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Recent FMLA Case Serves as Reminder to Employers About Importance of FMLA Policy

05.18.2009

 
In a recent case out of Illinois, an employee was terminated four days before returning to work after the birth of her child. She sued under the FMLA and for breach of contract under state law. The employer did not have 50 employees within 75 miles of the employee’s workplace, so, under the law, she was not eligible for FMLA.

To be eligible for FMLA leave, an employee must have worked for the employer for at least twelve months and at least 1,250 hours in the immediately preceding twelve month period. In addition, the employee must work at a worksite where there are at least fifty employees within a 75-mile radius. (It is this so-called “50/75” rule that creates the not uncommon scenario where an employer may have over 50 employees total and is thus covered by the FMLA, but the employees are spread out over a wide geographical area, so that no employee is actually eligible to take any leave under the FMLA.)

In the Illinois case, based on the fact that the employer had fewer than 50 employees within 75 miles of the employee’s worksite, the employer moved to dismiss the FMLA claim. The court denied the claim, focusing on two things.

First, the court focused on the section of the company’s employee handbook which discussed eligibility for FMLA leave. It provided only that, “Employees who satisfy all of the following requirements are eligible for FMLA leave: The employee has actively worked for the company for at least 12 months as of the first day of FMLA Leave. The 12 months need not be consecutive;” and “The employee has worked at least 1,250 hours…during the 12 month period immediately preceding the first day of FMLA leave.” The handbook did not include a reference to the “50/75” rule. In addition, representatives of the employer told the employee that she could have FMLA leave for the birth of her child.

Notwithstanding the fact that the employee was not technically entitled to FMLA leave based on the eligibility and coverage requirements of the law, the court permitted her FMLA claim to proceed. The court found that the company was “equitably estopped,” or prevented in the lawsuit, from arguing that the employee was not entitled to FMLA at all, based on the company’s FMLA policy language regarding eligibility and its representations to the plaintiff as to her entitlement to and its approval of her FMLA leave.

This is an unusual case, and other courts have ruled just the opposite—that if an employee does not meet the eligibility and coverage definitions of the FMLA, the employee has no FMLA claim. However, this case should caution employers to review the language of their FMLA policy carefully to ensure that it does not suggest unintended entitlements that an employee could later argue created a contractual right and that it will not prevent an employer from arguing that the employee is not covered by the FMLA. Although disclaimers regarding the employee’s at-will status and the company’s right to change the policies in the handbook at any time are helpful should litigation arise, carefully drafted language regarding the substantive provisions of the handbook is an even better defense. In addition, the revised FMLA regulations, released in January, create new notice obligations on employers and can themselves be the basis for FMLA claims. A carefully drafted and implemented FMLA policy is more important than ever.
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