Make sure you communicate your method of calculating Family and Medical Leave Act benefits or you will lose your ability to terminate a worker for violating the policy—and it may cost you plenty. According to the recent ruling by the 6th U.S. Circuit Court of Appeals in Thom vs. American Standard Inc., when a 36-year employee originally asked for FMLA leave from April 27, 2005, until June 27, 2005, for a non-work-related shoulder injury, which the Ohio-based firm approved and then was cleared to return to work earlier on June 13, 2005 and didn’t return but produced a note on June 17, 2005 keeping him off work until June 27. When he was asked on June 14 why he had not returned, he indicated he was still off because of increased pain in his shoulder. He appeared at work June 17 with a doctor's note asking to extend his leave until July 18. He was terminated because the company had counted every day from June 13 as an unexcused absence and he exceeded the absences allowed.
Defendant American Standard, Inc. appealed the District Court's grant of partial summary judgment in favor of Plaintiff on his claim American Standard interfered with his rights under 29 U.S.C. § 2612(a)(1)(D) of the Family and Medical Leave Act (FMLA) the “interference” claim). American Standard also disputed the District Court's calculation of Thom's damages. Thom cross-appealed on the basis the District Court erred by not granting liquidated damages provided for in his FMLA (the “liquidated damages” claim), which calls for double damages except where the employer acted in “good faith” in discharging the employee.
The District Court awarded Plaintiff Thom $99,960 in attorney fees, $2,732.90 in costs, and $104,354.85 in back pay. The court below further ordered American Standard change Thom's termination date from June 17, 2005 to December 31, 2007, so Thom would be eligible for his expected pension and retiree health benefits for both himself and his spouse. If this change was impossible, the court required American Standard to pay Thom a monthly annuity covering the difference between his expected pension and the pension he actually received because of his early termination (a difference of 36%). The District Court denied the statutory liquidated damages because it found, despite violating the FMLA, American Standard acted both in “good faith” and with reasonable grounds for its actions when it discharged Thom.
The Federal Appeals Court noted Mr. Thom contended the company failed to inform him it used the rolling method for calculating FMLA, and the appeals court agreed. “At no time throughout the FMLA process did the company mention to Thom that his leave time would be governed by a ‘rolling' 12-month period.” It was further noted “The only written document he received from the company stated that his leave would expire on June 27. He was only notified that American Standard had accelerated his return-to-work date on June 14, after it had already lapsed the day before,”. The 6th Circuit panel said it agreed with the District Court “that employers should inform their employees in writing of which method they will use to calculate the FMLA leave year. This standard is consistent with the principles of fairness and general clarity, and applying it, American Standard's notice to Thom fell decidedly short.” Disagreeing with the District Court, the Federal Appeals Court also held Mr. Thom was entitled to the liquidated damages provided for in the FMLA, which calls for double damages.
The FMLA stipulates
· An eligible employee shall be entitled to a total of 12 work weeks of leave during any 12–month period, because of a serious health condition that makes the employee unable to perform the functions of the position of such employee.” 29 U.S.C. § 2612(a)(D).
· Employers, for their part, are “permitted to choose any one of [four] methods for determining the '12–month period' in which the 12 weeks of leave entitlement occurs.” 29 C.F.R. § 825.200(b).
o Two of these four methods, namely, the “rolling” method and the “calendar” method, are pertinent to this case.
§ The “rolling” method calculates an employee's leave year “backward from the date an employee uses any FMLA leave.” Id. Using this method, Thom's leave would have expired on June 13.
§ Under the “calendar” method, which renders an employee eligible for 12 weeks of FMLA leave each calendar year, Thom's allowed leave would have extended theoretically through July 14.
American Standard terminated Thom for unexcused absences on June 17. Thus, Thom needs the “calendar” method to apply. At no time throughout the FMLA process did the Company mention to Thom that his leave time would be governed by a “rolling” 12–month period. The only written document he received from the company stated his leave would expire on June 27. He was only notified American Standard accelerated his return-to-work date on June 14, after it had already elapsed the day before. The first time Thom was given actual notice the Company was using a “rolling” method requiring him to return to work on an earlier date was after he filed his lawsuit in this case when the defense lawyers raised the rolling method as a defense.
American Standard contended its Union officers knew the method American Standard historically maintained a policy of applying the “rolling” method and argued their knowledge was imputed to Thom “through simple agency law”. The major problem with their theory was Plaintiff had already been told his leave would not expire until June 27. Consequently, Thom was entitled to rely on the calendar method and the date of June 27 the company had given in writing. The Federal Appeals Court did not agree and also did not agree with the District Court’s denial of liquidated damages noting the company's after-the-fact reliance on the rolling method—its primary justification in the district court and on appeal—was a pretextual reason never raised in Thom's case before the discharge and only raised by American Standard once the case was in litigation. The June 27 date agreed to in writing by American Standard was completely inconsistent with the rolling method and with defense counsel's reliance on the rolling method as a justification for discharge. Pretextual reasons for discharge manufactured after the fact in order to justify an earlier wrong are not consistent or made in good faith. The rolling calendar pretext was an ostensible motive given after-the-fact as a cover for the real reason for firing this 36–year employee—whatever those economic motives may have been.
Accordingly, the Federal Appeals Court affirmed the judgment of the District Court on the interference claim under 29 U.S.C. § 2612 including damages and reversed the judgment of the District Court on the liquidated damages claim under 29 U.S.C. § 2617(a) and remanded for the doubling of damages in accordance with this opinion. By our calculations, this will result in a total award to be paid by American Standard in excess of $310,000.
Tracking and managing employee leave time is a great challenge given federal and state-mandated leave laws, workers compensation claims and employer-provided leave. Make sure you have a clear policy in place which is provided in writing and then follow your policy. If you become involved in litigation, ensure you have defense counsel who don’t present defenses which double your damages. This article was researched and written by Shawn R. Biery, J. D.; MSCC who can be reached for question or comment at email@example.com