Employers Cautioned When Taking Employment Action Related to Use of FMLA Leave

Employee absences due to the use of federal and state protected leave entitlements can create hardships for employers.  Employee absences can be disruptive, cause overtime, delay projects, or present other similar hardships and frustrations for employers.  As a result, it is in some instances in the employer’s interest to evaluate potential abuses of protected leave benefits, including leave taken under the protection of state and federal Family Medical Leave Act (FMLA) entitlement.  The proliferation of social media has increased employer awareness of employee activities while on leave, including conduct that may appear to be an abuse of leave rights.

To be certain, abuse or misrepresentations by employees in the context of protected leave can be actionable misconduct.  It is critical, however, that an employer thoroughly investigate the situation before taking any adverse employment action.  One employer found this lesson out the hard way when a court affirmed a $1.3 Million jury verdict against the employer after it terminated an employee shortly after his return from FMLA leave.  DaPrato v. Massachusetts Water Resources Authority, 123 N.E.3d 737 (Mass. Sup. Ct. 2019).  The decision is not from a court in our jurisdiction, but is an excellent illustration of the concepts discussed.

The Facts of the Case

The employee in DaPrato was terminated when his employer learned that he had taken a trip to Mexico while on leave following surgery.

DaPrato took approved FMLA leave to undergo foot surgery.  His physician estimated he would require four to six weeks post-surgery for recovery.  Further, the documentation noted that DaPrato would be able to begin to put weight on his foot and wear a boot after four weeks. During his leave, he had also been approved for the employer’s salary continuation program to continue to receive his regular pay during leave.  Shortly after DaPrato returned to work, his employer’s HR department learned that he had taken a vacation to Mexico during his leave.  The employee planned the vacation and received approval from the employer some time before the leave.  However, the employer determined that taking the vacation while on leave was inappropriate.

Additionally, the employer obtained several excerpts from airport video surveillance showing DaPrato coming and going from the airport.  On departure, he was using crutches but was able to walk without crutches upon his return.

The employer interviewed DaPrato and confronted him about his vacation.  Ultimately, the employer terminated DePrato’s employment for misrepresenting his inability to work during the period he was on vacation, and as a result, receiving salary continuation benefits to which he was not entitled.  At trial, the employer’s HR director testified that she “wouldn’t think somebody who’s seriously ill or disabled would be able to be on vacation.”

During the trial, DaPrato testified that he was able to limit his mobility during vacation and not exert himself in a manner inconsistent with his recovery or inconsistent with restrictions imposed by his surgeon.  Likewise, he had been on crutches for some time, but as noted in the FMLA paperwork, DaPrato was able to begin putting weight on his foot and wear a boot as part of his recovery while still not cleared to return to work, which explained the airport video footage.  DaPrato also testified that he requested the opportunity to return to work earlier, but had been unable to get the physician’s certification to permit his early return.

Lastly, DaPrato testified that upon returning, he inquired about errors in his salary continuation pay, and requested a copy of the company’s policy via an email to the HR Director to avoid confusion in the future.  He specifically noted that he anticipated another surgical procedure in the near future and wanted to avoid any surprises with the leave and salary continuation process.  The Director did not provide the policy; rather, she forwarded the email to another manager in the HR department stating, “[i]s he serious?”, to which the manager replied, “OMG.”  This email correspondence made it into the record via discovery.

DaPrato’s allegations included retaliation for the use of protected leave and interference with future use of leave (as well as other related FMLA and ADA claims and state law claims of the same variety).

The Verdict and Court’s Decision

The jury awarded more than $1.3 million in damages – only $19,777 of which was back pay.  The remaining award consisted of damages for front pay (i.e., loss of future wages and benefits), emotional distress, punitive damages, and attorney’s fees.  The jury found that the employer’s decision to terminate was motivated by outrage at perceived abuses of FMLA (i.e., taking a vacation while receiving leave and pay benefits) and at the audacity to begin preparation for additional future leave.  The trial court modified some of the damages but ultimately confirmed – over the post-verdict objections of the employer – nearly the full verdict, still just over $1.3 Million.

On appeal, the employer argued that the trial judge had made several errors during the trial. All of its arguments were rejected on appeal.  First, the employer argued that the judge had improperly instructed the jury that it was not proper to penalize an employee simply for taking a vacation during an approved FMLA leave.  The instruction explained that an employer is permitted to take into account activities an employee engages in while on vacation, but the jury can consider such information only to the extent the employer actually did so before making its decision to terminate.  In this case, the employer introduced photographs it had acquired that showed DaPrato fishing while on vacation and, at one point, standing in the boat and holding up a fish that he had caught.  These photographs were not known to the employer at the time the employer decided to terminate, and therefore, the jury was instructed not to consider whether they showed him behaving in a manner inconsistent with his restrictions.  In other words the appeals court noted, whether the employer believed DaPrato was, in fact, able to work, the evidence it acquired after deciding to terminate his employment cannot serve to support that belief.

Second, the employer objected to the trial judge’s refusal to instruct the jury that it was not liable if it showed a good faith belief that the employee had abused his leave benefits.  The judge rejected this and refused to instruct the jury accordingly, and the appellate courts agreed.  In rejecting this request, the court noted that the FMLA provides a “good faith” defense for the imposition of punitive damages, which suggests that such a defense is not available to the underlying allegations of interference and retaliation.  In other words, according to this court, it would make no sense for there to be a good faith defense to punitive damages if it were, in fact, a defense to liability in the first instance.

On this point, there is significant federal court disagreement. Currently, the 7th Circuit case law does allow an employer to defend itself against liability as to retaliation claims if it acted with the “honest belief” the employee abused leave (Scruggs v. Carrier Corporation, 688 F.3d 821 (7th Cir. 2012).[1]

Finally, the employer objected to the judge’s award of punitive damages.  The FMLA requires the imposition of punitive damages equal to the amount of back pay and front pay awarded in the case unless the employer can establish that the conduct violating the FMLA was done in “good faith” and on “reasonable grounds” to believe it was lawful.  Establishing good faith requires the employer to show it reasonably and honestly “intended to ascertain the dictates of the FMLA and to act in conformance with it.”

The court affirmed the trial court’s decision that the employer may have believed the employee had abused his leave benefits, but it lacked reasonable grounds to conclude this at the time of the decision to terminate.  In reaching its conclusion, the court pointed out that the employer’s investigation did not include a review of DaPrato’s medical records and restrictions; rather, the decision appeared motivated by outrage at the vacation and brazenness of his alluding to another upcoming need for leave.  The court pointed out that the FMLA does not require convalescence to occur at home or in proximity to one’s home.  The court noted that an employee could recover from surgery “in a warm climate as well as in a New England winter.”

The unfortunate aspect of this case for the employer is that it may have turned out differently if the investigation had focused not on just the fact that DaPrato took a vacation during leave, but rather on whether his activity during his vacation (or any time during leave) was inconsistent with his serious health condition.  Had the employer done so, it may very well have concluded that the vacation was immaterial and not taken the adverse action.  Alternatively, if the employer had obtained all of the information and concluded that his activities were inconsistent with the specific limitations and medical conditions articulated by his physician before terminating his employment, it may have been able to convince a jury that it had an objectively reasonable basis to believe FMLA abuse had occurred and avoided punitive damages or potentially avoided any liability at all. 

Lessons for Employers

Employers should remember that absences for FMLA reasons do not preclude all other activities by the employee.  Taking a planned vacation may be perfectly compatible with FMLA.  This may also be the case for other activities that seem inappropriate at first, such as working another job, throwing back a few cocktails and posting pictures to social media sites, etc.  Employers must put away biases and frustrations, and avoid knee-jerk reactions when such situations present themselves.  Before taking any adverse action, employers must conduct an objective investigation focused on the actual medical restrictions imposed, the job duties at issue, and the employee’s actual conduct, as well as the employer’s policies, which may restrict behavior or compensation in certain instances.  If the conduct at issue reasonably supports a good faith finding of abuse of FMLA benefits, then adverse employment action can be defended.  As noted, current law applicable to Wisconsin provides a defense to liability for FMLA retaliation claims and punitive damages, but not to interference claims.

Second, remember that all internal communications are subject to disclosure in the course of a lawsuit.  Employers should remind and educate employees – even HR professionals – that they should write all internal communications as if the author knows a jury or a court will review it.  Defending an employment lawsuit is difficult enough, but is exponentially more difficult when internal communications in the record support a claim that the employee was viewed poorly by internal decision-makers.  In this case, the email between the HR professionals almost exclusively supported the jury’s finding for the plaintiff on his FMLA interference claim.

Finally, this case is a good reminder to avoid pre-judging any situation before conducting a full and objective investigation.  It is easy to fall into the trap of making certain presumptions about employee conduct and then seeking evidence to support that assumption, rather than allowing the evidence to dictate the conclusions.  While the employer in this case may have had legitimate frustration with the employee, the failure to put those feelings aside and objectively evaluate the circumstances was a very costly mistake.

[1] The Seventh Circuit Court of Appeals is the federal court just below the Supreme Court whose decisions apply to employers in Wisconsin, as well as Illinois and Indiana.