The company’s handbook said that employees fired for “gross misconduct” would not receive pay for earned but unused vacation time. The term “gross misconduct” was not defined.

One employee was fired after he failed a mandatory drug test. He did not receive any vacation pay.

He sued, claiming a failed drug test didn’t reach the level of gross misconduct and demanded a payout for the leave he didn’t use.

The court agreed. Since the company didn’t explain what conduct it was referring to, the judge tipped the scales in the employee’s favor and said “gross misconduct” refers to actions that are “intentional, wanton, willful, deliberate, reckless or in deliberate indifference to an employer’s interest.”

And, according to the court, failing a drug test didn’t make the cut. The employee was awarded his payout.

The lesson: Be careful about using terms that are open to interpretation without clearly defining them. If the handbook had simply said, for example, that employees forfeit their paid leave if they’re fired for breaking company policy, the court battle could likely have been avoided.

Cite: Lang v. Quality Mold.

Generally, employees on FMLA don’t need to continue earning those benefits. Benefits are accrued based on employers’ individual policies.

For example, if your company gives employees vacation time based on the hours they work, they don’t need to accrue any PTO while on medical leave (as long as other types of unpaid leave are treated the same way).

The same goes for calculating seniority. Hours on FMLA don’t need to be factored into the equation.

But there is one area to look out for: Many companies let employees earn PTO while they’re out on paid vacation. When FMLA runs concurrently with paid leave, employers should continue following that policy.

Otherwise, they could get in trouble for treating an employee using FMLA leave differently than employees who haven’t taken FMLA.

The facts:

An employee filed a request for vacation time. It was denied. Later he requested FMLA leave (to recover from an injured knee) for roughly the same time frame, with a medical certification from his doctor. He was approved for leave but while he was gone the company, putting two and two together, decided to check in with him. He wasn’t home. So when he came back, he was questioned and he admitted to spending part of the time in Las Vegas. Not surprisingly, he was fired. But he sued, maintaining that his leave was legit.

The employer said:

The FMLA fraud was obvious: The employee asked to take vacation, was turned down, and faked a medical condition so he could take the trip anyway. But the employee claimed that once the company approved leave, that was the end of it, and if it suspected foul play, it should’ve asked for a second opinion or not approved the leave.

Who won the case?

Answer: The employer.

Why: The judge didn’t buy the employee’s argument. The law says that employers can ask for a second medical opinion – there’s nothing that says they can’t look into suspected fraud if they choose not to.

Also, courts have upheld employers’ policies of checking in with employees who are out on FMLA leave. That can be an effective way to make sure that employees who say they’re home sick really are.

Cite: Crouch v. Whirlpool Corp.