State and federal leave laws

More than half of the states have adopted their own leave requirements. You must comply with each state's requirements if you have employees in that state.

Some state laws mirror the federal FMLA to a degree, but others have different provisions. For example, under the federal FMLA, employers can require that paid leave be substituted, but some state leave laws specify that employees must have this choice. Whenever federal and state leave laws run concurrently during an employee's leave, you must evaluate them separately and comply with each.

Variations in state and federal laws can affect:

• whether you can restrict the use of intermittent or reduced leave schedules;
• whether you must maintain health benefits;
• what job the employee must be reinstated to at the end of leave;
• the amount of leave the employee is entitled to; and
• medical certification requirements.

Employers' most common challenges

Since Unum offers a consistent, integrated and systematic FMLA and state leave management service, we often have discussions with employers about the challenges of leave administration. Based on those discussions, and our observations while implementing our leave management service for employers around the country, we've learned that it is important for employers to keep an eye out for these common FMLA administration errors:

• failing to identify and promptly designate FMLA absences;
• incorrectly administering state leave laws in conjunction with the FMLA;
• failing to understand that the FMLA may apply even if employees don't request it;
• not tracking FMLA completely because more generous leave benefits are provided;
• not properly determining eligibility;
• failing to grant leave to provide physical or psychological comfort to a family member;
• not granting FMLA leave by misunderstanding what a "serious health condition" is;
• granting FMLA leave for a serious health condition without first evaluating if the employee or family member is incapacitated by it;
• not keeping complete, detailed and accurate records of when FMLA time is used so that, as a result, you are unable to legally discipline or terminate an employee; or
• overlooking your right to transfer an employee on intermittent FMLA leave for planned medical treatment to a position of less responsibility.

The cost of non-compliance

Failing to comply with the FMLA can be costly for employers. Sometimes managers are held personally responsible for violations, and companies can face expensive legal and settlement fees. The following court cases are actual examples of FMLA litigation.

Intermittent leave sparks battle

In Schultz v. Advocate Health and Hospitals Corp.,² a long-time employee alleged his former employer terminated him in retaliation for using FMLA leave to care for his two ill parents.

The employee took intermittent leave over several months. During this period, his supervisors established performance standards he was unable to meet. The problem escalated until the employee was terminated.

A federal jury awarded $11.65 million to the employee. The award consisted of $10.75 million against the employer and $900,000 individually against the two supervisors.

Employee claims demotion instead of equivalent position

In Allen v. A.G. Edwards & Sons, Inc.,³ plaintiff Donald Allen brought suit against his employer for violations of the ADA and FMLA as well as state laws on constructive discharge.

In 2001, he was diagnosed with bipolar disorder and briefly hospitalized. When he returned to work, A.G. Edwards refused to reinstate him to his old job. The company had options under FMLA and ADA but was concerned about Allen's ability to perform his job. Allen claimed he was demoted to financial consultant, requiring him to report to the former assistant branch manager. The employer argued that there was no FMLA violation because they had returned him to a manager position.

The arbitration panel ultimately found for the plaintiff and found that the employer violated the FMLA by failing to reinstate Allen to his same or equivalent job as defined by the FMLA regulations. Allen was awarded $1.25 million.

Termination for adoption-related absence nets more than $1 million in damages

In Dotson v. Pfizer,⁴ plaintiff Dotson was seeking to adopt a child from Russia and took intermittent time off to attend to the adoption, taking two trips to Russia. The employee kept his employer informed and spoke to his HR Dept. After returning from Russia with the child, the employee was terminated based on an alleged violation of company policy. Dotson sued for FMLA retaliation. The employer argued that the employee was not entitled to FMLA protection because he failed to indicate that he needed FMLA leave. The court rejected this argument, noting that an employee does not have to expressly state that he needs FMLA or use any magic words to trigger the employer's obligation.

A jury found for the employee and awarded him more than $1 million plus prejudgment interest. The employer appealed but the court affirmed the decision in the employee's favor. The court also held that the lower court erred when it failed to award the employee prejudgment interest, making the judgment even larger than that awarded by the jury.

Preventing an employee from taking FMLA leave leads to a significant settlement

In Lore v. Chase Manhattan Mortgage Corp.,⁵ plaintiff Nicholas Lore requested leave to address several health issues. He was told an additional manager would be hired to assist with his responsibilities and enable him to take leave. When the additional manager was not hired, Lore inquired of his manager again requesting leave. Less than one month later, Lore was terminated. Lore sued Chase Manhattan for failing to grant him, an eligible employee, leave under the FMLA. In addition, Lore argued Chase Manhattan unlawfully retaliated against him for his attempts to exercise his rights under the FMLA.

A jury found for the employee and awarded him $2,227,241. With liquidated damages equal to the amount of the verdict and prejudgment interest added in, the recovery equaled between $6.2 and $7.6 million.

2. Schultz v. Advocate Health and Hospitals Corp., N.D. Ill., No. 01 CV 702 (October 30, 2002)
3. Allen v. A.G. Edwards & Sons Inc., NASD #04-06092 (June 26, 2006)
4. Dotson v. Pfizer, 4th Cir. No. 07-1920 (March 4, 2009)
5. Lore v. Chase Manhattan Mortgage Co., N.D. Ga., 1-04-cv-0204-LTW (2008)