Revisiting FMLA Leave Designation: Is a New Standard Emerging?

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Revisiting FMLA Leave Designation: Is a New Standard Emerging?

April/May 2014

Managing and tracking FMLA leave typically tops the list of most challenging assignments for Human Resources. Imagine being relieved of those responsibilities and not facing legal liability. While a recent decision from the Ninth Circuit Court of Appeals in effect seemingly relieved an employer of its responsibility to designate FMLA leave, this decision may create more challenges for public employers. Although the decision raises legal issues for further review, it also serves as a reminder to employers to diligently identify and manage FMLA coverage.

The Ninth Circuit’s Recent Review of FMLA Designation

In Escriba v. Foster Poultry Farms, Inc., 743 F.3d 1236 (9th Cir. 2014), the Ninth Circuit upheld the dismissal of an employee who requested vacation leave to travel to Guatemala to care for her ailing father. The employee was terminated, not for taking the leave, but rather for failing to return or otherwise notifying her employer of her continued need for absence. As the employer had with other employees, it terminated Escriba for violation of its three day no-call, no-show rule.

The employee filed a federal lawsuit alleging that her termination interfered with her right to take job-protected leave under the Family Medical Leave Act to care for a family member with a serious health condition. The facts reflected that the employee asked for a two week vacation and informed her supervisor that her father was in a hospital in Guatemala. The employer asked the employee if she needed more time in Guatemala on different occasions. The employee indicated she was not asking for more than her two weeks of leave. Her supervisor processed her request as one for vacation leave and told her to go to HR if she needed additional time. Once in Guatemala, she determined that she would not be able to return within her allowed vacation window but did not contact her employer to request additional leave.

The employer maintained a policy that required employees to exhaust paid vacation leave concurrently with unpaid FMLA leave. At the same time, the employer represented that if an employee declined FMLA-protected leave, it would not affirmatively designate a leave as FMLA leave. Rather, the employer would preserve the employee’s ability to take paid leave and FMLA leave sequentially.

The primary legal issue before the court on appeal was whether the failure to affirmatively designate FMLA leave when the circumstances permitted amounted to a violation of the FMLA. As the court noted, a prima facie case of FMLA interference may exist when an employee proves: 1) the employee was eligible for FMLA protection; 2) the employer was covered under the FMLA; 3) the employee was entitled to FMLA leave for a qualifying reason; 4) the employee provided sufficient notice of the intent to take leave; and 5) the employer denied the employee FMLA benefits to which the employee was entitled. On the facts presented, the court concluded that the employee did not intend to take FMLA leave, and therefore, the employer could not have interfered with the employee’s rights.

The employee had argued conversely that the employer was required to designate her leave as FMLA leave, whether or not she requested such leave. In considering this argument, the court noted that the FMLA regulatory framework does impose a requirement on employers to obtain additional information regarding an employee’s leave in order to make an appropriate designation. See 29 C.F.R. 825.303(b). The regulations likewise impose a requirement on an employee to participate in this process. Id. The regulations make it clear that an employee “need not expressly assert rights under the FMLA or even mention the FMLA” in requesting protected leave. 29 C.F.R. 825.302(c). A number of cases have held that general information provided or made known to an employer is sufficient to trigger an employer’s obligation to inquire into the circumstances of leave and potentially start the FMLA process. For example, in Stevenson v. Hyre Electric Co., 505 F.3d 720 (7th Cir. 2007), the court determined that an employee’s unusual behavior could be sufficient to place an employer on notice that the employee needed FMLA leave. In Bachelder v. Am. W. Airlines, Inc., 259 F.3d 1112, 1130-31 (9th Cir. 2001), cited by the court in the Escriba decision, the court held that an employee’s two doctors’ notes regarding her absences put the employer on notice that the leave might be FMLA covered, specifically stating: “[T]he employer is responsible, having been notified of the reason for an employee’s absence, for being aware that the absence may qualify for FMLA protection.”

The court in Escriba declined to impose an obligation on the employer to designate leave when an employee “simply referenc[es] an FMLA-qualifying reason.” The court suggested that doing so could open an employer to liability for “forcing FMLA leave on the unwilling employee.” The court concluded that an employee could, then, “affirmatively decline to use FMLA leave, even if the underlying reason for seeking the leave would have invoked FMLA protections.” As a practical matter, the court noted that delaying the request of FMLA leave worked to the employee’s advantage under the employer’s policies, because it allowed her to take two weeks of vacation and twelve weeks of FMLA leave, extending the amount of time she was able to take off.

Impact of the Decision

This decision raises a number of points for further consideration, including whether it is in the employee or employer’s best interests not to designate a qualifying leave as FMLA leave when the conditions permit. From the employee’s perspective, if an employee’s qualifying leave is not designated as FMLA leave, the employee does not enjoy the benefit and job protections of the FMLA. From the employer’s perspective, the failure or inability to designate FMLA leave may have operational repercussions. Many public employees benefit from generous paid leave banks and more liberal leave roll-over policies than in other industries. Sequential leaves in the public sector might not simply result in an additional two weeks of leave, but rather in additional months of leave. Limited budgets and overstretched staff may put many public employers in a position where they are ill-situated to provide extended job-protected leaves to employees. Finally, for many public employers, civil service rules, union contracts, and statutory or policy provisions may reduce the flexibility to hire temporary employees or reassign duties of absent employees.

Presently, this decision holds limited precedent outside of the Ninth Circuit. All the same, the suggestion that the administration of FMLA leave turns on determining an employee’s intent should lead all employers to reexamine their current practices to promote consistency and clarity. Doing so can maximize the options for balancing the competing interests identified above and supporting compliance with the FMLA. The following aspects of FMLA administration should be considered:

1. Identifying Potentially-Qualifying Leaves and Starting the FMLA-Designation Process Immediately When these Leaves Arise.

A close read of the Escriba decision indicates that the court considered the employee’s intent in seeking the protections of the FMLA to be a critical factor in assessing the employer’s liability. The court was left to determine intent based on conflicting accounts of the employee’s request for leave. The FMLA regulations provide some guidance on the designation process, noting: “The employer’s decision to designate leave as FMLA-qualifying must be based only on information received from the employee or the employee’s spokesperson.” 29 C.F.R. § 825.301(a).

Regardless of what designation is ultimately made or not made regarding FMLA leave, the law contemplates that an employer at least inquire into the need for leave upon learning of a potentially-qualifying reason for leave:

In any circumstance where the employer does not have sufficient information about the reason for an employee’s use of leave, the employer should inquire further of the employee or the spokesperson to ascertain whether leave is potentially FMLA-qualifying. Once the employer has acquired knowledge that the leave is being taken for a FMLA-qualifying reason, the employer must notify the employee as provided in §825.300(d).

29 C.F.R. § 825.301(a). The “notification” requirement imposed on the employer under the regulations states: “The employer is responsible in all circumstances for designating leave as FMLA-qualifying, and for giving notice of the designation to the employee as provided in this section. When the employer has enough information to determine whether the leave is being taken for a FMLA-qualifying reason (e.g., after receiving a certification), the employer must notify the employee whether the leave will be designated and will be counted as FMLA leave within five business days absent extenuating circumstances.” 29 C.F.R. § 825.300(d). Finally, the regulations further provide that disputes regarding whether a leave qualifies as FMLA leave should be resolved through discussions between the employee and employer that are documented. 29 C.F.R. § 825.301(c).

Whether an employer does or does not ultimately designate an absence as FMLA leave, it is clear that the regulations impose an obligation on the employer to document the process and its decisions. The FMLA has developed prototype forms to facilitate this process, including a “Designation Notice” form. Many times, employers first issue employees the Department of Labor’s “Notice of Eligibility and Rights and Responsibilities” form upon learning of a potentially-qualifying absence, followed by the “Designation Notice” once the employer has sufficient information to make a designation. The corresponding paper trail these forms create can provide an undisputed record of how the employer determined whether the employee was entitled to leave and, as the Ninth Circuit emphasized, that the employee intended to take leave.

This documentation can serve a second important function. The Department of Labor forms address the many aspects of eligibility and qualification for FMLA leave. Eligibility issues relate to whether an employee has been employed for and worked at least one year and the required 1,250 hours in the twelve months preceding leave and whether the employee works at a worksite with at least 50 employees within a 75-mile radius to be an employee eligible for leave. The forms also address the issue of appropriate notice for leave and identify what additional information may be required to make a determination that the leave is or is not for a qualifying reason. An employer who “starts the paperwork process” in any potential FMLA situation will be better prepared to defend decisions and address liability issues than was the employer in the Escriba case.

Finally, separate from the issue of determining and documenting whether an employee “intended” to take FMLA leave, the documentation obtained through the Department of Labor forms can help employers to manage leaves. This documentation can be especially useful if an employee seeks to extend a leave or when an employee takes intermittent leave. The FMLA allows an employer to request further documentation under certain circumstances, including when circumstances described in a certification have changed or an employee requests an extension of leave. A written record of the initial conditions of leave can provide the justification to seek further documentation and obtain information to help the employer continue to manage its operations and legal obligations.

2. Familiarizing Supervisors with FMLA Requirements and Leave Policies

Because identifying and catching potential FMLA leaves can be critical in assessing an employer’s potential liability under the FMLA, in most instances, an employer’s interests are best served by taking steps to address FMLA coverage and to designate leaves appropriately. Many times, including in the Escriba case, direct supervisors are the ones who receive notification that an employee is requesting time off of work for whatever reason. A supervisor who fails to recognize that an employee is requesting leave for an FMLA-protected reason could create liability, most typically for failure to provide an employee with the protections of the FMLA.

As noted above, the regulations place a clear burden on employers to ascertain FMLA coverage. To minimize inadvertent liability for failure to designate a leave, supervisors can be directed to contact Human Resources or another position responsible for FMLA compliance when an employee indicates the need to be absent due to: the employee’s hospitalization overnight or a family member’s; a doctor’s visit that results in ongoing treatment that requires monitoring by a health care provider; an employee calls in for doctor’s visits two times within a 30-day window; a workplace injury; pregnancy; and/or after three consecutive days of absence for the employee’s medical condition or a family member’s medical condition. This can ensure that, at a minimum, documentation exists to establish that the employer made the effort to obtain information necessary to determine whether FMLA coverage applied.

Administering leave policies as written can also serve as an incentive for employees and employers to properly identify and administer FMLA coverage, which can serve to avoid the sorts of conflicts between FMLA and paid time off policies that were at issue in Escriba. For example, many employers limit the amount of sick leave an employee can take to care for a sick family member, and many policies restrict use of sick leave for a family member to a spouse or child only. The FMLA, on the other hand, allows an employee to take leave not just for a spouse or child with a serious health condition, but also for the employee’s parent with a serious health condition. Initial designation of FMLA leave may be the only means for providing leave under certain circumstances. Lax enforcement of leave policies, though, can blur or even forfeit an employer’s right to manage the amount and type of leave an employee takes. Both for liability and operational purposes, an employer’s interests are furthered by careful administration of leave policies and FMLA oversight.

3. Reviewing your Policies and Consulting Counsel over Affirmative Designations of FMLA Leave.

The court in Escriba suggested that affirmatively designating a leave as FMLA leave when an employee did not intend to take FMLA leave could “interfere” with the employee’s rights under the FMLA. As noted above, language in the regulations suggests that employers can and should designate leave when the employer knows that leave is for a qualifying reason. Certainly, prior case law, as noted above, suggests that an employer who fails to provide the protections of the FMLA when the employer had sufficient information to do so can be liable for violating the FMLA. On balance, affirmatively designating a qualifying leave as FMLA leave can provide benefits to the employee and employer as supported by the FMLA framework.

After the Escriba decision, though, employers may need to carefully evaluate the circumstances surrounding an employee’s absence to determine whether designating leave could leave the employer vulnerable to a potential claim for liability under the Ninth Circuit’s reasoning. Strong and consistent policy language may minimize this risk, for example by consistently requiring the concurrent use of paid time off with FMLA for qualifying absences. When questions arise about FMLA designation, employers should consult with counsel to comprehensively assess FMLA compliance.

Case law is made on the specific facts before a court. Time will tell what the effects are of the Escriba decision on FMLA administration and liability issues—was this a case that was limited to the facts presented, or do employers need to ensure that they know an employee’s intent to take or not to take FMLA leave and are only designating “intended” qualifying leaves as FMLA leave? While these boundaries develop, all employers are well-served by refreshing their understanding of the FMLA and properly implementing procedures to manage leave issues.

*As published in the NPELRA Connections Newsletter
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