Lay-offs and Leaves of Absence

Can an employer terminate an employee who is on a protected leave of absence under the Family and Medical Leave Act ("FMLA") and/or applicable state leave law?

The FMLA provides a protected leave of absence of up to 12 weeks (or 26 weeks if the leave is to care for a covered servicemember) for eligible employees for qualifying reasons. 

In order to be eligible, an employee must have worked for the employer for 12 months (need not be consecutive); worked 1,250 hours in the 12 months prior to the leave; and, work at a worksite with 50 or more employees within a 75 mile radius. 

If the employee meets these eligibility requirements, then s/he can take a FMLA for any of the following qualifying reasons: care of a child following the birth or adoption of the child, or placement of the child for foster care; the care of a parent, child or spouse with a serious health condition; treatment of the employee's own serious health condition; care of a covered servicemember; or any qualifying exigency arising because a covered family member is called to active duty.

Recent amendments to the FMLA regulations changed both the employer and employee notice requirements; changed certification requirements; and, clarified the parameters of leave to care for a covered servicemember and due to a qualifying exigency when a covered family member is called to active duty. (For more information on the FMLA and the recent amendments see the Fox Rothschild Family and Medical Leave Act blog at: fmla.foxrothschild.com/)

Employees also may be entitled to leave under an applicable state leave law.  Moreover, in CA, NJ and WA, the employee may be entitled to paid leave through state-administered leave benefits.

If an employer is covered by the FMLA (has 50 or more employees); the employee is eligible; and the leave is for a qualifying reason, then the leave of absence is protected - meaning that the employee is entitled to be reinstated to the same or equivalent position with equivalent pay, benefits, and terms of conditions of employment. 

However, this right to reinstatement is not absolute.  An employee has no greater right to reinstatement or to other benefits than if the employee had been continuously employed during the FMLA leave period.  Specifically, an employee may not be entitled to reinstatement if: s/he unequivocally states his/her intention not to return from the leave; is a "key employee" (among the top 10% highest paid employees at the worksite) and reinstatement would cause the employer substantial and grievous economic injury; obtains the leave fraudulently; fails to provide a required fitness for duty certification; or, if the employee's position was eliminated or otherwise altered while the employee was on leave if it would have been eliminated or altered even if s/he had not been on leave.

Accordingly, if a position is chosen for lay-off, a protected leave of absence will not necessarily insulate the employee.  However, return to a position slated for lay-off when the employee's original position was not is not reinstatement to an equivalent position.   Employers should take into consideration whether an employee is on leave or recently took a leave when analyzing the impact of a reduction in force.  In addition, the non-discriminatory rationale for implementing a RIF and choosing an employee for lay-off should be documented.  For example, a list of slated employees or positions drafted before an employee requests a leave is strong evidence that the termination was unrelated.

Employees who are taking or have recently taken a leave of absence also may be subject to termination for reasons other than a reduction in force, such as performance or absenteeism.  Employers can hold employees to the same attendance standards as other employees, but any FMLA or other protected absences must be removed from consideration.  Accordingly, the reason for an absence must be carefully tracked and recorded if FMLA or other protected leave has been approved.

If performance or disciplinary issues arise during a leave, an employer can treat the employee on leave in the same manner as other employees, again keeping discrimination and retaliation claims in mind.  Employers should consider waiting until the employee returns and address the issues then.  If there are pending issues when an employee commences leave, such as  a Performance Improvement Plan ("PIP"), the employer can advise the employee that it is extending the protected leave, but those issues will  be addressed when the employee returns (such as continuing the PIP).

What if an employee works for another employer while on FMLA or other protected leave?  Unless the leave is fraudulently obtained, other employment will not necessarily disqualify an employee for reinstatement unless the employer has a uniformly-applied policy prohibiting outside or supplemental employment.

Alternatively, the end of the leave does not always end the employee's protections.  An employee may be entitled to additional time under a company policy or as a reasonable accommodation of a disability. 

In sum, when separating an employee on a protected leave for any reason, an employer must:

- make sure it has complied with the employee's leave rights

- make sure the reason for the termination is objective and well-documented

- not discriminate on the basis of leave (or for another reason that places the employee in a protected class, such as pregnancy, disability or association with someone with a disability)

- not retaliate against the employee for exercising his/her leave rights.

As employee leave rights expand and paid leave becomes available, more employees may request a protected leave of absence. Some employees may do so in an attempt to preserve their position - at least during the term of the leave.  While a protected leave of absence isn't insurance against termination, employers should make sure the decision doesn't interfere with an employee's rights under the FMLA or other applicable leave laws.