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The
U.S. Supreme Court issued a major victory for employers in
an important case involving regulations under the federal Family & Medical
Leave Act (FMLA). As reported in the March 2002 Strategic Employer,
the case of Ragsdale v. Wolverine World Wide, Inc. involved
an employer who permitted an employee to take off 30 weeks
of leave with benefits for reasons that would qualify under
the FMLA. Wolverine refused her request for additional leave
or permission to work part time, and terminated her when she
did not return to work. The employee filed suit, alleging that
a Labor Department regulation under the FMLA required Wolverine
to grant her 12 additional weeks of leave because it had not
informed her that the 30-week absence would count against her
FMLA entitlement.
The
regulation in question provided that if an employer failed
to notify an employee that his/her absence was covered by the
FMLA, then the time off did not count against the employee's
annual 12-week FMLA leave entitlement. Many employers who were
otherwise still providing employees with all benefits under
the FMLA were nevertheless faced with being grossly penalized
for mere flaws in paperwork. The regulation exalted form over
substance, and not providing the right notice at the right
time was a big "gotcha."
The
U.S. Supreme Court affirmed the lower court's ruling, finding
that the regulation was in conflict with the statute and invalid
because it required Wolverine to grant Ragsdale more than 12
weeks of FMLA-compliant leave in one year. The Court discussed
how the FMLA subjects an employer that interferes with, restrains,
or denies the exercise of an employee's FMLA rights to liability
and requires the employer to post a notice of FMLA rights on
its premises. The regulations additionally require that an
employer give employees written notice that an absence will
be considered FMLA leave. The Court noted that, even assuming
that adding this requirement were valid, it was wrong to impose
some automatic punishment for failing to give the added notice.
This is because the FMLA requires an employee to show his/her
rights were prejudiced by the employer's failure to respect
the employee's FMLA rights. The regulation, however, punishes
an employer's failure to provide timely notice of the FMLA
designation by denying the employer any credit for leave granted
before the notice, without any showing of harm suffered by
the employee as a result of the lapse.
The
Court also noted that the resulting penalty of failing to give
the added notice (i.e., needing to give the employee another
12 weeks of leave) improperly amends the FMLA's fundamental
guarantee of entitlement to a "total" of 12 weeks
of leave in a 12-month period. Courts and agencies must respect
and give effect to such compromises. The Court held that the
regulation subverts the FMLA by entitling certain employees
to leave beyond the statutory mandate.
At
the same time, the Supreme Court did not rule that it would
be improper for the Department of Labor to adopt a regulation
requiring employers to provide employees going on FMLA leave
with a written notice and designation regarding their rights.
The thrust of the decision was based on the punitive nature
of the regulation, in that a flaw in the paperwork would result
in automatic liability for employers, and a severe punishment
by prohibiting employers from taking credit for leave that
had been granted before a notice was issued.
The
Court expressly noted that there may be instances where an
employee may be able to show that s/he would have acted differently
if s/he had been fully advised that an absence was designated
as FMLA and had his/her rights under the FMLA explained to
him/her. If the employee made such a showing, then the employer
would face liability. For this reason, it is still important
for employers to provide employees who take FMLA leave with
a written designation of the leave as counting against the
FMLA entitlement, plus a full and clear notice of their rights
under the FMLA. The difference now is that the consequences
of having flaws in the paperwork are dramatically reduced,
and common sense may now be applied to giving the notices.
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