Sixth Circuit Reverses Employer’s Judgment on FMLA Claim Because of Personnel Manual

Earlier this year, the Sixth Circuit  Court of Appeals in Cincinnati reversed an employer’s summary judgment on an FMLA claim.  Tilley v. Kalamazoo County Road Commission, No. 14-1679 (6^th Cir. 1/26/15). While the Court agreed that the plaintiff was not eligible for FMLA leave because he did not work at an eligible work site, the employer could be equitably stopped because it had misstated his eligibility in its Personnel Manual.   The Manual stated that employees were eligible for FMLA leave as long as they had been employed a year and had worked 1,250 hours in the prior twelve months, but said nothing about needing to work at a qualified work site with at least 50 employees within 75 miles. Because the plaintiff showed that he had reasonably relied on this misstatement of his eligibility to his detriment, it arguably violated the FMLA to terminate his employment, in part, because he failed to meet a work deadline during his medical leave.

According to the Court’s opinion, the plaintiff’s supervisor was unhappy with his job performance and had set a number of work deadlines and issued disciplinary warnings.  When the plaintiff’s final deadline of August 1 was approaching (pursuant to his final written performance warning), he was taken to the hospital and kept overnight because of chest pains.  His wife informed his employer that he would not be returning to work before August 5 and HR sent him FMLA paperwork on August 9.  He was informed in the Eligibility Notice that he was eligible for FMLA leave and HR did not check the box for employees who were not eligible because they did not work at an eligible work site.   He was also informed that he had 15 days to submit medical documentation to substantiate his need for FMLA leave.

Nonetheless, the plaintiff was terminated on August 12, in part for failing to meet his August 1 or other deadlines.  This lawsuit followed, where the plaintiff alleged that he had been terminated on account of his age and in violation of the FMLA.   The district court granted summary judgment to the employer on both claims and the Court of Appeals affirmed dismissal of the age discrimination claim.   The lower court found that the plaintiff was not eligible for FMLA leave because he did not work at a site with at least 50 employees within 75 miles on the date that his medical leave began.   The court also rejected any argument of reasonable and detrimental reliance on the eligibility notice because it had not been sent to him until after he began his medical leave.

On appeal, the Sixth Circuit agreed that the plaintiff was not an eligible employee under the FMLA.  Although the plaintiff produced evidence that the employer arguably employed at least 50 employees within 75 miles of his worksite a few weeks earlier in July 2011, he did not contradict the employer’s evidence that it had not employed at least 50 employees in that area on August 1, when he began medical leave:

But the number of employees at that time [July 2011) is not relevant. For purposes of the FMLA 50/75-Employee Threshold, the number of employees “is determined when the employee gives notice of the need for leave.” 29 C.F.R. § 825.110(e). 

Nonetheless, even though the plaintiff was not eligible under the FMLA statute or regulations, the Court found that the employer could be equitably estopped from denying his eligibility because of misinformation it provided in the its Personnel Manual.  

We have held that in order “to prevail on his equitable estoppel argument,” an employee “need show only (1) a definite misrepresentation as to a material fact, (2) a reasonable reliance on the misrepresentation, and (3) a resulting detriment to the party reasonably relying on the misrepresentation.”

In this case, the Manual provided that employees were eligible for FMLA if they worked for at least a year and 1,250 hours in the prior twelve months.  It said nothing about needing to work at a qualified work site where there were at least 50 employees within a 75 mile radius. “This is an unambiguous and unqualified statement that Road Commission employees, like [the plaintiff], who have logged 1,250 hours in the year before seeking FMLA leave are covered by the FMLA and are eligible to apply for FMLA benefits.”  

The [defendant employer] could have qualified its statement concerning employee eligibility by adding that its full-time employees would only be covered by the FMLA if they worked at, or within 75 miles of, a site at which the [defendant employer] employed at least 50 employees. That is precisely what other employers have done. . . . And courts have recognized that such qualifying language may effectively communicate to employees that they are assured of eligibility only if the FMLA 50/75-Employee Threshold is met. Cf. Pearle Vision, 251 F.3d at 1137. We conclude that the [defendant employer’s] unqualified statement that employees in Tilley’s position are covered under the FMLA satisfies the misrepresentation element of the equitable estoppel test.

The Court rejected the employer’s arguments that it should not be penalizing for explaining the FMLA to employees at non-qualified work sites because the FMLA regulations require all covered employers to provide a notice of FMLA rights at all work sites, even if the employees at particular sites do not meet the 50 employee/75 mile threshold.  This is because there is nothing in the FMLA requiring employers to misinform employees about the eligibility requirements and not including a statement about the 50 employee/75 mile threshold.   On the contrary, the DOL’s template notice form describes the 50 employee/75 mile threshold for FMLA eligibility.

Moreover, the plaintiff provided an affidavit that he relied on the misstatements in the Manual about his eligibility for FMLA leave before he began his medical leave.  He claimed that if he had known that he was not eligible for FMLA leave, he would have made other arrangements to finish his August 1 project.  While there are reasons to doubt the veracity of the plaintiff’s claim that he would have delayed treatment for a possibly life-threatening heart attack in order to complete his work project on time, the question of his veracity is for a jury at trial and not a judge at the summary judgment stage.

In addition, the Court believed that the plaintiff’s reliance on the Manual was reasonable from his perspective.  Indeed, HR sent him a notice confirming his eligibility for FMLA leave based on its own review and interpretation of the Manual.

Simply put, a reasonable person in [the plaintiff’s] position could fairly have believed that he was protected by the FMLA.  . . . . . The [employer] is thus in no position to argue that [he] acted unreasonably in reaching the same conclusion.

Finally, the plaintiff could show that he suffered to his detriment by relying on the misstatement of his FMLA eligibility in the Manual because he was ultimately fired in part for missing the August 1 deadline while he took medical leave.   Accordingly, the employer was not entitled to summary judgment on the FMLA claim.

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 be changed or 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.

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.

New FMLA Regulations Significantly Modify Employers’ Notice Requirements.

As mentioned in the summaries from last week, the DOL issued new FMLA regulations last Monday which will become effective on January 16, 2009 and will require employers to modify their employment policies, practices employee handbooks. Employers should consult with an employment attorney to revise and/or review their FMLA policies and forms before the new FMLA rules become effective in January. In addition to the new rules mentioned at this site beginning at DOL issues Final FMLA Regulations on New Servicemember and Exigency Leaves and Revises Serious Health Condition Rules, the following rules were also revised:

26. §825.300 Employer Notice Requirements. The new regulations consolidate in one regulation all of the significant notice requirements imposed on employers and make a a number of other significant changes.

General Notice. In addition to providing the FMLA general notices in a language understood by a significant number of the non-English-speaking employers, the employer is also now required to provide notices that can be understood by sensory-impaired individuals. The fine for non-compliance has been raised to $110.00. Electronic posting of the FMLA general notice is sufficient to comply with the regulation “as long as it otherwise meets the requirements” of the regulation. “For the posting requirement to be met, however, all employees and applicants for employment must have access to the information. Thus, for example, if an employer has some employees who do not have employer provided computer access or who are not otherwise able to access the information electronically, the employer must post on its premises where it can be readily seen a paper copy of the information contained in the general notice. . . . [Nonetheless], electronic posting does not excuse the employer from the statutory requirement to post in a location viewable by applicants for employment. . . . , if the employer posts such information on an intranet that is not accessible to applicants, additional posting would be necessary in a conspicuous place where notices for applicants for employment are customarily posted.”

Employee Handbooks. The general notice information must be included in the employer’s employee handbook, if any, and if there is no employee handbook, the information must be given to each employee when the employee is hired. “In either case,” the information may be distributed electronically as long as the regulation is complied with (i.e., “that the information is accessible to all employees of the employer, that it is made available to employees not literate in English (if required), and that the information provided includes, at a minimum, all of the information contained in the prototype general notice).” The DOL ultimately decided not to require the information to be distributed annually as previously proposed.

Eligibility Notice. When an employee requests FMLA leave or when the employer learns that an employee’s leave may be for an FMLA reason, the employer must notify the employee of the employee’s eligibility to take FMLA leave within five business days absent extenuating circumstances. (This notice is limited to eligibility and does not address whether the employee has qualified for FMLA or has already exhausted FMLA leave). The employee’s eligibility must be determined at the beginning of the first instance of leave for each FMLA-qualifying reason. “All FMLA absences for the same qualifying reason are considered as a single leave and employee eligibility as to that reason for leave does not change during the applicable 12-month period.” Conversely, if the employee needs FMLA leave for a different reason within the twelve months, but the employee’s eligibility status has changed, the employer must notify the employee of the changed status within five business days.” If an employee is not eligible for FMLA leave, the employer’s notice to the employee need only state at least one reason why the employee is not eligible.” In addition, “[n]otification of eligibility may be oral or in writing” and “employers may use” a prototype notice provided in the regulations. This notice, of course, must be translated into a language or format the employee understands. Notably, the DOL has deleted the current requirement that the employer provide such a notice with each request for FMLA leave or every six months because “in many cases, is much less frequent than either with ach FMLA-protected absence or every six months.”

Notice of Obligations. When the employer provides the employee with the eligibility notice, the employer must also “provide written notice detailing the specific expectations and obligations of the employee and explaining any consequences of a failure to meet these obligations” (in a language or format understood by the employee). “If leave has already begun, the notice should be mailed to the employee’s address of record.” When describing the conditions of substituting paid leave, the notice must also specify the employee’s entitlement to take unpaid FMLA leave if the conditions for paid leave are not met. “[A]n employer may meet the requirements of providing information about the conditions related to the substitution of paid leave by reference to existing, employee accessible copies of such policies.” This notice no longer need include any requirement for the employee to present a fitness-for-duty certification following the leave. The notice “may be accompanied by any required certification form,” including the DOL’s prototype notice. If the information changes, the employer must within five days after the next request for leave provide written notice describing and referencing the changed information. Again, this notice may be distributed electronically as previously discussed.

Designation Notice. Once an employer receives enough information (from a medical certification form, etc.) to determine whether a leave qualifies under the FMLA, it “must notify the employee whether the leave will be designated and will be counted as FMLA leave within five business days absent extenuating circumstances. Only one notice of designation is required for each FMLA-qualifying reason per applicable 12-month period, regardless of whether the leave . . . will be a continuous block of leave or intermittent or reduced schedule leave.” When it designates the leave as qualifying under the FMLA, the employer must also notify the employee if paid leave is to substituted for unpaid FMLA leave or that paid leave taken under an existing leave plan be counted as FMLA leave.” If the designation information changes (i.e., the employee exhausts the FMLA entitlement), the employer must “provide, within five business days of receipt of the employee’s first notice of need for leave subsequent to any change, written notice of the change.” The DOL has eliminated the current concept of “provisional designation” as confusing to employees.

The employer is required to inform the employee “of the amount of leave counted against the employee’s FMLA leave entitlement. If the amount of leave needed is known at the time” of the Designation Notice, “the employer must notify the employee of the number of hours, days, or weeks that will be counted against the employee’s FMLA leave entitlement in the designation notice.” If that is not possible “(such as in the case of unforeseeable intermittent leave), then the employer must provide notice of the amount of leave counted against the employee’s FMLA leave entitlement upon the request by the employee, but no more often than once in a 30-day period and only if leave was taken in that period. The notice of the amount of leave counted against the employee’s FMLA entitlement may be oral or in writing. If such notice is oral, it shall be confirmed in writing, no later than the following payday (unless the payday is less than one week after the oral notice, in which case the notice must be no later than the subsequent payday). Such written notice may be in any form, including a notation on the employee’s pay stub.”

Fitness for Duty. If the employer will be requiring the employee to present a fitness-for-duty certificate from the employee’s doctor upon returning to work, the employer must notify the employee of the requirement in the Designation Notice (unless the requirement is already contained in the employee handbook or other written policies). If the fitness-for-duty certificate requires the physician to address whether the employee can perform the essential duties of the employee’s position, the employer must so indicate in the Designation Notice and must also include a list of the essential functions of the employee’s position. The DOL has also supplied a prototype Designation Notice.

I will continue to summarize additional significant changes in the new FMLA regulations throughout the week on this blog, including at New FMLA Regulations Significantly Change Employee’s Notice Requirements; Calling in Sick and Ignoring Employer’s Policies No Longer Suffices. Until then, eager beavers and insomniacs can read the 201 pages of single-spaced, 9-point font new rules and explanatory comment in full at http://edocket.access.gpo.gov/2008/pdf/E8-26577.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.