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Family and Medical Leave: Fuzzy handbook language may entitle employee to FMLA-like protections

09.01.2008

As you probably know, for an employee to be entitled to 12 weeks of unpaid leave under the Family and Medical Leave Act (FMLA), he must have worked for the employer for at least 12 months and at least 1,250 hours during the preceding 12-month period.In addition, the company must employ at least 50 workers within 75 miles of his work site. 

If the employee doesn't meet all three criteria, he isn't entitled to protection under the Act. But what if you publish an employee handbook or issue a notice stating that employees qualify for FMLA leave if they meet only two of the eligibility requirements? And what if an employee, relying on that statement, takes 12 weeks of leave that he believes is FMLA-qualifying, is fired before he completes the leave, and can show that he would have returned to work at the end of the 12- week period had he not been fired? 

The Seventh U.S. Circuit Court of Appeals considered that very question and held that the employee may have a viable claim. Although the case didn't occur in Kentucky, the court's holding could apply to Kentucky employers. At the very least, you'll want to review your FMLA policy and any written notices to make sure you aren't making representations you might later regret (as the employer in this case undoubtedly did). 

Facts 

Steven Peters, a therapeutic specialist for Gilead Sciences, Inc., injured his neck and shoulder in 2001 and reaggravated the injury in October 2002. In December 2002, he had surgery and took what he believed was FMLA leave from December 5 until December 16. Gilead provided a written notice to Peters when he began leave, stating that to be eligible for FMLA benefits, an employee must have been employed by the company for at least 12 months and worked at least 1,250 hours over the previous 12-month period. 

The language in the notice was nearly identical to that used in the employee handbook. Neither document mentioned the requirement of being employed at a work site with at least 50 employees or within a 75-mile radius of other Gilead work sites that, in total, employed 50 or more workers. The notice went on to state the date Peters' leave commenced and that he had to return to work by February 28, 2003 (12 weeks later), to be guaranteed reinstatement. 

On March 4, 2003, Peters began a second leave that lasted until May 5. At the beginning of the leave, Gilead sent him a letter similar to the first one. This letter, however, mistakenly stated that his first leave ended January 26, 2003, and that he would thus need to return to work by April 4 to be guaranteed reinstatement. To provide Peters with 12 full weeks of leave, Gilead would have to have stated a return date of May 9. In any event, Peters never received the letter. 

When Peters didn't return to work on April 4, Gilead decided to replace him, and on April 25, it sent him a letter informing him that his position had been filled. He was offered a different position, which he refused. His doctor released him to return to work on May 5, which was before the end of the combined 12-week period of leave he would have been entitled to had the leave been calculated correctly. 

Peters filed suit against Gilead in federal court, alleging violations of Title VII of the Civil Rights Act of 1964, the FMLA, and the Americans with Disabilities Act. He also sued for retaliatory discharge and promissory estoppel under Indiana law. "Promissory estoppel" occurs when an employer makes a promise and an employee relies on that promise to his detriment. Gilead asked the court to dismiss the case without a trial, which the court did, and Peters appealed to the Seventh Circuit. 

Court's decision 

Because Peters didn't work at a work site that employed 50 workers or was within a 75-mile radius of other Gilead work sites that, in total, employed 50 or more workers, the court determined that he wasn't eligible for protection under the FMLA. But that didn't eliminate Gilead's potential liability for terminating his employment before the expiration of what would otherwise have been 12 weeks of FMLA leave. 

The court noted that Gilead's employee handbook promised 12 weeks of leave for employees who had worked 12 months and at least 1,250 hours during the last 12 months (as Peters had). It further noted that Gilead repeated that promise in notices it sent to Peters. The court didn't address whether the handbook and notices created a binding contract. Instead, it skipped directly to Peters' claim that he was entitled to reinstatement. 

Peters argued that it shouldn't matter whether the handbook and notices created a binding contract. He had relied on Gilead's promises (to his detriment) that he was entitled to 12 weeks of leave as well as reinstatement to his former position so long as he returned to work by the end of the 12-week period. 

Observing that there is no reason why employers cannot offer FMLA-like leave benefits using eligibility requirements less restrictive than the FMLA, the court reversed. It will now be up to the trial court to determine whether the provisions of Gilead's handbook are enforceable as a contract under Indiana law. 

Bottom line 

This is a good time to take a look at your employee handbook and any written notices you've given to employees. If you don't have at least 50 employees (or you didn't have at least 50 last year), you are not covered by the FMLA and shouldn't lead employees to believe they are entitled to protections provided by the Act. The same is true if you have fewer than 50 employees within a 75-mile radius of any work site. 

If you are a covered employer and have at least some eligible employees, experienced employment counsel should review your FMLA policy and notices to make sure that an inadvertent misstatement or omission doesn't create rights that wouldn't otherwise exist. By taking these steps, you may avoid finding yourself on the wrong side of a breach of contract suit or, worse, on the end of a promise you can't keep. 

You can research the FMLA or any other employment law topic in the subscribers' area of www.HRhero.com, the website for Kentucky Employment Law Letter. Access to this online library is included in your newsletter subscription at no additional charge.

Copyright 2008 M. Lee Smith Publishers LLC

KENTUCKY EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems but rather to provide information about current developments in Kentucky employment law. Questions about individual problems should be addressed to the employment law attorney of your choice.

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