FMLA Anti-Fraud Provisions Sometimes Difficult to Enforce
An employee who is unable to work due to a serious health condition may be entitled to a leave of absence and reinstatement under the Family and Medical Leave Act (“FMLA”). Thus, an employee who does not have a serious health condition is not entitled to a leave of absence. Recent cases, however, show that some employers are finding it difficult to ensure that their employees obtain FMLA leave legitimately and, in addition, that employees actually use FMLA leave for the intended purposes.
Recent Problematic Cases
The most recent example of this somewhat discouraging trend is a case from Iowa, Jennings v. Mid-American Energy Co., 282 F. Supp. 2d 954 (S.D. Iowa 2003). The employer terminated an employee after co-workers twice reported seeing her on shopping trips while she was on intermittent FMLA leaves. In her FMLA lawsuit, the court denied the employer’s summary judgment motion. The judge reasoned that the employee should be allowed to prove at trial that her brief visit to a Toys R Us store was a permissible use of her leave time. The judge also ruled that she should be allowed to prove that she had not taken the second shopping trip, which she had denied, although a co-worker reportedly had seen her with “a cartful of goodies” at a Super Target.
This law firm had a similar experience in a recent case in Minnesota, which resulted in an unpublished decision. An employee requested vacation time for the express purpose of attending an out-of-state hot-rod convention. The employer denied his request because he had used all his vacation time. The next day, he called in sick. He then submitted a FMLA request form with the certification of a psychologist, who said that the employee needed a 30-day leave because he was suffering from depression. The employer retained a private investigator, who conducted videotaped surveillance of the employee working on his hot rod outside his home before the convention. The investigator also videotaped the employee while he was showing his hot rod at the convention. The employee, as you might expect, was terminated.
Again, however, the employer’s summary judgment motion was denied. The court ruled that the employee’s claim depended on whether he had a serious health condition, which was disputed in light of the psychologist’s certification. The judge also ruled that the employee should be allowed to prove that his activities while on leave did not constitute an abuse of his leave. The case was settled before trial.
The Source of the Problem
These results appear anomalous in light of the fact that the FMLA regulations expressly prohibit fraudulent FMLA leaves. The regulations state, “An employee who fraudulently obtains FMLA leave from an employer is not protected by the FMLA’s job restoration . . . benefits.” 29 C.F.R. § 825.312(g). The federal courts, however, rarely have invoked this provision. Perhaps the regulation is not broad enough for all circumstances since it does not expressly address the situation in which leave was properly “obtained” but later abused.
The larger problem, however, is the evidentiary burden that has evolved in case law. FMLA claims alleging a denial of FMLA rights (which arise under 29 U.S.C. § 2615(a)(1)) are treated differently than claims of FMLA retaliation (which arise under Section 2615(a)(2)), where the key question is the employer’s motive. In the latter type of case, the pertinent question is whether the termination was motivated by retaliation for the employee’s assertion of FMLA rights or, on the other hand, a non-discriminatory reason, such as the employee’s poor performance. In such a case, it may not matter whether the employee’s performance actually was good or bad. Rather, the relevant questions at trial are, first, whether the employer had a genuine belief that the employee was a poor performer and, second, whether that non-discriminatory reason (instead of a retaliatory reason) motivated the employer’s decision.
But cases of FMLA fraud and abuse often are not categorized as retaliation cases. Thus, the courts often do not ask whether the employer genuinely believed that the employee was not entitled to the leave taken. Rather, the courts tend to focus on the question whether the employee actually had a serious health condition, in which case the employer is strictly liable for any failure to give the employee his or her full FMLA rights.
In addition, when the courts ask whether the employee’s conduct while on leave was appropriate, an employer’s disapproving judgment is not dispositive. The employee and his or her medical professional may say that the activities were consistent with the purposes of the leave. In the second case described above, for example, the psychologist stated that the hot-rod convention actually would be therapeutic for the employee, and the court’s ruling allowed the employee to attempt to prove that fact at trial.
The case law is mixed, and the courts may eventually settle on a standard that is more favorable for employers. In the meantime, however, employers should be aware of the hazards in this situation. If an employer intends to terminate an employee because the employer believes the employee has engaged in FMLA fraud or abuse, the employer had better be correct.
Practical Safeguards
Employers, nonetheless, can take certain steps that might be of value in a subsequent lawsuit. For example, employers can adopt a written policy prohibiting employees from engaging in certain conduct while on FMLA leave. Such a policy proved worthwhile in a recent Tennessee case in which the court upheld, on summary judgment, the termination of an employee who spent his FMLA leave working in the family-owned business instead of staying home with a newborn child. The court relied on a company policy prohibiting “unauthorized work for personal gain while on leave,” and the employee did not dispute the violation of that policy. Pharakhone v. Nissan North America, Inc., 324 F.3d 405 (6th Cir. 2003). It may be more difficult, however, to draft a policy prohibiting non-income-producing activities (such as shopping or vacationing) while on leave. Furthermore, an employer’s policy likely could not overcome the advice of a medical professional if the employer’s policy and the professional’s advice were at odds.
As another example, employers may wish to request a second medical opinion concerning the employee’s condition, as permitted by FMLA regulations. This approach, however, is a double-edged sword. The second opinion could confirm the first, especially if the employee’s health condition is one that is difficult to detect or to measure by objective means.
In addition, because the relevant facts sometimes can be disputed, employers should question the employee with the goal of obtaining an admission. In addition, or perhaps as an alternative, employers should consider obtaining extrinsic sources of information, such as private investigators.
In sum, employers should be cautious about the risks of taking adverse action against an employee who appears to have fraudulently obtained FMLA leave or misused legitimate FMLA leave.
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