Putting a worker on ‘inactive status” doesn’t necessarily block retaliatory discharge claims—in a de novo review the Seventh Circuit overturned the Federal District Court’s grant of summary judgment in favor of an employer in a claim of retaliatory discha : KCBA Weekly Blog Update
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Putting a worker on ‘inactive status” doesn’t necessarily block retaliatory discharge claims—in a de novo review the Seventh Circuit overturned the Federal District Court’s grant of summary judgment in favor of an employer in a claim of retaliatory discha

by Eugene Keefe on 06/07/11

We have advised some clients one strategy to avoid retaliatory discharge claims is to put the employee on inactive or “leave of absence” status but issue COBRA notices. If you don’t “fire” them, how can they beef their termination?

In this ruling, the Federal District Court supported that approach and found there could not be a claim for retaliatory discharge as the employment relationship had not been terminated. On appeal, our Seventh Circuit Court of Appeals found the employee set forth sufficient evidence to create a genuine dispute about whether the employer terminated the relationship.

Through its exercise of supplementary jurisdiction, the Northern District of Illinois analyzed the following facts and found no termination occurred because the employee had remained an employee on “inactive status.” In the absence of a termination, the District Court granted the employer’s motion for summary judgment on the retaliatory discharge claim. The employee appealed.

In a decision entered May 25, 2001, the United States Court of Appeals for the Seventh Circuit reversed the grant of summary judgment. In Moore v. Vital Products, Inc., Nos. 09-1527 & 09-1537, the employee worked for the employer as a driver technician and was hired in this capacity on August 16, 2004. The employee claimed he was subject to unwanted sexual advances and compliments from two male coworkers. He further claimed he reported these incidences to the company president in August and September 2004 via written correspondence. The president claimed to have never received this correspondence.

The employee was suspended for poor job performance on January 3, 2005. He returned to work and allegedly injured his back on February 16, 2005. After the alleged injury he never returned to the workplace. The employer completed an injury report on February 28, 2005.

On February 21, 2005 the employer claimed it issued a COBRA notice to the employee, which the employee claimed he did not receive until September 2005. This notice contained the words “termination of employment.”

On December 7, 2005 the employee filed charges with the EEOC, in which he represented he was still employed though on injury leave. On June 4, 2006 the employer composed a letter to the employee advising him of an available position within his workplace restrictions which stemmed from the alleged February 16, 2005 injury. This letter was never mailed and the employee denied having seen it prior to his filing suit.

On February 16, 2007 the employee filed suit in federal district court alleging in part retaliatory discharge in violation of the IWCA.

The Seventh Circuit held the sequence of events created genuine issues of material fact and therefore summary judgment had been inappropriate. Specifically, the Court noted the COBRA notice’s inclusion of the words “termination of employment” contradicted the employee’s apparent assertion that the employee was on inactive status. In addition, the date of the COBRA notice constituted evidence the employee did not abandon his job. Taken together the evidence was sufficient to allow a jury to conclude the employee had been terminated. The Court remanded the retaliatory discharge claim for further proceedings. There were no dissenting opinions.

Keefe, Campbell & Associates handles numerous employment law claims in state and federal courts at rates that are ½ to 1/3 what some labor lawyers charge for similar work. This article was researched and written by Matthew A. Wrigley, J.D. Please do not hesitate to contact Matt at mwrigley@keefe-law.com.

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