Executive Summary: A recent Sixth Circuit decision emphasizes the importance of informing employees how the employer will compute leave covered under the Family and Medical Leave Act (FMLA). In Thom v. American Standard, Inc., the court affirmed a partial summary judgment for an employee on his FMLA interference claim, finding the employer failed to inform the employee how it was computing his FMLA leave. The Sixth Circuit also held that the employer acted in bad faith when it terminated him, entitling the employee to double compensatory damages under the statute.
Computation of FMLA Leave
Thom requested FMLA leave from April 27, 2005 until June 27, 2005 for a non-work related shoulder injury. The company approved the leave request and provided Thom with paperwork showing a return to work date of June 27. Thom's doctor later cleared him to return to work on June 13.
The employer was informed of the doctor's change in return date and expected Thom to return on June 13. But the employer sent nothing to Thom to alert him that his return-to-work date had been modified. When Thom failed to return on June 13, his employer called and was informed that Thom was still having problems with his shoulder and would return to work on June 27. Thom stated he would work on getting a doctor's note confirming the need for the leave. Thom came to work on June 17 (before his original return-to-work date) with a note extending his leave until July 18, but the employer informed him that it had already terminated him for exceeding the number of absences allowed under the company's policy. The company counted the days after June 13 as unexcused absences.
As discussed below, employers may choose among four methods for computing FMLA leave. The company in Thom argued that under the "rolling" method, Thom's leave would have expired on June 13. Under the "calendar" method, however, Thom's leave theoretically would have extended through July 14. Thom argued that the employer erred in not letting him know, in writing or otherwise, that company policy was to use a "rolling" method of leave calculation. The Sixth Circuit agreed. While the company had modified its leave policy, effective March 1, 2005, to utilize the "rolling" method, it failed to tell Thom about the change or otherwise alert him that his official leave date would expire earlier than June 27, the day the company previously approved. The Court thus held that Thom was entitled to rely on the "calendar" method and the return-to-work date (June 27) that the company approved in writing.
The FMLA mandates double damages as liquidated damages unless the defendant can show it acted in good faith. Noting the strong presumption in favor of awarding liquidated damages, the Sixth Circuit remanded the case to the trial court for doubling of compensatory damages. In doing so, the court specifically criticized the company's after-the-fact reliance on the "rolling" method of calculation in light of its refusal to reinstate Thom when he brought the medical certification justifying his continued leave and in light of the fact it approved his leave through June 27.
The Four Methods For Computing FMLA Leave
The FMLA entitles an employee to a total of 12 work weeks of leave during any 12-month period because of a serious health condition that makes the employee unable to perform the functions of his or her position. For their part, employers are permitted to choose any one of four methods for determining the 12-month period in which the 12 weeks of leave entitlement occurs:
- The calendar year;
- Any fixed 12-month "leave year," such as a fiscal year, a year required by state law, or a year starting on an employee's "anniversary" date;
- The 12-month period measured forward from the date an employee's first FMLA leave begins; or,
- A "rolling" 12-month period measured backward from the date an employee uses any FMLA leave.
Here's a key point: Under the regulations, if a company does not specifically state to an employee requesting FMLA leave which option it will use to measure the 12-month period, the employee may use whatever option provides the most beneficial outcome to him or her.
Choices 1 and 2 above, while easier to administer, allow employees potentially to stack their FMLA leave, i.e. to take 12 weeks at the end of one calendar year and then immediately take 12 more at the start of the next year.
Choice 3 allows some measure of stacking as well. Example: Employee X takes 4 weeks of FMLA leave beginning February 1 of Year One, another 4 weeks beginning June 1 of Year One, and another four weeks beginning January 1 of Year Two. The employee would not be entitled to any additional FMLA leave until February 1 of Year Two. When the employee's new 12-month period begins on February 1 of Year Two, employee X would become entitled to 12 more weeks of leave. Thus, some stacking could occur because the employee could take 4 weeks of FMLA leave in January of Year Two and be entitled to an additional 12 weeks of leave beginning February 1 of Year Two.
While Choice 4 is harder to administer, it is the one most likely to prevent the stacking of leave. Example: Employee X takes 4 weeks of FMLA leave beginning February 1 of Year One, another 4 weeks beginning June 1 of Year One, and another 4 weeks beginning December 1 of Year One. The employee would not be entitled to any additional FMLA leave until February 1 of Year Two. However, on February 1 of Year Two, employee X would become entitled to four more weeks of leave (as he or she had taken 8 weeks of FMLA leave within the preceding 12 months).
No matter which choice the company picks, the company must give employees 60 days' notice before implementing the choice. This allows the employee to retain the full benefit of his or her 12 weeks of leave under whichever method affords the employee the greatest benefit.
The Bottom Line:
A company should determine what method it will utilize in computing FMLA leave, put it in writing, and alert all affected employees of the change. It would be a good idea to distribute the policy and have each employee sign an acknowledgment of receipt. A company must also look at each employee already out on FMLA leave or who has requested FMLA leave within the 60-day notice period and determine how that employee will be affected if changed, i.e., would the employee receive more leave if the employee had applied under a different choice? If so, the company must allow the employee the more liberal way to determine the 12-month period for FMLA leave but state how the period will be calculated for any subsequent requests, and then apply it consistently.
If you have any questions regarding this decision, please contact the author of this article, Michelle Tatum, firstname.lastname@example.org, who is an attorney in our Jacksonville office, or the Ford & Harrison attorney with whom you usually work.