Handbook language can
lead to unintended FMLA liability
Based on employee handbook language granting leave under the Family and
Medical Leave Act (FMLA), the 7th U.S. Circuit Court of Appeals held that
an employee can proceed with state law claims for breach of contract or
promissory estoppel even though the employer had fewer than 50 employees.
While employers can certainly offer more generous FMLA-type leave benefits
if they so choose, inadvertent exclusion of FMLA eligibility requirements
from an employee handbook might subject employers to unintended liability
based on implied contract theories.
In Peters v. Gilead Sciences, Inc., an employee who suffered a
shoulder injury and underwent corrective surgery, took what he thought was
FMLA leave, as outlined in the employer's handbook and as further explained
to him in letters from the employer outlining his rights under the FMLA.
The handbook and letters recited the 12-month, 1,250-hour prerequisites
for FMLA eligibility, however, made no mention of the other key statutory
eligibility requirement that the employee be working at a worksite with
at least 50 employees within a 75-mile radius. In fact, the employer did
not have 50 employees within a 75-mile radius.
During a second leave, the employer replaced Peters with another employee
and sent a letter designating him as a “key” employee. Peters
sued in federal court alleging violations of the FMLA and state-law claims.
Although the FMLA claims were dismissed on summary judgment, the court found
that, based on the employee handbook and letters to the employee, the employee
could bring a state-law claim for promissory estoppel because of the employee's
detrimental reliance on the letters and handbook. The court concluded that
the employer offered "FMLA-like" leave benefits, using eligibility
requirements less restrictive than those in the FMLA (and had offered FMLA-like
leave to employees who worked at a worksite that did not have at least 50
employees within a 75-mile radius).
To avoid unintended liability, employers should ensure that their FMLA policies
and related documents reflect exactly the leave they intend to grant. |