In recent months federal trial and appellate courts have addressed another batch of the seemingly endless interpretive issues that can arise under the Family and Medical Leave Act (FMLA) and the accompanying Department of Labor (DOL) regulations.

Fourth Circuit Reinstates Decision Requiring Supervised Waiver Of FMLA Claims.  After granting rehearing, a panel of the U.S. Court of Appeals for the Fourth Circuit reaffirmed its original view in Taylor v. Progress Energy, Inc.: the plain language of a DOL regulation stating that employees cannot waive their rights under the FMLA precludes both prospective and retrospective waivers of FMLA rights, including claims for past violations of the Act, without DOL or court supervision.  Taylor executed a release of legal claims in exchange for severance benefits when she was terminated, but later sued her employer, claiming she was improperly denied FMLA leave.  The Fourth Circuit held in 2005 that the release was ineffective as to Taylor’s FMLA claim, but granted rehearing after its decision stirred controversy and DOL filed a post-decision amicus brief criticizing the court’s interpretation.  According to DOL, it was intended to bar only the prospective waiver of FMLA rights, not the settlement of claims.  One judge changed her vote because she believed that DOL’s position reformulated the issue, but the majority reiterated that the FMLA is not an anti-discrimination law, but a labor standards law like the FLSA, which prohibits the unsupervised settlement of claims.  The Fourth Circuit criticized a contrary 2003 interpretation of the regulation by the Fifth Circuit.  Although Taylor controls only in that circuit, which covers Maryland, Virginia, West Virginia, and the Carolinas, employers should consider obtaining court approval of any settlement of an FMLA claim, for the question will likely receive continued attention for years.

Hours An Employee Was Paid – But Did Not Work – Do Not Count Toward Eligibility.  In Mutchler v. Dunlap Memorial Hospital, the U.S. Court of Appeals for the Sixth Circuit confronted the question whether hours credited as a reward, but not actually worked, count for purposes of FMLA eligibility.  A nurse who requested FMLA leave to have surgery for carpal tunnel syndrome actually fell only seven hours short of the 1,250 “hours of service” in the prior twelve months required for FMLA eligibility.  She was also paid for additional hours not actually worked through her employer’s “weekend program,” which compensated nurses who worked four twelve-hour weekend shifts in a two-week period for 68 hours of work instead of 48.  The Sixth Circuit rejected the nurse’s position that the additional paid hours should be counted as “hours of service” for FMLA eligibility because she had not worked those hours.  The court distinguished its 2004 decision in Ricco v. Potter, which held that hours a wrongly terminated employee would have worked had he not been terminated must be counted for FMLA eligibility purposes.

FMLA Does Not Protect Employee Who Submits Suspicious Medical Certifications.  Another recent Sixth Circuit case, Novak v. MetroHealth Medical Center, involved a financial counselor who was terminated for violating her employer’s no-fault attendance policy, which assigned points based on an employee’s hours of unexcused absence.  Approved absences such as FMLA leave were not counted.  After exceeding the number of points that would require discharge, Novak sought to designate a series of absences as FMLA leave, citing her own back condition and alleged serious health conditions of her daughter and newborn grandson.  She initially submitted incomplete medical certifications from a physician who, it developed, had no personal knowledge of her back condition and had not examined her recently (although a colleague had).  She also submitted certifications attempting to demonstrate that she was needed to help care for her grandson due to her daughter’s post-partum depression.  MetroHealth determined that none of the absences qualified for FMLA leave and terminated Novak.

The Sixth Circuit agreed that Novak’s certification forms were insufficient to establish a serious health condition.  The first certification was unreliable because the doctor who completed it lacked personal knowledge of the employee’s condition, and MetroHealth was not required to obtain a second medical opinion before rejecting the certification.  The court also rejected Novak’s request for leave based on her daughter’s depression, noting that the FMLA does not authorize leave to care for an employee’s grandchild and permits an employee to take leave to care for an adult child only if the child suffers from a serious health condition and is “incapable of self-care because of a mental or physical disability.”  The certification regarding the daughter’s short-term depression did not state that she was unable to care for herself.  Consequently, Novak’s absences were properly counted under the no-fault attendance policy.

The panel members expressed differing views about whether EEOC interpretive guidance under the ADA, indicating that temporary, non-chronic impairments of short duration are not disabilities, could be used in the FMLA context – a proposition the First Circuit has firmly rejected – but agreed that Novak’s case did not require deciding the issue.

Employee Receiving STD While On Leave Cannot Be Required To Use Sick Or Vacation Benefits.  In Repa v. Roadway Express, the U.S. Court of Appeals for the Seventh Circuit limited an employer’s right to require “substitution” of accrued paid time for unpaid FMLA leave.  After suffering a non-work related injury that required a six-week absence from work, Repa began receiving short-term disability (STD) benefits through a multi-employer welfare benefit plan to which her employer contributed.  Roadway granted Repa’s request for FMLA leave but notified her that she must “substitute” accrued paid time, and it paid her for vacation and sick days in addition to the STD benefits.  Repa sued, arguing that, although the FMLA allows “an employee [to] elect, or an employer [to] require the employee, to substitute” accrued paid time, this right of “substitution” is limited by a DOL regulation.  The Court agreed with Repa that DOL was entitled to provide that if “leave pursuant to a temporary benefit plan is not unpaid, the provision for substitution of paid leave is inapplicable.”

Prorated “Production” Bonus Does Not Violate FMLA.  In Sommer v. Vanguard Group, the U.S. Court of Appeals for the Third Circuit addressed a recurring FMLA issue.  Sommer’s eight-week FMLA leave meant that he did not have enough work hours for the year to meet a performance-based threshold for earning a full bonus.  He sued, claiming his employer could not legally reduce his bonus due to time he had spent on FMLA leave.  The court disagreed, drawing a distinction between “production” and “occurrence” bonuses.  “Production” bonuses require positive effort on the employee’s part (e.g., billing a certain number of hours or selling a particular number of products), whereas “occurrence” bonuses reward an employee for complying with rules (e.g., for having no safety violations or having perfect attendance).  The court held that employers can prorate production bonuses -- but not occurrence bonuses -- for factors resulting from FMLA leave, including reduced hours.

Prior Approved Leaves Do Not Excuse Employee From Documenting New Leave.  In Greenwell v. State Farm Mutual, the U.S. Court of Appeals for the Fifth Circuit affirmed the dismissal of an employee’s FMLA lawsuit because she did not provide sufficient FMLA notice to prevent her termination.  Greenwell had a history of excessive absences and was required by State Farm to give at least 24 hours notice for scheduled time away from the job.  She was terminated after she missed work without giving the notice.  She told her supervisor that she needed to stay home with her son because of a flareup of his asthma condition, did not complete FMLA forms because she did not have medical documentation for this event.  Greenwell argued that she had provided sufficient notice of her intention to seek FMLA leave because she previously had two FMLA leaves approved to care for her son’s asthma condition.  The court held that Greenwell had not sufficiently connected the latest absence to a medical condition qualifying for FMLA protection.  Her decision not to complete the forms prevented her employer from making an FMLA determination, and she offered no persuasive reasons for departing from normal FMLA procedures or neglecting to secure medical documentation. 

Employer Correctly Counted Holidays In Calculating Intermittent FMLA Leave.  Deciding an issue of first impression in Mellen v. Trustees of Boston University, the U.S. Court of Appeals for the First Circuit held that the University provided Mellen with the full duration of leave required by the FMLA even though it counted holidays that fell within her leave period in calculating her intermittent leave entitlement.  Mellen contended that a DOL regulation obligated BU to extend her intermittent leave to replace three holidays that fell within it, and that because of its failure to comply BU had prematurely treated her absence as a voluntary resignation.  BU pointed to another DOL regulation stating that a holiday falling within a week taken as FMLA leave has no effect on counting that week as a week of FMLA leave.  Agreeing with the University, the First Circuit concluded that the two regulations work together.  If an employee’s intermittent leave includes a full, holiday-containing week, the "amount of leave used" includes the holiday.  The purpose of the regulation cited by Mellen, said the court, is to prevent an employer from claiming that an employee who takes off one day during a five-day week has used an entire week of leave, not to give an employee who takes five weeks of intermittent FMLA leave more days than an employee who takes five weeks of continuous leave. 

FMLA Damages Allowed For Employee’s Injury In Non-Comparable Job.  In Bordeau v. Saginaw Control & Engineering, an employee sought damages under the FMLA for back injuries he received after returning from FMLA leave to a manual labor position.  Before his leave he had been a purchasing manager.  A U.S. District Court in Michigan found that the FMLA does not authorize compensatory damages for such physical injuries, because its remedy section makes an employer who violates the FMLA potentially liable for “any wages, salary, employment benefits, or other compensation denied or lost” by reason of the violation, or any directly resulting actual monetary losses.  The court held that Bordeau’s inability to work and earn because of his back injury did not amount to wage loss or actual monetary loss as a “direct result of” the FMLA violation.  Nevertheless, it allowed Bordeau’s lawsuit to go forward on the theory that the FMLA permits “equitable relief,” including front pay where reinstatement is not appropriate or possible, in cases where the employee – like Bordeau – had been physically disabled from working because of the violation.

Shannon V. Loverich