From Family and Medical
Leave Handbook, ©Thompson Publishing Group, Inc.
Ever since the U.S.
Department of Labor (DOL) promulgated regulations to interpret the requirements
of the Family and Medical Leave Act of 1993 (FMLA), employers have protested
the administrative burden some of those regulations impose. This is especially
true with respect to the requirement that employers must designate family or
medical leave as FMLA leave before the absence counts toward the statutory
entitlement of 12 weeks´ leave in a 12-month period.
Some employers´ criticism
has found its way to the federal court system, as employers accused of
violating the leave law - at least as interpreted and applied by the agency -
have argued that the DOL overstepped its authority with some of its rules. Two
federal circuit courts of appeals have agreed with employers in disputes about
their failure to give notice of FMLA leave to employees. A third federal
appeals court has disagreed with the first two, creating a "split between the
circuits" and setting the stage for resolution of the question by the ultimate
arbiter of such matters, the U.S. Supreme Court.
On June 25, the Court said
that it will review the case of Ragsdale
v. Wolverine Worldwide Inc., a decision that went against the DOL. In the
ruling, the 8th U.S. Circuit Court of Appeals held the employer-notice
requirement to be invalid.
Ragsdale
represents the first time the Supreme Court will consider a challenge to a
portion of the FMLA regulations. The Court´s decision may have an important
impact on the substantive and administrative responsibilities of employers
under the FMLA. If the decision favors a relaxation of the DOL regulation on
employer notice, it could fuel future challenges to other aspects of the
agency´s rules.
Background of the Ragsdale Case
Eleven months after
commencing employment with Wolverine, Tracy Ragsdale was diagnosed with cancer.
She requested leave from the company, which was granted pursuant to its generous
leave policy.
At Wolverine, employees who
had been with the company for at least six months were entitled to take leave
for up to seven months, if they requested extensions of the leave period every
30 days. Ragsdale sought and received extensions running through the end of the
policy period; the company did not advise her that this period of absence would
count against her FMLA entitlement of 12 weeks of leave.
At the conclusion of the
seven-month period, Ragsdale asked to use her leave under the FMLA. The company
denied her request, telling her that she had exhausted her 12-week entitlement,
even though she never had been formally notified that her absence under
Wolverine´s policy also would count toward FMLA leave rights.
After her termination, Ragsdale
challenged the company´s action under the Americans with Disabilities Act and
the Arkansas Civil Rights Act as well as the FMLA. The portion of the case that
will be reviewed by the highest court in the land, however, was the trial
court´s grant of summary judgment to the employer on her FMLA claim.
Lower Courts´ Rulings
In both the trial court and
the 8th Circuit Court, the principal FMLA issue was the propriety of the DOL´s
rules, and particularly the requirement that employers communicate to employees
that absences will count toward statutory periods of leave eligibility.
Section 825.208 of the
agency´s regulations states that in all circumstances, it is the employer´s
responsibility to designate leave as counting as FMLA absences. Section (c) of
that regulation - dealing with paid leave under an employer´s policy - states
that if the employer has enough information to decide that the paid leave is
for an FMLA-approved reason when the employee either gives notice of the need
for leave, or begins taking leave - and the employer fails to designate the
leave as FMLA leave and notify the employee of the designation - then the leave
does not count against the employee´s 12-week entitlement.
In such a scenario, the
rules state that the employer has lost the right to designate the leave
retroactively, and may designate it prospectively only from the time the
employee was notified. The employee is subject to the act´s protections
regardless of the employer designation, but the leave may not be counted against
his or her 12-week entitlement.
The agency´s regulations
apply the same principle to unpaid leave provided by employers, stating that:
"[I]f an employee takes paid or unpaid leave and the employer does not
designate the leave as FMLA leave, the leave taken does not count against an
employee´s FMLA entitlement." 29 C.F.R. §825.700(a).
The lower courts reviewing Ragsdale both concluded that in
promulgating the notice requirement, the Department of Labor exceeded its
authority under the statute. The employer notice obligation was not contained
in the statutory language, nor does it appear in the law´s legislative history.
The 8th Circuit Court noted
that in other sections of the FMLA, where Congress sought to impose explicit
notice requirements, it knew how to do so. For example, the statute itself
contains the requirement that employees provide certain notice to employers
when they request qualifying leave under the federal law.
Similarly, the FMLA permits
employers to refuse to restore certain "key employees" following leave, but the
statute permits that treatment only if the employer gives notice to the
employee when it determines that reinstatement would cause substantial and
grievous economic injury to the employer´s operations. The fact that Congress knew
how and when to impose notice requirements lends credence to the view that the
§825.208 employer-notice requirement goes beyond the intent of Congress in
enacting the FMLA.
The basic view of the 8th
U.S. Circuit Court of Appeals in Ragsdale
was that the DOL´s notice requirement could impose additional requirements on
employers (that is, additional leave beyond the 12 weeks guaranteed in the
statute) that Congress did not envision or require. In this regard, the appeals
court expressed agreement with the earlier decision of another federal
appellate court, the 11th U.S. Circuit Court of Appeals, which - in its 1999
decision in McGregor v. Autozone, Inc. 180
F.3d 1305 - also held that the same
regulation was invalid. The 11th Circuit in McGregor
had stated that:
The regulations not only add
requirements and grant entitlements beyond those of the statute but they also
are inconsistent with the stated purpose of the statute. One of the explicit
purposes of the act is to "balance the demands of the workplace with the needs
of families ... in a manner that accommodates the legitimate interests of
employers.".... Where an employer such as [Autozone] exceeds the baseline 12
weeks by providing not only more leave than FMLA but also paid leave, the
employer should not find itself sued for violating FMLA.
In this regard, the 11th
Circuit in McGregor pointed directly
to a source of great concern for many employers regarding the complications
posed by notice-deficiencies under the FMLA. Both the Ragsdale and McGregor courts
found that the regulations are impermissible interpretations of the statute,
and struck them down.
Contrary View
By contrast, the 6th U.S.
Circuit Court of Appeals in Cincinnati endorsed the DOL rule in a decision
issued in 2000, Plant v. Morton Int´l, Inc.
212 F.3d 929. (See App. III of the Handbook,
Case No. 219.) That court confronted a fact pattern similar to that in Ragsdale: under the DOL regulations, an
employee would have been eligible for additional statutory leave because the
employer failed to provide notice that an earlier absence counted toward the
FMLA 12-week entitlement. The 6th Circuit Court concluded that the notice
regulation "evinces a reasonable understanding of the FMLA, reflecting
Congress´ concern with providing ample notice to employees of their rights
under the statute."
The DOL, acting through its
office of the Solicitor General, asked the U.S. Supreme Court to resolve this
dispute by reviewing the Ragsdale
case. During the Court´s next term, which commences in October 2001, it will
receive briefs and hold an oral argument on the question of whether the Labor
Department acted permissibly when it wrote the rule stating that
employer-provided leave does not count against the FMLA entitlement until the
employer designates the leave and tells the employee it has done so.
The Court´s decision in the
case, expected sometime before July 2002, will at last resolve this
longstanding debate. It may either give relief to employers on one critical
aspect of FMLA leave administration or underscore its importance. Depending on
the scope of the ruling on this point, other provisions of the FMLA regulations
also may come under closer judicial scrutiny and attack. (Ragsdale v. Wolverine Worldwide Inc., 218 F.3d 933 (8th Cir. 2000),
cert. granted (U.S. June 25, 2001)
(No. 00-6029))