Manager’s generosity backfires — lands company in court
February 24, 2009 by Sam NarisiPosted in: Benefits Law, FMLA, Special Report
Many employers choose to have leave policies that are more generous than what the FMLA requires. But as a recent case shows, that doesn’t mean those companies are immune to lawsuits.
An employee needed two months off work after complications during surgery. His boss told him he could take paid leave for whatever time he needed.
Though the employee was eligible for FMLA, neither he nor his boss ever mentioned it as a possibility. Instead, he took time off and was paid his full salary until he was able to come back to work.
The manager told him his job would be open for him when he returned.
The problem: The supervisor couldn’t live up to his promise. Once he went back to work, the employee was put in a different position and given a pay cut.
He sued under FMLA, claiming he was unfairly denied reinstatement to his former position.
The company tried to have the case thrown out, arguing the employee had no right to reinstatement because he never took FMLA leave.
But the judge didn’t buy it. As the court ruled, most likely, the only reason he didn’t take FMLA is that his manager never offered it — and he was obligated to after he learned the reason the employee needed time off.
The company may have acted generously by giving the employee seemingly indefinite paid leave, but that didn’t mean he wasn’t entitled to the FMLA’s job protection.
Generosity’s not enough
The lesson for managers: It’s easy to think employees don’t need FMLA because the company’s offering a more generous leave policy and plans to keep the employee in the same job no matter what.
But as this case shows, those plans don’t always work out. And that makes employers an easy target for lawsuits.
Managers need to notify HR whenever they think an employee qualifies for FMLA so leave can be offered — no matter what the employer’s individual leave policy.
Cite: Smith v. Primecare Medical, Inc.
Tags: FMLA, paid leave, returning from FMLA leave
February 25th, 2009 at 9:29 am
Same situation…employee with medical condition, given 3 months paid time off, no FMLA offered or requested….but I’m curious if this situation is different in that we only have 15 employees. As I understand it, only 50 or more employees pulls FMLA into question. Am I right on this? Or do we have a situation looming out there? Any thoughts?
February 25th, 2009 at 9:45 am
Hi Yankee Kid,
You are correct. This is copied from the ACT.
EXCLUSIONS.–The term “eligible employee” does not include
(i) any Federal officer or employee covered under subchapter V of chapter 63 of title 5, United States Code (as added by title II of this Act); or
(ii) any employee of an employer who is employed at a worksite at which such employer employs less than 50 employees if the total number of employees employed by that employer within 75 miles of that worksite is less than 50.
Hope this helps.
February 25th, 2009 at 10:06 am
Yes, FMLA protections only apply if the company employees 50 or more employees withing a 75-mile radius.
February 25th, 2009 at 10:09 am
We have 53 employees, 6 of them are part time. What is the FMLA rules that apply to us?
February 25th, 2009 at 10:23 am
Although we have 95 employees they are not in a 75 mile radius but we do offer FMLA, it is up to the company to decide if they want to offer it anyway.
February 25th, 2009 at 10:39 am
Steve, I don’t think the Act specifies whether the employees are full- or part-time, just that there are 50 or more employees. I’d say it applies to your company.
February 25th, 2009 at 10:42 am
Steve,
The policy applies whether the employees are full-time or part-time.
A part-time employee is entitled to leave under FMLA calculated on an hourly basis that will equal 12 times the average number of hours in the employee’s regularly scheduled administrative workweek – for example: if the employee works 20 hours per workweek, the employee is entitled to 240 hours of leave under the Family and Medical Leave Act.
Hope this helps.
February 25th, 2009 at 11:01 am
Yep, Yankee Kid, you are correct. I am a small company too only about 35 ees, but still, it is difficult to get information from managers. They think they have it covered and don’t realize the joepardy that they put the company in by “taking care of it” themselves.
February 25th, 2009 at 11:06 am
In addition to what everyone is writing under FMLA an employee (if the company employees 50 or more employee within a 75 mile radius) must work with a company for 12 months and work a total of 1250 in order to be eligible. I also know that under FMLA the months do not have to be consecutive. That’s the rule that I follow mainly. Majority of our part-time employees are not eligible for FMLA. In an event of a medical condition our part-time employee can take Non-FMLA leave (similar to personal leave).
February 25th, 2009 at 11:18 am
But the judge didn’t buy it. As the court ruled, most likely, the only reason he didn’t take FMLA is that his manager never offered it — and he was obligated to after he learned the reason the employee needed time off. —–
Was this a liberal judge? How stupid could a judge be? How did he/she even become a judge? Give me the opportunity of FMLA with no pay or time off with pay and I (and every other employee) would take the PAY. If you take the pay you risk not having a job to come back to. Now, the supervisor should not promise things he cannot deliver. The judge should have give the guy his old job back with his old pay, or his new job with his old pay. Now that would be fair.
February 25th, 2009 at 11:52 am
Thank you Paul Schultz, I too would have taken the paid leave! When FMLA is taken the company and employee assume the job will be there when they come back. However, things change and, as this site has stated repeatedly, folks on FMLA can be let go or moved to another position…with proper documentation! Did this company not document? What else happened the article did not expound on?
February 25th, 2009 at 12:43 pm
Thgis is one of the sickest decisions by a Judge that I’ve ever heard about in thirty years of management. Is it any wonder that we are daily exporting jobs overseas?
February 25th, 2009 at 12:47 pm
Any thoughts on whether this could turn into a lawsuit possibility if the employee were to be terminated due to the physical requirements of the job vs. the restrictions placed by medical personnel which would not allow the employee to perform the required duties? If they were offered another position, such as in the original post, with a comensurate pay and they turned it down and then sued for wrongful termination. In my opinion, they would not have a leg to stand on as they were given another position, but they declined, for whatever reason. Thoughts?
February 25th, 2009 at 12:50 pm
Small employers…don’t get too comfortable. President Obama wants to put further burden on you.
Check it out at: http://www.whitehouse.gov/agenda/family/
Excerpt from website above:
Expand the Family and Medical Leave Act (FMLA): The FMLA covers only certain people who work for employers with 50 or more employees. Barack Obama and Joe Biden will expand the FMLA to cover businesses with 25 or more employees, and to cover more purposes including allowing: leave for workers who provide elder care; 24 hours of leave each year for parents to participate in their children’s academic activities at school; leave for workers who care for individuals who reside in their home for 6 months or more; and leave for employees to address domestic violence and sexual assault.
February 25th, 2009 at 1:23 pm
Tim, I’m pretty sure the judge had it right.
Please feel free to correct me if I’m wrong but I do not think you can make an employee choose, or even offer a choice between a federally mandated right or another option. The best course of action was to designate the leave as FMLA, then and only then if they wanted to offer pay during the leave, pay the employee. You can do both. But you cannot term the leave (if it meets FMLA criteria) as non FMLA leave, regardless whether you paid the employee or not. Wages are only part of the FMLA picture, job protection is the other part.
Yankee Kid – same job, same pay, same shift, same, same, same…..unless physically incapable of performing the functions of the job…..then you would have to bring in and assess ADA reasonable accomadation standards.
Nothing is every easy
]
February 25th, 2009 at 1:24 pm
Sorry about the spelling errors – didn’t catch them before submitting my comment!
“accomodation”
“Nothing is ever easy”
February 25th, 2009 at 1:29 pm
The FMLA is a march toward a complete socialist state. Unless and until you as employers and individuals demand the Feds stop passing laws that force businesses to become social watchdogs and engineers, it will only get worse. Remember the main difference between socialism and communism is socialism takes away your rights for nice sounding causes for the masses. If the current Congress and administration really want to stimulate the economy they should make it easier for businesses to operate not more difficult.
February 25th, 2009 at 2:24 pm
Fat chance Frances! We are headed towards socialism and none of the recent stimulus (read: democRAT spending legislation) bill will stimulate the economy. But it will take away more rights, nail small businesses with tax increases, and give welfare checks to the lower 1/2 of the “taxpayers.”
February 25th, 2009 at 4:14 pm
Outstanding comments. Thank you.
steve tabor
February 25th, 2009 at 4:15 pm
Thank you, DjC, you’re exactly right.
My opinion, though…FMLA is only necessary for poor performers. A company would be crazy to not let a star performer return to work after a reasonable leave. It’s the people you’d rather do without that “need” the protection provided by the law.
Just my thoughts.
February 25th, 2009 at 4:30 pm
To Paul:
FMLA leave doesn’t have to be without pay. Whether you pay the employee or not, you should designate the leave as FMLA if it applies. Then you are protecting the employee’s job for at least 12 weeks and covering yourself if something goes wrong and the employee is out much longer than you anticipated.
To Yankee Kid:
Why did your company feel it needed to pay the employee for 3 months leave? That is very generous, but wouldn’t it be safer to allow them the FMLA and let them use any vacation or personal time they have available? Also, you could provide short term disability which generally pays 60% of their pay. If employees are being paid 100% of their salary they don’t have as much “drive” to get back to work. I’m not criticizing you, just curious. We only offer paid parental leave – 8 weeks.
February 25th, 2009 at 5:13 pm
It is amazing how EVERY time some people make comments they turn political. If all you want to do is complain about politics – go to another site!
February 25th, 2009 at 5:36 pm
Yankee kid! This is just a thought but… Your company paid employee ‘A’ for whatever reason, during this time. Now, say, 6 months later, employee ‘B’ needs time off but, for whatever reason, paid time off is not offered. Employee B wanting same treatment, files lawsuit! Based on how the courts are being such knuckleheads about everything I bet you would loose the lawsuit. you may want to put some thought into this.
February 25th, 2009 at 6:32 pm
This is being submitted more for the publishers of this website than for those of you who post here.
Sad…..
…unfortunately I think many people who respond here forget what the purpose of this website is…at least what I thought it was for. I thought it was to train and educate employers and HR reps on labor law and personnel issues. While we may not like some of the laws, they are the law and to avoid lawsuits, we need to know how to operate within the law.
I did not think this was meant to be a forum to discuss the pros and cons of today’s politics. I came here to learn, not to be preached to. Problem is though…..
1) Most of the time we are presented with an inflamed snap shot of the situation – note – “Manager’s Generosity Backfires – lands company in court!” Could this be intentional?
2) As a result it sets many people off, on assumptions, accusations and eventually political diatribe. After a while it all gets so tiring.
I guess this isn’t the site for me and it is time to cancel my subscription. Too bad….I really hoped I had found a place that could help me and teach me. A place where I could rely on others experience and professionalism. Apparently anger and accusations tend to be more the norm here.
February 26th, 2009 at 9:11 am
I agree with DJC. Stop sharing your political beliefs/comments and stick to the HR topic
February 26th, 2009 at 10:26 am
I have a quesiton. We offer Short Term Disabiltiy for the employees. What if an employee is off on STD and comes back and there job is not available? Does FMLA run concurrent witj STD? Also we are only 15 employees but considered local government which I believe means FMLA applies to our company.
February 26th, 2009 at 10:40 am
To All: I appreciate the conversation here and the insights that have been provided. In response to some of the questions posed in this circumstance, you have raised some very good points. We did something for a young kid that had a very shaky situation, both personally, financially and then with his health that we looked at once we started into it and wondered if we just opened pandoras box. Mary and Babbs, you are correct…that is why I started this conversation…unsure that we did the right thing and looking for other thoughts that could change the way we do things in the future. We were again trying to the right thing by a good employee and now are wondering if it will backfire! Certainly hope not, but in this day and age, you never know! Thanks again to all for the insights!
February 26th, 2009 at 10:50 am
To RJB:
FMLA should run concurrent to STD. You need to make sure you offer it and do the appropriate paperwork. It doesn’t hurt to do it, even if you are sure the employee’s job is completely safe.
February 26th, 2009 at 11:23 am
Thanks HH
to RJB – STD is an “insurance”, to pay for time off. FMLA is a leave designation. As indicated by Mary, they can and should go hand in hand (run concurrent) if the reason for STD meets FMLA leave criteria (i.e. “Employee’s own serious health condition, including pregnancy related conditions”). FMLA was in-acted to protect the employee from job loss and disciplinary issues surrounding the absence.
The other side of FMLA is protection for the employer. FMLA restricts the amount of “protected” time off an employee can take for specifically designated reasons. Prior to recent changes, if your policies required the use of paid time (i.e.; vac, sick leave and PTO), and they should, concurrent with the FMLA, then your total loss of that employee in any one 12 month period was 12 weeks. That has now changed with the new military leave categories and in certain circumstances an employee may get more than 12 weeks.
As an employer in Oregon, a VERY employee friendly state, our state leave laws are much broader and by law we have to follow whichever is more beneficial to the employee. Quite often the two leaves (FMLA and OFLA) can run concurrent. However, there are different leave types that are protected by one and not the other resulting in expanding the amount of time any one employee can be away from their job while maintaining their protected status. In addition it makes the whole designation/tracking process that much more confusing.
I find the whole federal and state leave process confusing at best. And don’t even get me started on “intermittent leave” (lol). The best advice I can give is to verify each leave type (state/federal) seperately, then and only then look at them together. This way helps ensure that you are meeting the criteria of both leaves and not running afoul of one or the other. And be sure not to get protected leave confused with other items (STD & LTD insurance).
djc
February 26th, 2009 at 1:21 pm
DJC – thanks for answer. One of your comments brought me to another thought. After STD expires we also offer long term disabiltiy which of course would last longer than the 12 weeks under FMLA. I assume from you comments that if leave extends past the 12 weeks the employees job may not be protected (at least under FMLA). This is sometimes very difficult since we are such a small employer but FMLA includes governement no matter what size.
February 26th, 2009 at 5:18 pm
RJB – If you are government, is there a union contract, and is leave addressed within the contract? You may be required to grant protected leave time, per the contract, beyond what is protected by FMLA. Do you have state leave laws and if so how do they compare with FMLA? What is the size of your employee base and can they be counted as part of a larger group? What level/branch of government?
February 27th, 2009 at 10:09 am
DJC – yes we have a union contract which protects seniortiy only not specific jobs for up to 18 months. We would most likely protect the jobs as well with a small organization (15 employees) like ours but I believe the original article was about a company that thought they would protect job also. We are a local Municipal Authority. I recenlty had somonee on STD and never really gave much thought to FMLA running concurrent. I will do a little more research on this issue.
February 27th, 2009 at 1:42 pm
Does anyone know if a company policy requires employees to utilize all types of paid leave (PTO, sick, vacation) prior to taking any unpaid leave while on an approved leave (FMLA) and the employee is recieving 60% of their weekly wage from a STD plan can the employer require the employee to use 40% equivalent of thier paid leave balance to bring them up to 100%? In other words, if an employee is refusing to use paid leave because they are receiv a STD payment of 60% of their weekly wage is a company prohibited from expecting employees to use paid leave for the difference altogether under the new FMLA regs?