A federal court in Ohio in December ruled that an employer may have violated the Family and Medical Leave Act (FMLA) when it extended a period of job probation it imposed on an employee by the length of time the employee used statutory leave. The ruling is drawing interest from many FMLA experts because it appears to contradict most employers´ understanding of the federal leave statute and U.S. Department of Labor (DOL) regulations implementing the act.
In Schmauch v. Honda of American Manufacturing Inc., No. C2-02-751, (S.D. Ohio Dec. 11, 2003), Judge Algenon Marbley of the U.S. District Court for Southern Ohio considered claims brought under the FMLA and the Uniformed Services Employment and Reemployment Rights Act (USERRA). In rejecting the employer´s motion to dismiss the allegations, the judge concluded that the plaintiff had advanced sufficient evidence from which a jury reasonably could find in his favor. While not directly binding in other cases and in other federal judicial districts, Judge Marbley´s reasoning might be persuasive to other judges. In any event, the ruling is likely to be cited in similar circumstances by employees (and former employees) protesting such treatment by their employers.
The case arose following Marc Schmauch´s termination by Honda in the summer of 2001 under its policy establishing requirements for workplace attendance. Under the company´s policy, employees were required to maintain a 98 percent attendance record. The calculation of that figure was not affected by periods away from work due to approved FMLA and USERRA leaves.
Honda´s Policy
Like many employers, Honda considered an employee´s failure to comply with attendance requirements to be a violation of applicable standards of conduct, leading to corrective action imposed through a system of progressive discipline. In the company´s system, those employees who violated the attendance policy, received counseling from supervisors and managers, and still remained below the targeted attendance level were placed in an "attendance improvement program" or "AIP."
Employers with programs similar to Honda´s likely understand the company´s view that the AIP initiative served as a behavioral modification device, designed to assist employees in improving their attendance habits. The program consisted of three two-month segments:
Schmauch was in the midst of an AIP period when he took approved FMLA and military leaves - which did not lead to adverse action, but were used to extend the term of the AIP by the length of time he was away from work. While on the prolonged AIP and in the final two-month period in which he was permitted no further absences, the employee had an attendance occurrence, which led to Honda´s decision to terminate his employment.
Schmauch filed suit, alleging principally that the company violated the FMLA (and USERRA) by prolonging his AIP period due to the amount of time he was away from work on statutory leave, and because of that extension, his last absence became cause for termination under the company´s policy. His main argument was that the FMLA and DOL´s FMLA regulations require that the use of statutory leave not be applied as any type of negative factor against an employee.
Schmauch did not suggest that his employer ever denied his use of statutory leave, but rather, that it interfered with or restrained his exercise of FMLA rights by discouraging him from taking statutory leave. A policy such as Honda´s would tend to "chill" the exercise of rights guaranteed by the federal statute, he argued, and should be rejected. Schmauch´s employer contended, on the other hand, that the worker´s claim did not amount to an argument about "discrimination." Rather, it said, his claim involved "interference," and the broad prohibition of 29 C.F.R. §825.220(c) prohibiting the use of FMLA leave as a "negative factor" in employment actions should not apply.
The Court´s Decision
The court rejected the distinction that Honda sought to raise, and found that Schmauch had presented issues of material fact that could not be resolved prior to a full trial. In this regard, several aspects of the company´s policy were seen as key.
Among these, first, was the contention that extending the AIP period restrained the exercise of statutory rights by discouraging the employee from taking FMLA leave. Second, the company´s differential treatment of various types of leave or absences - for example, workers´ compensation or bereavement absences - from FMLA leave periods also discouraged the use of leave. Third, the policy´s discouragement of the use of FMLA leave by its "failure to accommodate rather than ignore particular circumstances" raised questions that could not be resolved without a jury trial. And fourth, was the question of whether the extension of the AIP period itself was sufficient to constitute a statutory violation.
All of these questions precluded summary judgment in the employer´s favor, declared the court.
At the same time, the court observed that the actual attendance occurrence that led directly to the worker´s termination was not protected leave; thus, an early judgment in Schmauch´s favor was barred. In the court´s view, a reasonable jury could conclude either that extending the worker´s AIP period did not, by itself, cause Schmauch to suffer monetary losses, or that the plaintiff suffered harm by reason of extending the AIP term (because without that action, his last absence would not have resulted in discharge). The court subsequently reached essentially the same conclusions regarding Schmauch´s claim under USERRA.
A Flawed Ruling?
To many employers, the Ohio federal court´s decision is contrary to the essential thrust of the statute and regulations regarding the protection of employees utilizing FMLA leave - in other words, that employees reinstated from protected leave must be restored in a manner unchanged from their status or circumstances at the time of departure.
As an example, if an entire department is eliminated as the result of layoff or other action during an employee´s FMLA leave, he or she does not possess greater rights to reinstatement than similarly-situated co-workers whose employment concluded while the employee on leave was away from work. Similarly, under Honda´s policy, an employee in an attendance improvement program at the time he or she takes statutory leave returns to work in precisely the same position from which they left. In the same way the probation period is not "burned off" during the leave period, neither is the "clock restarted" on the probationary term. Rather, the employee merely picks up where the individual left off before taking leave.
At this juncture, it is uncertain if an appellate court will review the district court´s ruling in the Honda case, and it is unclear whether other federal judges will find Judge Marbley´s reasoning persuasive. Employers concerned about similar interpretations being applied to their policies and actions might want to review the consistent application of their probationary periods to all periods of permitted absence, so that they are better positioned to make a stronger argument about uniform, non-discriminatory treatment than Honda could advance. Nonetheless, substantial arguments contrary to this recent holding could be advanced in other settings, and other federal judges well could respond much differently to the same basic issues that were presented in the Honda case.