The Sixth Circuit Court of Appeals has reversed a district court finding of summary judgment in the employer’s favor in Demyanovich v. Cadon Plating & Coatings et al., concluding that Cadon Plating may be a covered employer under the FMLA based on its relationship with an affiliated company and that its termination of an employee almost immediately after he requested FMLA leave may have violated both the FMLA and ADA.

Facts

Alan Demyanovich worked for Cadon Plating & Coatings for over 20 years as a helper, operator, and an area leader. In late 1998, Demyanovich experienced health problems.  His doctor diagnosed him with congestive heart failure. Demyanovich took 2-1/2 months of FMLA leave due in early 1999 and was cleared to return to work with two restrictions. Demyanovich was not to lift more than 50 lbs. and was not to work more than 40 hours per week.

Over the next 10 years, Demyanovich took FMLA leave several times for his heart and other medical reasons. In November of 2009, Demyanovich’s heart condition worsened, so he again requested FMLA leave. Demyanovich returned in mid-December with the same two restrictions. His physician also stated he was not to work overtime indefinitely. Around that same time, Demyanovich requested he be given lighter duty assignments, including switching to a sorting position, which would allow him to sit while working, or assigning him to a position at the end of the plant line, where he would not need to move as quickly. Cadon denied these requests and continued to schedule Demyanovich to work overtime.

Demyanovich went to his doctor again in February of 2010, during which time his doctor allegedly told him he should quit work and apply for social security disability benefits. In spite of that advice, Demyanovich returned to Cadon and requested FMLA leave. Al Ensign, Cadon’s Vice President, denied Demyanovich’s leave request, stating he believed Cadon did not have enough employees to be subject to the FMLA. Mr. Demyanovich also alleges Mr. Ensign informed him he no longer had enough points under Cadon’s attendance policy to take additional absences and called him a liability. Mr. Ensign terminated Mr. Demyanovich from employment in or around February 23 or 24^th.

Demyanovich Files Suit

Demyanovich sued Cadon and Ensign in federal district court in December of 2010.  His amended complaint included allegations of  FMLA interference, FMLA retaliation, disability discrimination, and ADA retaliation.  Cadon moved for summary judgment, which the district court granted.

The district court provided the following reasoning:

• Demyanovich was not an eligible employee under the Act, because he did not show he would have been able  to work after the end of his 12-week FMLA leave.
• Cadon did not have to accommodate him by modifying his work schedule or permitting him to take leave;
• Demyanovich could not work in any capacity; and
• Demyanovich failed to create a genuine issue of fact as to his FMLA retaliation claim,
• Demyanovich could not prove his ADA discrimination or retaliation claims because he was not a “qualified individual;” and
• The evidence unquestionably showed that Demyanovich was incapable of performing any job.

The court did, however, recognize a question of material fact remained whether Cadon was a covered employer under the FMLA.

The Sixth Circuit Disagrees

Demyanovich appealed to the Sixth Circuit Court of Appeals. The court ultimately reversed the district court’s ruling regarding the FMLA interference claim, FMLA retaliation, and the ADA claim.

Coverage Under the FMLA

The court first examined whether Cadon, which not had more than 47 employees in the 13 months prior to Demyanovich’s leave request,  may be an “integrated employer” with an affiliated company that employed over 500 people. The court considered the following four factors:

1. Common management;
2. Interrelation between operations;
3. Centralized control of labor relations; and
4. Degree of common ownership/financial control.

According to the 6^th Circuit, Demyanovich provided sufficient evidence that  would allow a reasonable jury to conclude that Cadon and the affiliated company are integrated employers, bringing Cadon under coverage of the FMLA. The court found (1) Cadon and the affiliate shared several common managers; (2) the operations of the two entities are interrelated as a result of maintaining the same registered business address and jointly obtaining quality certifications; (3) the affiliated company exercised at least some control over Cadon’s labor relations; and (4) the same group of investors has owned both the affiliated company and Cadon for over 10 years.

FMLA Interference

Cadon’s – and more specifically Mr. Ensign’s — failure to consider that it might be an integrated employer with its affiliate ultimately proved fatal to the company’s effort to uphold the summary judgment on appeal.  Once the court concluded that there was sufficient evidence to permit a jury to conclude that Cadon was a covered employer under the FMLA, the Sixth Circuit had little difficulty finding that Demyanovich likewise had presented sufficient evidence to permit the merits of his ADA and FMLA claims to go to a jury as well.

First, the court rejected Cadon’s contention that Demyanovich never would have been able to return to work at the end of the 12 week period, refusing to draw the inference that Demyanovich was no longer capable of working because his doctor did not clear him to return to work as he had after prior examinations and because Demyanovich had applied for Social Security disability benefits. Finding sufficient evidence that Demyanovich might have been capable of returning to  one of the less physically demanding machine operator positions within the statutory period, the court found a genuine dispute as to whether he was entitled to FMLA benefits.

The burden then shifted to Cadon to articulate a legitimate business reason for terminating Demyanovich’s employment. Cadon claimed Demyanovich was terminated under the “no fault” attendance policy and that Demyanovich could not return to work at the end of the leave. Demyanovich provided sufficient evidence to demonstrate Cadon’s purported reasons for terminating him were pretextual. First, Demyanovich had not actually dropped to a zero-point attendance balance on the day he was terminated—he had 1 ½ attendance points remaining. Second, Ensign did not have access to information regarding Demyanovich’s physical limitations at that time he fired Demyanovich. The court found Demyanovich provided sufficient evidence to support the conclusion that Cadon interfered with his right to FMLA leave without a legitimate reason for doing so.

FMLA Retaliation

Demyanovich next alleged Ensign, his direct supervisor, made comments to him which demonstrated Ensign discriminated against him based on his health-related issues. Demyanovich alleged Ensign called him a liability after he made a request for FMLA leave. When given an opportunity to refute Demyanovich’s allegations, Cadon was unable to meet its burden of demonstrating it would have fired Demyanovich even if he had not requested FMLA leave. Although the court believed Demyanovich had successfully provided direct evidence of retaliation, the court again employed the McDonnell Douglas burden-shifting framework. The court held, “[b]y asking Ensign for FMLA leave, Demyanovich both engaged in protected activity and made his employer aware of it. His employment was terminated mere minutes after Demyanovich informed Ensign of intent to take leave.” The court reversed the district court’s grant of summary judgment in favor of Cadon as to FMLA retaliation.

ADA Claims

Last, Demyanovich demonstrated he could prove his prima facie case of disability discrimination under the McDonnell Douglas burden-shifting framework; (1) he is disabled; (2) is otherwise qualified to perform the essential functions of the machine operator position, with or without accommodation; and (3) he suffered an adverse employment action because of his disability. Demyanovich’s disability must also be the “but for” cause of the adverse employment action. Demyanovich demonstrated he was disabled because of his heart condition and diabetes substantially limit several major life activities. Also, as required under Lewis v. Humboldt Acquisition Corp., Demyanovich was required to show his disability was a “but for” cause of his termination, in that he would not have been terminated had he not asked to take FMLA leave to take care of his medical condition.

The court evaluated the one disputed point—whether Demyanovich was otherwise qualified to work as a machine operator at the time he was terminated. The court reviewed Ensign’s deposition testimony which described the line operator job as requiring several physically exerting activities and weighed it against Cadon’s written job descriptions, which did not specifically identify a lifting requirement or any other physical fitness requirement, and found there was no evidence that Demyanovich was incapable of performing the essential functions of at least some of the machine operator positions at the time of his termination. The court reversed the district court’s grant of summary judgment in favor of Cadon as to the disability discrimination claims.

Take-a-ways

• Employers must remember that although they have fewer than 50 employees, they may be found to be an “integrated employee” under the FMLA based on a relationship with an affiliated company.
• Employers should have designated human resources personnel handle FMLA leave requests to ensure compliance with the law.
• Employers should be careful not to usurp the role of medical professionals in determining an employee’s ability to work or return to work with restrictions and should not prejudge what an employee may or may not be able to do at the end of a leave of absence.
• Employers should not rely on inflexible maximum leave policies in evaluating the ongoing employment of employees on medical leaves of absence. The EEOC takes      the position that the ADA requires employers to consider whether additional leave might be a reasonable accommodation.