As demonstrated by the Sixth Circuit’s recent decision in Farhner v. United Transportation Union Discipline Income Protection Program, a well-drafted ERISA income protection or severance pay plan should enable the plan administrator to rely on the employer’s stated reason for termination of an employee, rather than conducting an independent review of the facts regarding the termination.

In May 2004, Mark Farhner, a trackman and conductor for the Kansas City Southern Railroad sought a three-month leave of absence for "medical reasons." KCSR’s human resources manager requested additional information from Farhner to justify his request. When Farhner’s vacation leave had been exhausted, his supervisor told him that he needed to provide the requested documentation or return to work within 48 hours. Rather than doing either, Farhner faxed a request for FMLA leave. After conducting an investigation (which included an actual hearing), KCSR terminated Farhner for insubordination.

Continue Reading Sixth Circuit Upholds Denial of ERISA-Based Income Protection Benefits; Plan Administrator Need Not Investigate Whether the Employer Violated FMLA