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Dismissal of Employees on Extended Sick Leave

By Jeffrey S. Klein, Nicholas J. Pappas and Brian D. Carlson

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.  Under the FMLA, a covered employee who is absent from work for up to twelve weeks during a one-year period due to a “serious health condition” experienced by the employee is normally entitled to be restored to the position that he or she held prior to taking leave, or to an equivalent position.1

In addition to requiring that an employee who takes a covered leave of absence be restored to his or her former position or an equivalent position, 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 statute].”  The FMLA does not specifically address, however, whether an employer that fails to restore an employee to his or her job following a leave may be found to have unlawfully “interfere[d] with, restrain[ed], or den[ied]” the employee’s exercise or attempted exercise of his or her FMLA rights.

In a decision last summer, Sarno v. Douglas Elliman-Gibbons & Ives, Inc.,2 the Second Circuit held that an employer’s dismissal of an employee immediately upon the completion of the employee’s twelfth week of medical leave did not permit any inference that the employer had interfered with, restrained, or denied the employee’s exercise or attempted exercise of rights provided by the FMLA.  The court reached this conclusion in spite of the fact that the employer had failed to comply with regulations promulgated by the United States Department of Labor requiring employers to notify employees taking FMLA leave that they are entitled under the statute to take a maximum of twelve weeks of leave in a one-year period.  Because the employer had permitted the plaintiff to take medical leave to the full extent required by the FMLA, and because the plaintiff admittedly was unable to return to work for two months after the end of the twelve-week period, the Sarno court concluded that the plaintiff could not show that his former employer had violated the FMLA.

The employer in the case, 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 his leave, Sarno periodically spoke with his supervisor, but did not inform her of 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 twelve-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 twelve 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 filed suit against his former employer, claiming that DEGI had failed to inform him that he was entitled to only twelve weeks of leave under the FMLA, and that the company thereby had violated the provision of the statute prohibiting employers from interfering with, restraining or denying employees’ exercise or attempted exercise of their FMLA rights.  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 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 twelve 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 twelve weeks.”3  

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 interfered with, restrained or denied his exercise or attempted 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 twelve weeks of leave to which he had been entitled, and by continuing his medical coverage throughout this time period.  In addition, the Second Circuit rejected Sarno’s argument that DEGI had violated his FMLA rights by failing to notify him that his entitlement to leave under the statute was limited to twelve weeks.  The court noted that while an employee who takes FMLA leave normally is entitled to be restored to his or her former position or an equivalent position, Sarno undisputedly had been unable to perform the essential functions of his position at the time that his twelve weeks of FMLA leave expired.  Sarno thus had no right under the FMLA to reclaim the position he had held prior to his leave, and the Second Circuit accordingly concluded that DEGI’s alleged failure to inform Sarno of this limitation on his entitlement to FMLA leave could not 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 his or her twelfth week of FMLA leave creates an inference that the employee’s rights under the statute have been restrained, denied or interfered with.  The court likewise rejected Sarno’s contention that the FMLA provides employees with an independent right to be notified of the twelve-week limitation on the leave to which the statute entitles them, 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 the 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 Department of Labor’s regulations regarding notification to employees of their FMLA rights.  These regulations specify that an employee must be provided with written notice of his or her FMLA rights at least as often as the first time in each six-month period that the employee informs the employer of his or her need for FMLA leave.4  Such notice should be provided, if possible, within two business days of an employer’s receipt of an employee’s request for FMLA leave.

Indeed, in Sarno, the Second Circuit declined to decide whether an employee would have a cause of action under the FMLA if, after taking twelve 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 twelve-week limitation on his or her leave entitlement.  Although the language of the FMLA indicates that an employee could not assert such a cause of action, the Sarno decision leaves open the possibility of such a claim.

Another issue that an employer should consider before dismissing an employee who fails to return to work at the conclusion of his or her twelfth week of FMLA leave is whether the employee could assert a claim that his or her termination violated the Americans With Disabilities Act (“ADA”).  In contrast to the FMLA — whose regulations provide simply that an employee who is 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 requires that an employer 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.”

In the Sarno case, the plaintiff did not allege that he had asked his employer for any type of accommodation that would have permitted him to return to work at the conclusion of his twelfth week of FMLA leave.  Employees who take FMLA leave due to serious medical conditions, however, often request that they be permitted to extend their leaves beyond the twelve weeks mandated by the FMLA, and some courts have held that an employer’s refusal of such a request may constitute a denial of a “reasonable accommodation” in violation of the ADA.5  Other courts, by contrast, have rejected plaintiffs’ claims that such an extended leave would constitute a reasonable accommodation under the ADA.6  As decisions on this issue are highly fact-specific, an employer faced with a request by an employee for an FMLA leave extending beyond the twelve weeks required by the statute should seek the advice of its counsel before responding to the request.7

1.        The job-restoration rights created by the FMLA also apply to employees who take leaves of absence of up to twelve weeks because of (1) a serious health condition experienced by a member of an employee’s immediate family, or (2) the birth of a child to an employee, or (3) the placement of a child with an employee for adoption or foster care.

2.        183 F.3d 155 (2nd Cir. 1999).
3.        17 F. Supp. 2d 271, 275 (S.D.N.Y. 1998).  The district court likewise dismissed Sarno’s claims under the ADA.
4.        The regulations set forth numerous statement that must be included in such a notice, such as that the leave will be counted against the employee’s twelve-week FMLA entitlement, and that the employee is entitled to be restored to the same or an equivalent position at the end of his or her FMLA leave.  In addition, the regulations require that employers post notices at their worksites explaining employees’ FMLA rights, and that such information also be included in any employee handbooks or other written personnel policies used by employers.
5.        See, e.g., Rascon v. U.S. West Communications, Inc., 143 F.3d 1324 (10th Cir. 1998) (leave of absence of approximately four months would have constituted reasonable accommodation); Powers v. Polygram Holding, Inc., 40 F. Supp. 2d 195 (S.D.N.Y. 1999) (same).
6.        See, e.g., Watkins v. J&S Oil Co., Inc., 164 F.3d 55 (1st Cir. 1998) (indefinite leave of absence would not have constituted reasonable accommodation); Monette v. Electronic Data Systems Corp., 90 F.3d 1173 (6th Cir. 1996) (same).

7.        In addition, employers should consider the possibility of claims by disabled employees under state workers’ compensation or disability laws, which often prohibit discrimination or retaliation against employees for making claims for benefits under those statutes.