Companies Not Subject to the FMLA May Still Violate the FMLA

By Susan G. Fentin - Skoler, Abbott & Presser, P.C.

April 20, 2018

If you’re an employer covered by the Family and Medical Leave Act, you probably recognize that it is one of the most complicated statutes for employers to follow.  If you’re not FMLA covered, you may believe that since the FMLA does not apply to your organization, you cannot have liability for an FMLA violation. That belief may be incorrect according to the United States District Court for the District of Massachusetts, which has issued a decision in an FMLA retaliation case that impacts even those employers who are not covered by the FMLA as well as employees ineligible for FMLA leave.

Policy Problems

The FMLA applies to employers who have 50 or more employees within a 75 mile radius.  Some employers that don’t meet that test generously want to offer “FMLA” leave to their employees and therefore intentionally include FMLA policies in their handbooks.  Other employers don’t recognize that they are not FMLA covered and/or use “form” handbooks that contain an FMLA policy.  Employers with multiple locations who are FMLA covered at some locations but not at others may simply have one handbook for all employees, and that handbook may have an FMLA policy that doesn’t make it clear that it only applies to those who work at a site with 50 or more employees within a 75-mile radius.  Still other employers may, in error, simply tell an employee that his or her leave of absence is job-protected under the FMLA, even though that’s not the case.  In any of these scenarios, even if the employer is not covered by the FMLA or a particular employee does not qualify for FMLA leave, an employee may reasonably conclude that they may take protected FMLA leave for an FMLA-covered reason. A word to the wise – if you are not FMLA covered and do not want to be bound by the FMLA, don’t suggest otherwise to your employees.

Employee Sues for FMLA Retaliation Even Though Employer Not FMLA-Covered

In Reid v. Centric Consulting, LLC, a Massachusetts federal court reminded employers who actually offer FMLA leave to their workers can be sued for violations of the FMLA even if they are not a covered entity under the statute. The problem arose for Centric when its employee, Joseph Reid, took a 17-week leave of absence after he was put on a performance improvement plan.  Although Centric was not a covered entity under the FMLA, it incorrectly labeled 12 weeks of Reid’s leave as FMLA leave.  After Reid returned to work, he was terminated for what the employer said were performance-related reasons.  He then filed suit against Centric, claiming that his termination was actually in retaliation for having taken FMLA leave.

“Equitable Estoppel” May Prevent Employer from Escaping FMLA Liability 

Centric tried to have the case dismissed on the grounds that it could not be held liable for retaliation under the FMLA because it had too few employees in Reid’s geographic area to be covered by the FMLA.  According to Centric, since it wasn’t covered, Reid’s leave wasn’t actually FMLA leave, regardless of what it had called the leave at the time.  The court, however, was not persuaded by that argument.  Rather, it stated that the principle of “equitable estoppel” might be applicable to Centric’s defense:  If Centric had treated Reid as if he were eligible for FMLA leave, it could not turn around and defend his FMLA claim on the grounds that he wasn’t entitled to the protections of the statute—it was prevented (or “estopped”) from doing so.

To be successful on an equitable estoppel argument, Reid would need to demonstrate that Centric made a definite misrepresentation of his eligibility for FMLA leave, that he relied upon that misrepresentation to his detriment, and that his reliance on Centric’s misrepresentation was reasonable because he didn’t know that Centric was misleading him.  For reasons the court didn’t mention, neither party addressed the applicability of the equitable estoppel doctrine to the case.   The court held a status conference to discuss next steps and the applicability of the doctrine of equitable estoppel to Reid’s retaliation claim.  

Our Advice

Check your handbook and form letters sent to those who are on an approved leave.  If you employ fewer than 50 employees within a 75 mile radius and you have an FMLA policy in your handbook or reference an FMLA leave somewhere else, get rid of it.  Of course, there’s no problem granting an employee a leave of absence for reasons similar to FMLA-qualifying reasons (and in some cases, you may be required to under the Americans with Disabilities Act or similar laws), but it should be clear that the leave is not FMLA leave.   If you have concerns about the FMLA, or would just like to get a better handle on it, consider attending my FMLA Master Class on May 22, 2018 in Cambridge, MA. It’s a day long, intensive, interactive workshop that covers all the details of this complicated statute.