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Dismissal of Employees on Extended Sick Leave

Klein, Jeffrey S.Pappas, Nicholas J.

(August 2, 1999, New York Law Journal)


By Jeffrey S. Klein, Nicholas J. Pappas

When employees take extended sick leaves, employers often have no choice but to fill their positions with permanent replacements and thereafter to inform them that they will not be reinstated to any position at the conclusion of their leaves.  In enacting the Family and Medical Leave Act (FMLA) in 1993, Congress sought to limit the circumstances in which employers could take such actions. n1 Under the FMLA, an employer must, with certain exceptions, restore a covered employee to an equivalent position if the employee returns to work upon the conclusion of a 12 -week leave for the "serious health condition" of the employee or a member of the employee's immediate family. n2

Although the FMLA states that a covered employee is entitled to restoration to an equivalent position at the conclusion of 12 weeks of leave, the FMLA does not specifically address whether an employer's failure to restore an employee to his job following the 12-week period of leave violates other prohibitions of the FMLA.  For example, the FMLA makes it unlawful for an employer to "interfere with, restrain, or deny the exercise of or attempt to exercise, any right provided under the [FMLA]." n3  

Last month, in Sarno v. Douglas Elliman-Gibbons & Ives Inc., n4 the Second Circuit held that an employer's dismissal of an employee immediately upon the completion of an employee's 12th week of leave did not permit any inference that the employer interfered with, restrained, or denied the exercise or attempted exercise of rights provided by the FMLA.  The court's conclusion was not changed by the fact that the employer failed to comply with the requirements of regulations promulgated by the U.S. Department of Labor, which required the employer to notify the employee that he was entitled to take up to 12 weeks of leave.  Because his employer had permitted him to take medical leave to the full extent required by the FMLA and because the employee did not dispute that he was unable to return to work for two months after the end of the 12-week period, the court concluded, the plaintiff could not show that his former employer had violated the FMLA.

Background  

The employer, Douglas Elliman-Gibbons & Ives Inc. (DEGI), hired the plaintiff, Michael Sarno, as a payroll administrator in April 1994.  In May 1995, Sarno underwent a medical examination that revealed that a fall he recently had suffered at work had aggravated a pre-existing hernia condition. Sarno subsequently notified his supervisor that he planned to take a "Workers' Comp" leave from his position at DEGI.  In response, the company informed Sarno that his absence would be considered an unpaid leave under the FMLA for that calendar year.  

During the course of his leave, Sarno periodically spoke with his supervisor, but did not inform her as to any specific date by which he expected to be able to return to work.  DEGI's human resources director then telephoned Sarno on the date on which his 12-week FMLA leave was to end, and Sarno informed her that he was still disabled.  On the following day, the company's human resources director notified Sarno that DEGI needed to fill his position, and that because he had exhausted the 12 weeks of leave to which he was entitled under the FMLA, DEGI was terminating his employment.  At the time of this notification, Sarno's medical condition undisputedly prevented him from performing the essential functions of his position at DEGI.  

   Sarno subsequently sued his former employer, claiming that DEGI's alleged failure to inform him that he was entitled to only 12 weeks of leave under the FMLA constituted a violation of £ 105(a)(1) of the statute, which prohibits employers from "interfer[ing] with, restrain[ing], or denying the exercise of or the attempt to exercise" employees' rights under the FMLA. n5 In response, DEGI contended that it in fact had informed Sarno of this limitation on his FMLA rights, through notices posted at his worksite.  

   Following discovery, both parties moved for summary judgment.  The district court subsequently denied Sarno's motion and granted that of DEGI, concluding that any factual dispute as to whether Sarno had been notified that he was entitled to only 12 weeks of leave under the FMLA was immaterial, as he had received "the full benefits conveyed by the FMLA, namely, remaining on unpaid leave and enjoying insurance coverage for [12] weeks." n6  

The Second Circuit's Decision  

On appeal by Sarno, the Second Circuit affirmed the district court's dismissal of his claims, concluding that Sarno had failed to present any evidence that DEGI had unlawfully "interfere[d] with, restrain[ed] or denied" his exercise of his rights under the FMLA.  The court found that DEGI had complied with its obligations under the statute by allowing Sarno to take the full 12 weeks of leave to which he had been entitled, and by continuing his medical coverage throughout this period.  

In addition, the Second Circuit rejected Sarno's argument that his former employer had violated his FMLA rights by failing to notify him that his entitlement to leave under the statute was limited to 12 weeks.  The court noted that while an employee who takes FMLA leave normally is entitled to be restored to the position that he or she held before going on leave, or to an equivalent position, Sarno undisputedly had been unable to perform the essential functions of his position when his 12 weeks of FMLA leave expired.  

Sarno thus had no right, under the FMLA regulations promulgated by the Department of Labor, n7 to reclaim his former position, and accordingly the Second Circuit found that DEGI's alleged failure to inform Sarno of this limitation on his entitlement to FMLA leave could not logically have hindered him from returning to work.  

In reaching its decision, the Second Circuit expressly rejected the proposition that the mere fact of an employee's dismissal upon the conclusion of the 12th week of FMLA leave creates an inference of interference, restraint or denial of rights protected by the FMLA.  The Court likewise rejected the contention that the FMLA provides an employee with an independent right to be notified of the 12-week limitation on the leave to which the statute entitles him or her, and that an employee therefore may sue his or her employer for failing to provide such notice even where the employer's failure to do so has no effect on the employee's leave or reinstatement rights.
 
Implications of Decision  

Although the Sarno decision rejects the proposition that the FMLA provides employees with an absolute, enforceable right to be informed of the maximum leave to which they are entitled under the statute, employers would be well advised to avoid the course of action taken by DEGI in failing to comply fully with the United States Department of Labor's regulations regarding notification of employees of their FMLA rights.  Specifically, pursuant to these regulations employers should give to employees written notice as to their FMLA rights no less than the first time in each six-month period that such employees give notice of the need for FMLA leave. n8 When feasible, such notice should be provided within two business days of receiving the employee's notice of need for FMLA leave.  By providing the written notice specified in the regulations, the employer will avoid the argument that the employer interfered with, restrained or denied the employee's exercise or attempted exercise of rights under the FMLA.  

Indeed, in Sarno the Second Circuit did not resolve whether an employee would have a cause of action under the FMLA if, after taking 12 weeks of FMLA leave for a reason that would not have physically prevented him or her from returning to work (such as the adoption of a child or the care of a sick family member), the employee failed to return and was then terminated without having been notified of the 12-week limit to his or her leave entitlement.  Although the language of the FMLA indicates that such an employee likewise could not establish a cause of action, the Second Circuit in Sarno left open the possibility of such a claim. n9  

Another issue employers should consider before dismissing employees who fail to return to work after the 12th week of FMLA leave is whether the Americans With Disabilities Act (ADA) provides a cause of action for failure to restore the employee to his or her job.  Unlike the FMLA -- whose regulations, once again, state simply that an employee who is physically unable to perform an essential function of his or her position is not entitled to be restored to it after taking FMLA leave -- the ADA expressly requires an employer to grant a disabled employee's request for a "reasonable accommodation" that would permit the employee to carry out his or her job duties, provided that the employer can do so without suffering "undue hardship." n10 In the case at bar, Sarno did not allege in his case that he requested such a "reasonable accommodation" from his employer.  Nor did he allege that he could have returned to work upon the expiration of his FMLA leave if DEGI had provided him with such an accommodation.  

Employees who experience medical conditions that require extended leaves, however, often do communicate such requests to their employers.  Although employers certainly may conclude that holding an employee's position open for longer than the 12-week period mandated by the FMLA presents an "undue hardship" and, therefore, is not required by the ADA, employers should consider this issue with counsel carefully based on the applicable case law that continues to evolve on this issue. n11

In addition to the possibility of claims under the ADA, employers also should consider the possibility of claims under state Workers' Compensation or disability laws, which often prohibit discrimination or retaliation against employees for making claims for benefits under those statutes.  

Footnotes

n1 29 USC £ 2601 et seq.  
   n2 29 USC £ 2614(a)(1)
   n3 29 USC £ 2615(a)(1).
   n4 __ F3d __, 1999 WL 462669 (2d Cir. 1999).
   n5 See 29 USC £ 2615(a)(1).  Sarno also asserted claims of unlawful discrimination and retaliation under the Americans With Disabilities Act [ADA], on the theory that DEGI denied him a positive reference for a new job in retaliation for his filing a charge of disability discrimination with the Equal Employment Opportunity Commission.  Sarno's ADA claim was dismissed because he failed to offer any admissible evidence that DEGI caused or contributed to the rejection by the prospective employer.  1999 WL 462669, *4.  
   n6 17 FSupp2d 271, 275 (SDNY 1998). The district court likewise dismissed Sarno's claims under the ADA.
     n7 See 29 CFR 825.216(d) (If the employee has been on a workers' compensation absence during which FMLA leave has been taken concurrently, and after 12 weeks of FMLA leave the employee is unable to return to work, the employee no longer has the protections of FMLA and must look to the workers' compensation statute or ADA for any relief or protections).  
   n8 29 CFR £ 825.301(c).  When an employee takes FMLA leave, the regulations specify that the employer must give the employee written notice containing, at a minimum, the following information (i) that leave will be counted against the employee's 12-week entitlement; (ii) whether the employee will be required to provide medical certification and the consequences of failure to do so; (iii) the right of the employee or employer to substitute paid leave and any conditions accompanying such substitution; (iv) arrangements for payment of health insurance premiums; (v) whether a fitness for duty certificate will be required; (vi) whether the employee is a key employee and, if so, the possibility that leave may be denied; (vii) the employee's entitlement to be restored to the same or equivalent position at the end of the FMLA leave; and (viii) that the employee may be responsible for reimbursing the employer's portion of health premiums paid on the employee's behalf if the employee fails to return to work.  29 USC £ 825.301(b)(i)-(viii).  For a complete analysis of the requirements of the FMLA and regulations promulgated thereunder see "Analysis of New Family Leave Regulations," by Jeffrey S. Klein and Nicholas J. Pappas, New York Law Journal (April 3, 1995) at p. 3.  
   n9 As in the Sarno case, provided that the employer permitted the employee to take his or her 12 weeks of leave and maintained the employee's medical coverage throughout the leave, it would appear difficult for the employee to argue that his or her FMLA rights somehow were interfere[d] with, restrain[ed], or denied by his or her employer's actions  
   n10 See 42 USC £ 12112.  
   n11 Courts have reached varying outcomes in determining whether a disabled employee's request for an unpaid leave of absence in excess of the 12 weeks required by the FMLA constitutes a request for a reasonable accommodation that must be granted pursuant to the ADA.  See, e.g., Rascon v. U.S. West Communications Inc., 143 F3d 1324 (10th Cir. 1998) (leave of absence of approximately four months would have constituted reasonable accommodation); Powers v. Polygram Holding Inc., 40 FSupp2d 195 (SDNY 1999) (same); Watkins v. J&S Oil Co., 164 F3d 55 (1st Cir. 1998) (indefinite leave of absence would not have constituted reasonable accommodation); Monette v. Electronic Data Systems Corp., 90 F3d 1173 (6th Cir. 1996) (same).

Reprinted with permission from the August 2, 1999 edition of the New York Law Journal © 1999 ALM Properties, Inc. All Rights Reserved. Further duplication without permission is prohibited.

   
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