Showing posts with label bad faith. Show all posts
Showing posts with label bad faith. Show all posts

Thursday, July 9, 2009

Sixth Circuit: Employer Can Be Estopped From Denying FMLA Leave to Ineligible Employee, but Only If Employee Can Show Actual Reliance on Employer

Yesterday, the Sixth Circuit Court of Appeals again addressed the issue of whether an employer can be equitably estopped from denying FMLA to an ineligible employee (because the employer had fewer than 50 employees within 75 miles of the employee’s worksite). Dobrowski v. Jay Dee Contractors, Inc., No. 08-1806 (6th Cir. 7/8/09). Although the Court ultimately adopted a loose standard for applying the doctrine of equitable estoppel against an employer, it ultimately held that an employee -- who had been told in writing by his employer that he was eligible for FMLA leave and that his application for FMLA leave had been approved before he underwent an elective surgery -- could not benefit from the estoppel doctrine because he could not show that he actually relied upon the employer’s misrepresentations about his FMLA eligibility in that he had scheduled his surgery before his FMLA application had been approved.

In that case, the epileptic employee elected to have surgery that would decrease his chance to have seizures. He notified his employer months in advance and sought authorization for a medical leave of absence at a particular time. Although everyone seemed to assume that he would be granted a medical leave of absence, he sought definite clarification and specifically mentioned the FMLA. The employer ultimately asked him to complete an application for FMLA leave and confirmed in writing that he would be receiving FMLA leave for up to twelve weeks, his position would be held open for that period of time, that he was eligible for FMLA leave and that his FMLA application had been granted. However, when he was ready to return to work, the employer notified him that it had eliminated his position as the construction project winded down.

When the employee sued, the employer defended on the grounds that his position had been eliminated in the normal course of events (as it would have done even if he had not taken FMLA leave) and that he was not eligible for FMLA leave after all because the employer had not employed more than 50 employees within 75 miles of the employee’s worksite. The trial court granted summary judgment to the employer and the Court of Appeals affirmed.

The Court has followed two different equitable estoppel doctrines in FMLA cases. In one – taken from ERISA cases – the plaintiff must show that the employer essentially committed fraud or bad faith by making false statements of facts with knowledge of the true state of affairs and with an intent for the employee to rely on the false statements. In the more common description of the doctrine found in the Restatement of Torts:


If one person makes a definite misrepresentation of fact to another person having reason to believe that the other person will rely upon it and the other in reasonable reliance upon it does an act . . . the first person is not entitled
. . .
(b) to regain property or its value that the other acquired by the act, if the other in reliance upon the misrepresentation and before discovery of the truth has so changed his position that it would be unjust to deprive him of that which he thus acquired.


The Supreme Court has previously noted that, “the party claiming the estoppel must have relied on its adversary’s conduct in such a manner as to change his position for the worse, and that reliance must have been reasonable in that the party claiming the estoppel did not know nor should it have known that its adversary’s conduct was misleading.” Heckler v. Community Health Services of Crawford County, Inc., 467 U.S. 51, 59 (1986). The Sixth Circuit found this to be the most appropriate standard since the employer is in the best position to evaluate the employee’s eligibility and “is the cheaper cost avoider.”

Nonetheless, in what can be described as a hypertechnical reading of the employee’s affidavit, the Court concluded that the employee could not show that he actually or detrimentally relied on the employer’s misstatement about his eligibility for FMLA leave because he scheduled the surgery before submitting his FMLA application and failed to include any statement in his affidavit that he would have canceled or rescheduled his surgery if his FMLA leave had been denied. As summarized by the Court:


There is no evidence in the record to show that he “change[d] his position” in reliance on the belief that his leave would be FMLA-protected. . . . Had he relied on the erroneous representations, one would expect [the employee] to be able to point to some action or statement that indicated that his decision to have the surgery was contingent on his understanding of his FMLA status; or perhaps evidence that raises an inference of such contingency – for example, a record that he made an inquiry as to his rights, asked for written confirmation of his leave arrangement, or changed his behavior after being told he was eligible. . . . At the very least, [the employee] could have placed an affidavit in the record stating that he would have forgone the surgery but for his belief that his job status was protected by the FMLA. See FED. R. CIV. P. 56(e). But none of this is present in the record.

If anything, the record shows that [the employee] had already decided on and scheduled the surgery by the time he was informed of his eligibility. There is no evidence of a discussion of the FMLA eligibility prior to the application for leave filed with [the employer] on September 27 – about three weeks prior to his October 15 surgery, and well after he informed the company of his planned absence. In deposition, [the employee] indicated that he knew that he would undergo the surgery about six months in advance, and told [his employer] as soon as he knew the date, “maybe three months before . . . the actual surgery.” ROA 291-92. At that time, he said “I got the okay so I will be having surgery on [October 15].” ROA 292. After his superiors asked questions about how long he planned to take off work, [the employee] organized a meeting to discuss his absence. His email preceding the meeting references his “operation coming up” and does not ask for permission to take leave, discuss his rights under the FMLA, or indicate a willingness to delay or reschedule depending on his legal status.


Although the employee argued “that because the surgery was elective, he could have rescheduled it had he known that he was not FMLA eligible. It is true in the abstract that he could have rescheduled it; but it is his burden on summary judgment to produce evidence supporting his estoppel claim, and the record must contain evidence permitting a finding that he would have.”

Insomniacs can read the full decision at http://www.ca6.uscourts.gov/opinions.pdf/09a0239p-06.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.