted by Bill Pokorny on January 06, 2011

shopping cart iStock_000007182089XSmall.jpgOn January 5, the EEOC announced a $3.2 million settlement in a lawsuit against Jewel-Osco parent company Supervalu Inc., alleging that Jewel-Osco fired disabled employees at the end of medical leaves rather than returning them to work with reasonable accommodations. (Details are available in the Chicago Sun Times, and the EEOC has issued its own press release.) The settlement does not constitute an admission of liability by the company, and as reported by the Sun Times Supervalu denied any wrongdoing.  Moreover, the Company issued its own statement, affirmatively expressing its commitment to hire and accommodate individuals with disabilities.  According to Supervalu, it chose to settle the case to avoid litigation costs and put the matter behind the Company so that it could focus on current business initiatives. 

While this lawsuit was brought under the Americans With Disabilities Act rather than the FMLA, employees frequently attempt to return from FMLA leave with medical restrictions, forcing employers to decide whether they are capable of doing the job. Whether or not there was merit to the EEOC's claims, this case is a prime illustration of how important it is for employers to actively consider reasonable accommodations for employees returning with medical restrictions, and to document that they have done so. 

The consent decree governing the settlement requires Jewel-Osco to take a variety of remedial measures in addition to the monetary settlement. While some of these measures, such as mandatory compliance reporting to the EEOC, will no doubt be burdensome, some aspects of the consent decree can be seen as useful "best practices" for employers who wish to avoid seeing their names in a future EEOC press release. 

For example, the decree requires Jewel-Osco to engage a consultant to review and recommend changes to its current job descriptions to ensure that the descriptions accurately state the physical requirements of the job. While a consultant may not be necessary, accurate and up-to-date job descriptions are a crucial tool for employers, both in making decisions about whether and how to accommodate an employee's medical restrictions and in defending such decisions in the event of litigation. 

The decree also requires Jewel-Osco to obtain recommendations from the consultant regarding possible accommodations to common work restrictions in various positions within the store. Particularly for larger employers, working with a qualified expert in advance to determine whether and how common restrictions can be accommodated can be extremely helpful both in ensuring that employees are accommodated when required and in defending ADA claims from employees who could not be accommodated. 

Under the decree, Jewel-Osco is also required to revise its communications with employees who are attempting to return from a leave of absence to "assure them that they need not be 100% healed in order to be considered for a return to work ...."  Although the EEOC's preferred wording for such notices may not be optimal from the employer perspective, employers should be careful to avoid the use of terms such as "full duty" or "without restriction" in reference to an employee's return to work, as these are red-flags for the EEOC and plaintiffs' lawyers. Rather, employers should - echoing the requirements of the ADA - advise employees that they will be expected to perform the full range of essential job functions for their position, with or without a reasonable accommodations. Additionally, it is often advisable to invite employees to identify any accommodations they may need to return to work, both because doing so may help identify a workable accommodation, and because an employee who fails to request any accommodation when invited to do so will have a far more difficult time asserting a claim under the ADA.

"Realignment" Of Sales Territory Defeats FMLA Claim

Posted by Bill Pokorny on June 11, 2010

In a rare move, a federal district court in the District of Columbia overturned a jury's verdict in favor of an employee who claimed that a "reallignment" of her sales territory three years earlier, while she was out on FMLA leave, ultimately led to the termination of her employment. This case illustrates a key principal under the FMLA: an employee's right to "reinstatement" following FMLA leave is not a guarantee of permanent employment. Breeden v. Novartis Pharmaceuticals Corporation.

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Employer Properly Demoted Employee Upon Return from FMLA Leave

Posted by Jeff Nowak on May 26, 2010

All too often, employers are criticized for blunders they could have avoided when taking disciplinary action against an employee with a medical condition.  However, a recent federal appellate court decision provides a glowing example of how an employer got it right when it disciplined an employee upon her return from leave under the Family and Medical Leave Act. 

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).

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