When Does an Employer "Interfere" With an Employee's FMLA Rights?

A recent federal decision in Washington, D.C. has highlighted the need for employers to ensure that they provide their employees with accurate information concerning their rights under the Family and Medical Leave Act (FMLA) (http://www.dol.gov/dol/topic/benefits-leave/fmla.htm) if they are to avoid a claim of "interference" with those rights. (McFadden v. Ballard Spahr Andrews & Ingersoll, No. 08-7140, D.C. Cir., June 29, 2010).

According to the Court, an FMLA interference claim has only two requirements: (1) that the employer somehow interfered, restrained, or denied the exercise of FMLA rights, and (2) that the interference directly resulted in monetary loss to the employee. An employer who mischaracterizes or provides misinformation regarding employees' FMLA entitlements may violate the FMLA if that mischaracterization or misinformation affects when or how an employee takes leave in any way. Therefore, an employer may be liable even in those situations in which FMLA leave was never actually denied.

The facts of the case are instructive. The employee had worked as a full-time legal secretary at the employer's Washington, D.C. office for more than 10 years when her husband was diagnosed with terminal cancer. She requested time off to care for him as he underwent surgery and then chemotherapy treatments. Although her employer granted a combination of paid leave and unpaid FMLA leave followed by a reduced work schedule, and although her employer never denied any requests for leave, according to the employee, the firm expressed concern that her inability to work on certain days was "going to be a problem." As a result, the employee felt compelled to pay her sister to care for her husband part-time.

After the employee was terminated for unrelated reasons, she filed suit, claiming, among other things, that by providing misinformation as to her entitlements and pressuring her not to take leave, the firm violated the FMLA. The trial court decided the case in the employer's favor without the need for a jury trial. The employee then appealed.

According to the appellate court, the trial court erred when it made an employer's denial of leave a required element of an FMLA claim. Instead, the employee's claim could succeed "without showing [the employer] denied her any leave she requested; she need only show the employer 'interfere[d] with...the exercise of' her FMLA rights." Thus, statements by the firm discouraging the use of leave, combined with evidence that the employee hired her sister as a caretaker, created an arguable issue for a jury "as to whether [the employee] was prejudiced."

This case emphasizes the need for employers to provide employees with accurate information as to their FMLA rights and to avoid making statements or taking positions that could be interpreted by employees as discouraging the taking of such leaves.

For additional information on employer obligations under the FMLA, check out the Department of Labor's online Compliance Guide (http://www.dol.gov/whd/regs/compliance/1421.htm).

Health Care Reform Update — Benefits of Grandfather Status Likely to Be Short-Lived

The government agencies responsible for implementing the health care reform bill recently released regulations suggesting that grandfathering will be treated as a transitional — rather than a permanent — facet of the health care law. Grandfathered plans, which are plans that existed when the reform bill was enacted on March 23, 2010, will be able to make "routine" changes while remaining exempt from some of the provisions in the new health care reform law. (See New Regulations, http://edocket.access.gpo.gov/2010/pdf/2010-14488.pdf.) Unfortunately, the benefits of grandfather status will likely be short-lived for most health plans; although there is no sunset provision in the health care reform bill, government agencies estimate that 66 percent of small employer plans, and 45 percent of large employer plans, are expected to lose grandfather status by the end of 2013. (See Estimates for 2011-2013, http://edocket.access.gpo.gov/2010/pdf/2010-14488.pdf.)

In the meantime, routine changes that do not change the status of grandfathered plans include adding benefits, modestly adjusting existing benefits, making changes to comply with state and federal law, and voluntarily adopting new consumer protections.

On the other hand, plans that make significant changes resulting in a reduction of benefits or an increase in costs to consumers will forfeit their grandfathered status. Changes that threaten the loss of grandfather status include the following:

  • Change in insurance policy or insurance carrier
  • Elimination of all or substantially all benefits to diagnose or treat a particular condition (including the elimination of benefits for any necessary element to diagnose or treat a condition)
  • Any increase in coinsurance (and other percentage cost-sharing requirements)
  • Any increase in fixed-amount cost-sharing requirements other than co-payments, if the increase is greater than medical inflation plus 15 percentage points
  • Any increase in fixed-amount co-payments if the increase exceeds the greater of (a) medical inflation (from March 23, 2010) plus 15 percentage points or (b) five dollars increased by medical inflation
  • Any decrease by the employer or employee organization in its contributions for coverage, if the aggregate decrease is more than five percentage points below the contribution rate on March 23, 2010
  • The imposition of a new or modified annual limit on coverage

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