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Within weeks after her last appraisal, Cutcher began a six-week FMLA-approved leave for which she was paid under Kmart’s short-term disability leave policy. Then, just weeks later, Kmart announced a nationwide RIF which included the termination of six associates at the store where Cutcher worked. As part of the nationwide RIF process, the store was instructed to evaluate each associate’s performance based on the same core areas that were evaluated in the annual performance appraisals. The store then averaged the employee’s RIF appraisal score with their most recent performance appraisal score to arrive at the overall score that determined those associates to be terminated. One caveat in the scoring form was that the store had to comment on a significant change in the RIF appraisal score from that in the associate’s most recent performance appraisal. 

Cutcher’s RIF appraisal score was much lower than her most recent performance appraisal, made just one month earlier. As required, the store explained the difference by stating only poor customer and associate relations and “LOA.” Kmart denied that the leave notation formed the basis for Cutcher’s decreased RIF appraisal, but that LOA signified only that her termination had to be delayed until her return from leave, as mandated by Kmart’s national guidelines. Had Cutcher’s rating during the RIF been identical to her appraisal just weeks earlier, she would not have been selected for termination. 

In reversing the district court’s summary judgment ruling in favor of Kmart, The Sixth Circuit held that a disputed issue of material fact remained as to whether Kmart interfered with Cutcher’s FMLA rights and retaliated against her because she took the leave. That is, the Court explained that a reasonable fact finder could conclude that the termination was based on her leave because of the brief time between her annual appraisal and the lower RIF appraisal. Also significant was that Kmart had not documented any of the performance issues that it claimed supported the lower RIF appraisal. In fact, Cutcher had never been disciplined and her evaluators admitted they knew of no change in her performance during the minimal period between the annual and RIF appraisals. Moreover, the Court found that a jury could reject Kmart’s explanation that the change between appraisal resulted from the fact that Cutcher’s supervisor tended to rate associates higher than deserved to avoid confrontation. Lastly, the Court pointed to Kmart’s LOA notation on the RIF form as evidence that could support a finding in Cutcher’s favor. 

So, what lessons can we take from Cutcher v. Kmart? Whether in times of a RIF or simply standard business operations, attention must be paid to how managers evaluate their employees. It will always be the case that certain managers rate high or low as a practice, so if you can’t train the manager to rate in a more realistic manner, then at least document that particular manager’s practice. This will avoid the post-hoc allegation Kmart confronted and also lay the groundwork for later explaining potential differences in appraisals made by others. Furthermore, a termination analysis must be meticulously conducted and documented. Standing alone, a LOA notation on the section of a RIF form identifying the reason for a termination decision begs a court to deny summary judgment.   

Thus, as with any termination decision, attention to important details and careful documentation can protect the employer from an adverse decision like that in Cutcher v. Kmart.

OCRC Determination:

Ms. McFee filed a charge of discrimination with the Ohio Civil Rights Commission (OCRC). The Commission determined that Ms. McFee’s termination was unlawful and took the view that Ohio law requires that an employer provide a reasonable maternity leave regardless of the employer’s policy and regardless of length of service. Pataskala Oaks appealed and argued that employers may place a length of service requirement on leaves of absence, including those for pregnancy, so long as the requirement is evenly applied. The trial court reversed the Commission’s determination, and the OCRC appealed to the Fifth Appellate District Court of Appeals.

Appellate Opinion:

The appellate court looked to an Ohio administrative regulation implementing the pregnancy discrimination statute, Ohio Admin. Code (“OAC”) 4112-5-05. OAC 4112-5-05(G)(2) states, “[w]here termination of employment of an employee who is temporarily disabled due to pregnancy or a related medical condition is caused by an employment policy under which insufficient or no maternity leave is available, such termination shall constitute unlawful sex discrimination.” OAC 4112-5-05(G)(6) also states, “if the employer has no leave policy, childbearing must be considered by the employer to be a justification for leave of absence for a female employee for a reasonable period of time. Following childbirth, and upon signifying her intent to return within a reasonable time, such female employee shall be reinstated to her original position or to a position of like status and pay, without loss of service credits.”   (Emphasis added.) OAC 4112-5-05(G)(5) allows for employer leave policies and states that conditions on leave should be in accordance with the employer’s leave policy.

Pataskala Oaks argued that its leave policy was facially neutral and thus not discriminatory because Ms. McFee would have been terminated regardless of the reason for the leave—whether pregnancy-related or otherwise. The court, however, held that OAC 4112-5-05(G)(2) unambiguously applied to this situation and prohibited Ms. McFee’s termination because of her need for—but failure to qualify under the employer’s policy for—maternity leave. The court found this result to be consistent with the goals of the federal and Ohio pregnancy statute—to “ensur[e] that women will not lose their jobs on account of pregnancy disability” and to “ensure[] [that] a female employee is not put in a position of choosing between her job and the continuation of her pregnancy.” Thus, despite her lack of the requisite service required under the employer’s leave policy, the court held that Ms. McFee nevertheless was entitled to a “reasonable” maternity leave—a length of time that the court left undefined except to the extent that it upheld as reasonable the seven week leave recommended by Ms. McFee’s physician based on her individual circumstances.

This view, which admittedly is consistent with earlier Ohio state and federal court decisions, and the regulations on which it is based contradict the plain language of the Ohio statute, which states that “[w]omen affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected” because it requires employers to treat pregnant employees more favorably with respect to disability/medical leave than other non-pregnant female employees and male employees. The OCRC’s view on this issue and the administrative regulations also contradict the case law interpreting the federal Pregnancy Discrimination Act (PDA), on which the Ohio statute is based. Therefore, unless and until the Ohio Supreme Court has an opportunity to rule on this issue, the Nursing Care decision should serve as a reminder to employers in Ohio that the Ohio Civil Rights Commission takes the view—which was approved by the Fifth Appellate District in this decision—that all employees, regardless of length of service or the applicability of the FMLA, are entitled to reasonable pregnancy-related or maternity leave.   

Update!!

On July 29, 2009, the Ohio Supreme Court, with Justices Pfeifer and O'Donnell, dissenting, agreed to accept the defendant employer's appeal for review. We will keep you posted as this case proceeds to oral argument and decision. 

THE NEW POSTER

This step is pretty simple. Obtain copies of the new required poster. They must be posted in “conspicuous” places where employees are likely to see them.
  

NOTICES TO EMPLOYEES

General Notice

In addition to the poster, employers are required to give a “General Notice” to employees and new hires about the FMLA. The General Notice can be included in your employee handbook or other written summary of employee benefits. Employers that do not have an employee handbook or other written summary of employee benefits must give the General Notice in a written form. Appendix C to the regulations, which contains essentially the same language as the poster, can be used as this General Notice. The General Notice can also be accomplished electronically by directing employees to a company intranet or website.
 

Important: The language of the poster and Appendix C includes information not typically included in existing company FMLA policies. Therefore, it is likely that most employers will have to revise their FMLA handbook policies in order to comply with the General Notice requirements of the regulations. If your handbook policy will have to be revised, you should consider issuing a supplemental written FMLA notice to employees for the period of time between now and whenever your handbook will next be republished. 

Eligibility Notice/Rights and Responsibilities Notice

These notices are to be given to employees when they request FMLA leave for the first time during the 12-month period that you use for calculating FMLA eligibility. The Eligibility Notice lets the employee know whether they are or are not eligible for the FMLA leave requested. The Rights and Responsibilities Notice details the employee’s obligations and the employer’s policies concerning FMLA leave. The DOL has provided a prototype combined notice for the Eligibility and Rights and Responsibilities Notices. Give this notice to any employee seeking FMLA within five (5) business days of the request.
 

Designation Notice

The Designation Notice is to be given to employees after the company obtains sufficient information to determine whether the requested FMLA leave has been approved, such as after the employee submits the required medical certification. The Designation Notice has to be given within five (5) days after the company obtains information sufficient to determine whether the leave is FMLA-qualifying. The DOL has also issued an approved prototype Designation Notice.
 

Medical Certification Forms

The new regulations reference new approved medical certification forms, including separate forms for the serious health conditions of employees and those of family members. The forms are somewhat improved versions of the old suggested forms. The DOL medical certification forms are recommended examples only. They are not mandatory and employers are free to develop their own forms so long as they do not seek information beyond what is included in the DOL recommended forms.   As a result, most employers use the DOL forms. Also, though employers are not required to insist on medical certification at all if they are convinced of the legitimacy of the need for the leave, it is wise for them to get medical certification in any event, if only to assure consistency in their FMLA program and procedures.  
 

For your convenience, a complete set of the DOL prototype forms can be found at our earlier blog post.

The most important changes for employers are summarized below, listed in roughly the order they appear in the final regulations. 

Joint Employer Definition –

The final regulations contain new language clarifying that a joint employer relationship generally does not arise from “Professional Employer Organizations” in instances where the PEO “merely performs … administrative functions.” However, in circumstances where a PEO or vendor actually has the right to hire, fire, and assign work, a joint employer relationship is still likely to exist, “based on all the facts and circumstances.” 29 CFR § 825.106(b)(2).

Employee Eligibility –

To be eligible for FMLA protection, an employee must have worked with an employer for at least 12 months and for at least 1,250 hours in the last 12 months.  According to the final regulations, when measuring the 12-month requirement, employers are no longer required to count work performed before a break in service lasting seven years or more (a change from the proposed regulations, which had originally indicated that a five-year gap would be sufficient to disrupt eligibility). The final regulation provides that time for military service is not to be included in any gap determination. 29 CFR § 825.110(b).

Similarly, the hourly requirement has been rewritten, in keeping with USERRA, so that if an employee would have met the 1,250 hours to qualify but for intervening military service, he or she remains eligible for FMLA. 29 CFR § 825.110(c)(2).

The final regulations retain the proposed change clarifying that employees who become eligible for FMLA protection while in the middle of non-FMLA leave may automatically acquire FMLA protection. Leave that begins before FMLA eligibility may start out as “non-FMLA” qualifying leave, but if an employee becomes eligible for FMLA leave in the midst of the absence, FMLA protections are triggered from that point forward. 29 CFR § 825.110(d).

Serious Health Condition –

The final regulation retains the six familiar definitions for “serious health condition” contained in the 1995 original, though it adds a couple of clarifications.

One form of serious health condition involves an incapacity of more than three days and either (a) two visits with a health care provider (e.g., doctor) or (b) one such visit with a regimen of continuing treatment. The final regulations clarify that the first option only protects absences involving two or more doctor visits “within a 30-day period” and that both options require an “in-person” doctor visit within seven days of the onset of leave. 29 CFR § 825.115(a)(3). 

The definition for “chronic condition,” another form of serious health condition, now requires that employees continue to visit a health care provider at least twice per year to qualify. 29 CFR § 825.115(c)(1).

Placement of Adopted Child –

FMLA leave is available for the placement of adopted children. The final regulations retain the proposed clarification that FMLA leave may include time to “travel to another country to complete an adoption.”  FMLA eligibility is not affected by the “source of the adopted child.” 29 CFR § 825.121(a)(1).

Health Care Provider –

The long list of health care providers already eligible to prepare FMLA medical certifications and treat employees has been expanded by the final regulations to include “physician’s assistants.” 29 CFR § 825.125(b)(2).

Intermittent Leave –

Unfortunately, the final regulations still provide no useful guidance or changes regarding intermittent leave, despite widespread confusion and requests for clarification from employers.  Whereas the 1995 regulations included a statement that employees must “attempt” to schedule their intermittent leave so as not to “disrupt” the employer’s operations, the final regulations clarify that an employee “must make a reasonable effort” to schedule treatments so as not to “disrupt unduly” the employer’s operations. 29 CFR § 825.203. This appears to be a distinction without a difference.

Holidays –

Under the final regulations, where an employee takes a full week of FMLA leave, the fact that a holiday may occur within the week does not affect how much of an employee’s 12-week FMLA allowance has been used – the week is still counted as a full week of FMLA leave. However, if an employee is using FMLA leave in increments of less than one week, the intervening holiday will not count against the employee’s 12-week entitlement unless the employee was otherwise scheduled and expected to work during the holiday. 29 CFR § 825.200(h).

Attendance Bonus –

The 1995 regulations specifically required that employee bonuses based solely on attendance not be denied employees based solely on their absences related to FMLA leave. The final regulations now state that bonus awards can be properly based on the “achievement of a specified goal such as hours worked, products sold or perfect attendance” and therefore can be denied employees who have taken FMLA leave.  However, FMLA leave and similar non-FMLA leaves must be treated the same for purposes of such bonuses. 29 CFR § 825.215(c)(2).

Light Duty –

The FMLA permits an employer and employee to agree to a “light duty” schedule that allows the employee to continue working rather than take unpaid FMLA leave.  Under the 1995 regulations, such light duty time could be counted against the employee’s 12-week FMLA allowance, even though it technically was “working time” for the employee.  This provision has been entirely deleted from the final regulations so that now employees who accept light duty work need not exhaust any FMLA leave to do so. Employees may not be required to work light duty jobs in lieu of taking leave, and those who do so voluntarily are not on FMLA leave. 29 CFR § 825.207(e).

Waiver of Rights –

The 1995 regulations indicated that “[e]mployees cannot waive, nor may employers induce employees to waive, their rights under FMLA.” Some courts had construed this language as prohibiting settlement agreements and other retroactive waivers without DOL or court approval. The final regulations insert the word “prospective” before the word “rights,” and include an express provision permitting “the settlement or release of FMLA claims by employees based on past employer conduct without the approval of the Department of Labor or a court.” 29 CFR § 825.220(d).

Employer Notices –

And you thought your FMLA administration was already a bureaucratic nightmare. The final regulations now provide for four separate types of FMLA notice that must be provided by employers to employees: (1) “general notice” of employee FMLA rights, (2) “eligibility notice” to employees requesting FMLA leave, (3) “rights and responsibilities notice” to employees, and (4) “designation notice” indicating whether a given absence qualifies for FMLA leave.

“General notice” includes the conspicuous placement of the familiar poster listing employees’ FMLA rights, but the final regulations also include a requirement that new employees be separately apprised of their FMLA rights in writing, in an employee handbook or otherwise “upon hiring.” 29 CFR § 825.300(a).

“Eligibility notice” is largely a new concept in the final regulations. When an employee requests (or the employer identifies) a potential FMLA-qualifying leave for the first time during the applicable 12-month period, the employer must notify the employee of their FMLA eligibility status within 5 business days. If the employee is not eligible for FMLA leave, the notice must state “at least one reason” why the employee is ineligible. If the employee’s eligibility does not change by the next time FMLA leave is requested, no new eligibility notice needs to be provided. 29 CFR § 825.300(b). While eligibility notice may be provided by the employer orally or in writing, an approved form for this eligibility notice is provided by the DOL in an appendix to the final regulations.

“Rights and responsibilities notice” must be provided to employees in writing, detailing the employer’s expectations and any consequences of the employee’s failure to meet these expectations under the FMLA. Such notice must be provided with the “eligibility notice” described above and must include: (1) an explanation that if FMLA leave is granted it will be deducted from the employee’s 12-week allowance, (2) requirements for employees to submit medical certifications and the consequences for failing to do so, (3) any employer requirements regarding the substitution of paid leave such as sick time or vacation, (4) requirements for employee to maintain health benefits during FMLA leave, including payment of premiums, (5) key employee status, if applicable, (6) employee rights to maintain benefits and to job restoration following leave, and (7) the employee’s potential liability for unpaid health insurance premiums if the employee fails to return to work following leave. 29 CFR § 825.300(c). An approved prototype “rights and responsibilities notice” is provided by the DOL in an appendix.

“Designation notice” must be provided by employers in writing within five days (the analogous requirement in the 1995 regulations had required such notice within two days) after obtaining sufficient information to know whether a given absence is FMLA-qualifying or not. If leave is granted, the designation notice must include any “fitness-for-duty” certification that may be required by the employer before returning the employee to work. It also must specifically inform the employee of the amount of leave – “hours, days or weeks” – that will be deducted from the 12-week FMLA allowance. If this breakdown is unknown at the time the leave is granted (e.g., where the amount of leave is unforeseeable or sporadic), the employer must provide such information upon an employee’s request, but the employer need not provide such breakdowns more often than every 30 days. 29 CFR § 825.300(d). Again, an approved prototype “designation notice” is provided by the DOL in an appendix.

Employee Notice of FMLA-Qualifying Absence –

In a new development, the final regulations note the general rule that an employee need not mention the FMLA by name, but limit this freedom to circumstances “[w]hen an employee seeks leave for the first time for an FMLA qualifying reason.” However, once FMLA leave has been granted for an employee’s health condition, the employee must thereafter “specifically reference either the qualifying reason or the need for FMLA leave.” 29 CFR § 825.303(b).

The final regulations expressly clarify that an employee cannot merely call in “sick” and thereby trigger an affirmative duty for the employer to inquire further about whether the absence might be FMLA-qualifying. 29 CFR § 825.303(b).

The final regulations specify that even for unforeseeable leaves, it should be “practicable” for employees to request leave “either the same day or the next business day.” 29 CFR § 825.302(b). 

Employer’s Usual and Customary Procedures –

Under the final regulations, when the need for leave is not foreseeable, an employee must comply with the employer’s usual and customary notice and procedural requirements for requesting leave, absent unusual circumstances. Specifically, the new regulations generally permit employers to require employees to follow established call-in procedures (except ones that impose more stringent timing requirements than the regulations provide), and they provide that failure to properly notify employers of absences may cause a delay or denial of FMLA protections.  29 CFR § 825.302(d). Employers may require employees seeking FMLA leave to call a “designated number or a specific individual to request leave.” 29 CFR § 825.303(c). Under the 1995 regulations, an employer could not delay or deny FMLA leave if an employee failed to follow such procedures.

Medical Certification –

The final regulations include new approved medical certification forms, including separate forms for the serious health conditions of employees and those of family members. To streamline the processing of certifications, the final regulations allow health care providers to include medical facts about diagnoses, symptoms, hospitalization, doctors’ visits, prescription medication, referrals for evaluation or treatment (physical therapy, for example), or any other regimen of continuing treatment.

Employer Contacts with Health Care Providers –

The 1995 regulations prohibited direct contact between employers and health care providers in most instances. The new final regulations carve out an exception, allowing employers to contact physicians directly “[i]f an employee’s serious health condition may also be a disability within the meaning of the Americans with Disabilities Act,” so long as the more liberal restrictions of the ADA are observed. 29 CFR § 825.306(d). (Under the old and new regulations, employers may also contact employees in accordance with state workers’ compensation laws.)

The final regulations also permit an employer to make direct contact with the employee’s physician to seek “clarification and authentication” of medical certifications. Previously, only another physician hired by the employer could make such inquiries. However, in a change from the proposed amendments, the final regulations require that employers initiate such contacts only through “a health care provider, a human resources professional, a leave administrator, or a management official.” Importantly, “[u]nder no circumstances … may the employee’s direct supervisor contact the employee’s health care provider.”  29 CFR § 825.307(a). 

While the employee is not required to permit his or her doctor to communicate with the employer, the employer may deny the designation of FMLA leave for failure to consent. 29 CFR § 825.307(a).

Recertification –

The final regulations change and clarify an employer’s right to obtain recertification for a serious health condition. As with the 1995 regulations, an employer may require recertification no more than every 30 days, unless the circumstances of the leave change or the employer receives information that casts doubt on the legitimacy of the original certification. Under the final regulations, if the medical certification indicates that the underlying condition will last more than 30 days, the employer may not request recertification until that minimum duration has passed. In all cases, however, even where a medical certification indicates that the underlying condition is a “lifetime condition,” employers may always require recertification every 6 months in connection with an absence. 29 CFR § 825.308. These changes significantly clarify the old rule.

Fitness-for-Duty Certification –

The final regulations permit an employer to require that an employee obtain a certification from his or her health care provider that the employee is fit to resume work following FMLA leave. The employer may provide the employee with a list of the employee’s essential job duties together with the designation notice, described above, in which the employer originally advises the employee of the necessity for a fitness-for-duty certification. If the employer provides such a list of essential functions, it may require the employee’s health care provider to certify that the employee can perform them.  When completing a fitness-for-duty certification, the health care provider therefore must assess the employee’s ability to return to work against the identified essential functions. 29 CFR § 825.312(b).

While the general restriction on obtaining a new fitness-for-duty certification following each intermittent leave event remains intact, the final regulations carve out an exception: an employer is entitled to a certification of fitness to return to duty for intermittent absences up to once every 30 days if “reasonable safety concerns” exist regarding the employee’s ability to perform his or her duties. 29 CFR § 825.312(f).

FMLA Leave for Military Families –

A substantial portion of the final regulations is dedicated to providing first-time guidance on this year’s amendment to the FMLA to provide leave for employees who need time to fulfill military duties or to care for family members in the military.

The final regulations extend FMLA protection to employees who are needed to care for family members in the military with a serious injury or illness incurred in the line of duty. Likewise, the amendment allows families of National Guard and Reserve personnel on active duty to take FMLA job-protected leave in order to manage activities associated with their service, known as “qualifying exigencies.” 

The final regulation defines “qualifying exigencies” as: (1) short-notice deployment, (2) military events and related activities, (3) childcare and school activities, (4) financial and legal arrangements, (5) counseling, (6) rest and recuperation, (7) post-deployment activities, and (8) additional activities to which the employer consents. 29 CFR § 825.126(a).

Employees eligible for leave under both of these new initiatives are permitted to take up to 26 weeks of leave in a 12-month period. This leave may be taken separately from more conventional FMLA (i.e., for serious health conditions), so long as conventional FMLA leave does not exceed 12 weeks and the total leave does not exceed 26 weeks in the 12-month period. The final regulations include definitions for employee coverage and for certification of qualifying events giving rise to the leave. 

Unfortunately for the purposes of quick analysis, the new military leave provisions are intertwined throughout the existing regulations dealing with serious health conditions. We will provide a more detailed analysis of these provisions in the near future.

Although the final regulations largely retain the original February proposals related to leave for serious health conditions of employees and their family members, they contain a few employer-friendly clarifications and additions, along with practical forms for employers to use. These approved forms include new medical certifications (including now-separate forms for employees and family members), FMLA eligibility notices, and leave designation notices.

The DOL's final regulations also include the first long-awaited guidance on the January 2008 amendments to the FMLA statute (discussed here: " President Bush Expands Family and Medical Leave for Families of Servicemembers") pertaining to leave for military servicemembers and their families. The triggering definitions for "serious injury or illness of covered servicemembers" and "qualifying exigencies," which largely have been a mystery since the statutory amendments were enacted, have finally begun to reveal themselves.

The Employer Law Report will provide a complete review of the DOL's final regulations for the FMLA and their impact on employers in the near future. Be sure to check back soon for a full update.

In protesting her dismissal, Ms. Davis requested that her unexcused absences be approved for FMLA leave. Her employer, however, concluded that Ms. Davis really was not eligible for FMLA leave in 2005. Here’s what happened: Michigan Bell measured its 12-month period under the FMLA on a calendar-year basis. As a result, the company measured Ms. Davis’s entitlement to FMLA for calendar year 2005 on the first date of her proposed FMLA leave for 2005. Lo and behold, when the company looked back from that date over the previous year, it concluded that Ms. Davis had not worked the requisite 1,250 hours. Therefore, she was terminated.

Ms. Davis sued Michigan Bell claiming primarily that it had interfered with her FMLA rights by denying her FMLA benefits. In analyzing whether Ms. Davis was entitled to FMLA leave in 2005, the Sixth Circuit noted that the determination of FMLA eligibility "must be made as of the date leave commences" under 29 C.F.R. §825.110(d). If that date was measured as of September 24, 2004, then Ms. Davis was eligible for additional leave. If, however, the date is more properly measured in January 2005 when Ms. Davis sought additional leave for her chronic condition, then she was not eligible.

In concluding that Ms. Davis’s eligibility was properly re-evaluated by Michigan Bell at the beginning of calendar year 2005, the court noted that when an employee has a chronic health condition for which intermittent FMLA leave has been approved, the leave commences upon the occurrence of the first absence caused by the condition and it extends to cover every other absence caused by that condition during the same twelve-month FMLA period. Once a new 12-month FMLA period begins, however, any additional absences caused by that same chronic condition would constitute a new period of intermittent FMLA leave. Therefore, in other words, absences caused by the same chronic condition but occurring in different 12-month FMLA periods, constitute different periods of FMLA leave.

In Davis, Michigan Bell may have benefited from a perfect storm of events that permitted it to raise the eligibility issue. Indeed, the facts suggest that the eligibility argument was an afterthought once the employer realized that Ms. Davis had not actually worked the requisite 1,250 hours in the previous year.

In my experience, most employers have selected a rolling 12-month FMLA period to prevent abuse that could result from an employee stack one twelve-week FMLA leave at the beginning of one year upon the 12-week leave period at the end of that year. Nevertheless, those employers that have more concerns about rampant intermittent leave abuse may want to consider whether to go through the steps necessary under the FMLA to change to a calendar-year model.

The employee sued, claiming that the employer had interfered with her rights under the FMLA. She asserted that the officer’s report did not prove that she had committed fraud when she had called in sick because she was not scheduled to work when he observed her cutting grass. She argued that because she worked third shift, 11:00 p.m. to 7:00 a.m., and the video of her cutting the grass was taken in the morning after her shift was over, she could have been telling the truth when she called in sick the night before.

The court found it unnecessary to determine whether the employee had actually committed fraud when she called in sick. Rather, the court found that the employer was entitled to terminate her employment because it had an “honest suspicion,” based on employee reports and the officer’s observations, that she had committed fraud. As a result, the employer could not have had an improper motive in terminating her employment. Accordingly, the Seventh Circuit affirmed the lower court’s grant of summary judgment to the employer based on this “honest suspicion” standard.

Employers outside the Seventh Circuit should use caution if relying on the Vail decision. Although case law is somewhat inconsistent, the Sixth Circuit has held that motive is irrelevant in FMLA interference cases. Because the Seventh Circuit’s decision turned on an analysis of the employer’s motive, it is possible that a court in the Sixth Circuit might reach a different conclusion and require a showing of actual, rather than suspected, fraud.

The military family leave amendment took effect immediately, but left some key issues arising from the new leave categories unresolved. For example, rather than defining what constitutes a “qualifying exigency,” the Congress directed the Department of Labor to define the term in regulations. The DOL is also expected to develop new forms that employees, employers and medical providers can use in reference to the new leave categories. As of today, the DOL has not yet issued even proposed regulations for the military family leave amendment, and the final regulations and military leave forms may still be months away. At the same time, employers also are waiting to see what the DOL will do with respect to the proposed changes to the original FMLA regulations that were released for public comment in February of this year.

Many employers may be waiting for the DOL to issue the new FMLA regulations before revising their policies to include the new military family leave categories. This seems reasonable, but has not been expressly endorsed by the DOL as an acceptable approach. Thus, employers may be acting at their own peril if they wait too long to amend their FMLA policies to incorporate the new leave categories and to address additional issues related to the FMLA amendment. One thing that all employers covered by the FMLA should do immediately if they have not already done so is to post the Notice that the DOL did issue that advises employees of their new rights to military family leave. A copy of that posting is attached hereto, and the Notice can be obtained directly from the DOL's website. Posting of the DOL’s Military Family Leave Notice on employee bulletin boards where other employment law notices are posted is required by the FMLA. Moreover, by complying with this posting requirement, employers can say that they have informed employees of their new rights, albeit not as comprehensively as they will when they revise their employee handbook policies.

Joint Employer Definition –

Both the old and new regulations recognize that some employees may have “joint employers,” both of whom have responsibilities under the FMLA. The new regulations clarify that a joint employer relationship generally does not arise from “Professional Employment Organizations” or “HR Outsourcing Vendor” contracts, where the PEO or vendor “merely performs … administrative duties.” However, in the rare circumstance where a PEO or vendor actually has the right to hire, fire, and assign work, a joint employer relationship is still likely to exist.

Employee Eligibility –

To be eligible for FMLA protection, an employee must have worked with an employer for at least 12 months and for at least 1,250 hours in the last 12 months. According to the new regulations, when measuring the 12-month requirement, employers are no longer required to count work performed before a break in service of 5 years or more. An exception is made for breaks in service that were required by military service or pursuant to a written agreement.

The 1,250-hour requirement is similarly changed so that credit is given for military service, time away from the job that would otherwise prevent employees from meeting this requirement.

The new regulations clarify that employees who become eligible for FMLA protection while in the middle of non-FMLA leave may acquire FMLA protection. Leave that begins before FMLA eligibility may start out as “non-FMLA” qualifying leave. However, if an employee becomes eligible for FMLA leave in the midst of the absence, FMLA protections are triggered from that point forward.

Serious Health Condition –

The DOL has provided very little help to employers attempting to determine whether an employee has a “serious health condition” subject to FMLA protection. Two small clarifications have been added in the new regulations. 

One form of serious health condition involves an incapacity of more than three days and either (a) two doctor visits or (b) one doctor visit with a regimen of continuing treatment. The new regulations clarify that the first option only contemplates two or more doctor visits “within a 30-day period.”

Another form of serious health condition involves “chronic conditions.” The new regulations specify that, to qualify as a serious health condition, a chronic condition must require at least two periodic visits per year to a health care provider for treatment.

Placement of Adopted Child –

FMLA leave is available for the placement of adopted children. The new regulations specify that FMLA leave may include time to “travel to another country to complete an adoption.” FMLA eligibility is not affected by the “source of the adopted child.”

Health Care Provider –

The long list of health care providers already eligible to prepare FMLA medical certifications and treat employees has been expanded to include “physician’s assistants.”

Intermittent Leave –

The new regulations provide no useful guidance or changes regarding intermittent leave, despite widespread confusion and requests for clarification from employers. 

Attendance Bonus –

The old regulations specifically required that employee bonuses based solely on attendance not be denied employees solely because of absences related to FMLA leave. The new regulations clarify that bonuses can be properly “based on the achievement of a specified goal such as hours worked, products sold or perfect attendance” and therefore can be denied employees taking FMLA leave. However, FMLA leave and similar non-FMLA leaves must be treated the same for purposes of such bonuses.

Overtime –

The preamble to the regulations attempts to clarify how the FMLA applies when employees do not work scheduled overtime due to a qualifying leave. Specifically, if the employee would otherwise be required to work overtime hours, the hours the employee would have been required to (but did not) work may be counted against the employee’s 12-week FMLA entitlement. When the employee works a part-time or reduced schedule, the employee’s leave usage in any given week is proportionate to the employee’s scheduled hours in the week in which the leave is used.

Light Duty –

The FMLA permits an employer and employee to agree to a “light duty” schedule that allows the employee to continue working rather than take unpaid FMLA leave. Under the old regulations, such light duty time could be counted against the employee’s 12-week FMLA allowance, even though it technically was “working time” for the employee. This provision has been deleted from the new regulations so that employees who accept light duty work need not exhaust their FMLA leave to do so.

Waiver of Rights –

The FMLA prohibits employees from waiving their rights under the statute. The old regulations were ambiguous as to whether this prohibition applied retrospectively or only prospectively. The new regulations clarify that employers cannot induce employees to waive their FMLA rights prospectively, but employees can lawfully waive their FMLA rights after the fact, even without court or DOL approval. Importantly, the new regulations expressly permit employees to waive any hypothetical FMLA violations in settlement agreements without special oversight.

Employer Notice Regarding Eligibility –

Under the old regulations, an employer was required to designate FMLA leave “within two business days absent extenuating circumstances.” The new regulations require employers to notify employees of their intention to provide FMLA leave within five business days after learning of the employee’s FMLA-qualifying condition. 

The employer’s notice must provide employees with eligibility information, must detail the employee’s responsibilities, and must identify consequences for failure to comply. If the employee is not eligible for FMLA leave, the employer’s notice must so state and identify why. The DOL has created a “prototype eligibility notice” for this purpose that differs somewhat from the form provided with the old regulations. The new form includes language for additional inquiries regarding “incomplete” or “insufficient” medical certifications following the initial FMLA designation.

The new regulations clarify that employers may provide the FMLA designation notice immediately after receiving sufficient information to designate the leave as FMLA-qualifying. This appears to resolve a question under the old regulations as to whether employers are prohibited from unilaterally designating absences as FMLA leave where the employee refuses to submit necessary paperwork.

The new regulations codify the Supreme Court’s Ragsdale holding by specifying that employers may retroactively designate leave as FMLA-qualifying, so long as such designation does not “cause harm or injury to the employee.”

Employee Notice of FMLA-Qualifying Absence –

The new regulations retain the standing rule that an employee need not mention the FMLA by name to trigger its protection for a given absence. However, the new regulations do require employees to provide specific information to trigger the employer’s responsibilities. An employee’s notice of his or her need for leave should include: (a) an indication that a condition renders the employee (or family member) unable to work; (b) an anticipated duration of the absence; and (c) whether the employee (or family member) intends to visit a health care provider. This is a higher standard than was required by some courts under the old regulations. The new regulations expressly clarify that an employee cannot merely call in “sick” and thereby trigger a duty for the employer to inquire further about whether the absence is FMLA-qualifying.

The new regulations specify that employees must respond to an employer’s questions to determine whether an absence is FMLA-qualifying. Failure to do so may properly result in denial of FMLA leave.

Employer’s Usual and Customary Procedures –

The new regulations permit employers, absent unusual circumstances, to require employees to follow established call-in procedures (except ones that impose more stringent timing requirements than the regulations provide), and provide that failure to properly notify employers of absences may cause a delay or denial of FMLA protections. Specifically, employers may require employees seeking FMLA leave to call a “designated number or a specific individual to request leave.” Under the old regulations, an employer could not delay or deny FMLA leave if an employee failed to follow such procedures.

Medical Certification –

The new regulations add guidance as to what constitutes sufficient medical facts to support the existence of a serious health condition. Specifically, to streamline the certification form, the DOL proposes that such medical facts may include information about symptoms, hospitalization, doctors’ visits, prescription medication, referrals for evaluation or treatment (physical therapy, for example), or any other regimen of continuing treatment. In addition, the new regulations state that the health care provider may provide information on the diagnosis of the patient’s health condition but clarify that a diagnosis is not a required element of the certification form.

Employer Contacts with Physician –

The old regulations prohibited direct contact between employers and health care providers in most instances. The new regulations carve out an exception, allowing employers to contact physicians directly “[i]f an employee’s serious health condition may also be a disability within the meaning of the Americans with Disabilities Act,” so long as the more liberal restrictions of the ADA are observed. Under the old and new regulations, employers may also contact employees in accordance with state workers’ compensation laws.

The new regulations also permit an employer to make direct contact with the employee’s physician to seek “clarification and authentication” of medical certifications. Previously, only another physician hired by the employer could make such inquiries.

Fitness for Duty Certification –

The new regulations replace the requirement that a fitness-for-duty certification must only be a “simple statement” with the original statutory language that the employee must obtain a certification from his or her health care provider that the employee is able to resume work.  Under the new regulations, the employer may provide the employee with a list of the employee’s essential job duties together with the eligibility notice, in which the employer advises the employee of the necessity for a fitness-for-duty certification. If the employer provides such a list of essential functions, it may require the employee’s health care provider to certify that the employee can perform them.  When providing a fitness-for-duty certification, the health care provider therefore must assess the employee’s ability to return to work against the identified essential functions.

Family Leave in Connection with Injured Members of the Armed Forces and Qualifying Exigencies Related to Active Duty –

In the preamble to the new regulations, the DOL addresses the need to adopt regulations to implement the military family leave provisions of H.R. 4986, the National Defense Authorization Act for FY 2008, and seeks comments before issuing final regulations. Among several questions raised by the DOL are the following:

The DOL’s request for comments on the proposed regulations by April 11, 2008 leaves open the slim hope that additional and necessary revisions will be added to the final version. The new regulations do little or nothing to alleviate concerns about the ambiguous definition for “serious health condition,” and they provide no new insight or relief for calculating and tracking intermittent FMLA leave. Porter Wright will continue to monitor and report on the DOL’s communications concerning the new regulations.

The terms of the Act are effective immediately, and the DOL is working to issue implementing regulations. The regulations should clarify many of the uncertainties created by the statutory amendments and provide additional guidance to employers. In the interim, the DOL advises employers to act in good faith and to follow “FMLA-type procedures” where appropriate, as the Act amends the FMLA. The DOL also warns that the term “qualifying exigency” is not effective until the DOL issues regulations defining the term, but that, in the interim, employers are encouraged to provide this type of leave to qualifying employees. 

On a related note, FMLA regulations have almost single handedly guided employers in their efforts to comply with the FMLA. And, on that front, the DOL has sent proposed FMLA regulatory amendments – which should clarify some of the more familiar areas of employer confusion under the FMLA – to the Office of Management and Budget. Those regulations will be available in the Federal Register shortly.

Despite the agreement, Taylor sued in federal court, claiming retaliation for exercising her FMLA rights.  The district court found that her suit was barred by the waiver in the severance agreement, but the Fourth Circuit reversed.  In the Fourth Circuit’s view, the FMLA’s enforcement provisions were designed by both Congress and the DOL to mirror those of the Fair Labor Standards Act (FLSA).  For its part, the FLSA requires that both retrospective and prospective waivers have court or DOL approval.

Ironically, when the case was before the Fourth Circuit, the DOL filed an amicus (or friend-of-the-court) brief that sided with the employer.  In that brief, the DOL argued that only prospective waivers require court or DOL approval and that the applicable regulations permit settling disputed FMLA claims retrospectively or after the fact.  The DOL further asserted that its interpretation of the FMLA regulations should be given deference. I n interpreting the regulations in this way, the DOL argued that the FLSA is not similar to the FMLA because the FLSA, dealing with minimum wage and overtime issues, is designed to protect workers with the least bargaining power at the bottom of the pay scale.  The FMLA, in contrast, protects all workers and is similar to other employment statutes that allow retrospective settlements.

In light of the DOL’s position before the Fourth Circuit, the Supreme Court’s request for input from the department gives employers a reason to be optimistic that the Court will accept the appeal and issue an employer-friendly ruling.  Should the Supreme Court refuse to hear the case, as Taylor’s attorney has urged, the enforceability of FMLA releases in Ohio will be open to question – at least until the Sixth Circuit weighs in.    With any luck, the Supreme Court will make Sixth Circuit review unnecessary.