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Monthly Archives: January 2013

Failing to Train Supervisors in FMLA: $1.2 Million Loss to Employer

by Martha J. Cardi, J.D. and Megan G. Holstein, J.D.

Failing to Train Supervisors in FMLA:  $1.2 Million Loss to Employer

A jury verdict in a recent FMLA case reminds employers of the perils and high costs of not training managers and supervisors regarding employee leave rights and employer obligations under the Family and Medical Leave Act (FMLA).

Patrick Hurley was employed as president by Kent Security, a security and investigation services company, from 2001 until his termination in 2008.  Around 2005 Hurley developed depression and was prescribed medications and treatment with a therapist.  In 2008 his medical condition deteriorated and he was advised to take medical leave to recover.  Hurley requested leave from his boss, who denied his request.  Despite pointing out that the leave was medically necessary and formally asking for FMLA leave, the boss terminated Hurley.

Hurley’s FMLA claims for interference with his FMLA leave rights went to a jury trial.  He won the case and was awarded the damages identified below, a total of over $750,000.  The employer’s total loss, including Hurley’s and its own attorneys’ fees and costs, exceeded $1.2 million.

DAMAGES ITEM

COMMENT

AMOUNT

Back pay Common award in termination   case – lost wages up to date of judgment

$200,000

Front pay Awarded if employee has not   yet become re-employed at time of judgment – lost wages looking forward for a   period of time

$353,901

Pre-judgment   interest – on back pay only Always awarded; rate and   whether interest is compounded varies

$8,000

[est.   2 years at 5%]

Liquidated damages Similar to punitive damages –frequently   awarded in FMLA cases

$200,000

Plaintiff’s attorney’s fees   and costs Employer pays if employee   wins

$233,109  [fees]

$21,329   [costs]

Employer’s estimated   attorney’s fees and costs Employer always pays (and is   usually larger than employee’s fees)

$250,000     [est.]

TOTAL COST TO EMPLOYER  

$1,266,339

Managers and supervisors do not need to be FMLA leave experts.  However, they need to have a basic understanding of the leave rights provided by the FMLA (and other laws such as the ADA) in order to avoid million-dollar mistakes like Hurley’s supervisor committed.  Managers should be able to identify potential FMLA situations and enlist the aid of Human Resources.

The case:  Hurley v. Kent of Naples, Inc., et al., Case No. 2:2010cv00334 (M.D. Fla. Jan. 2013).

Reed Group is available to counsel with clients and other employers about supervisor training on employees’ FMLA, ADA, and state leave rights.  We manage leaves of absence and therefore have a unique perspective on the necessary training, based on handling thousands of cases and interacting with supervisors and human resources personnel.  For more information call 866-218-4650.

FMLA Flash: US DOL Announces March 2013 Date to Issue Final Revised FMLA Regulations to Support 2009 Amendments

by Martha J. Cardi, J.D. and Megan G. Holstein, J.D.

In January 2012 the U.S. Department of Labor (DOL) introduced proposed regulations to implement and interpret the 2009 amendments to the federal Family and Medical Leave Act (FMLA).  The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons.   Recently, the DOL’s revised regulatory agenda was updated to list March 2013 as the release date for these final regulations.  No exact date in March was given.

The FMLA was amended twice in 2009, first by the National Defense Authorization Act for Fiscal Year 2010 (NDAA FY 2010, effective in October 2009), and then by the Airline Flight Crew Technical Corrections Act (AFCTCA, effective in December 2009).

The DOL implements new regulations for laws within its authority by publishing a Notice of Proposed Rulemaking (NPRM). The proposed regulations are then open for public comment and are ultimately finalized by the DOL after taking the public comments into consideration.  Click here for Reed Group’s prior article summarizing the 2009 FMLA amendments and the DOL’s 2012 NPRM.

What to expect with the March 2013 Final FMLA Regulations

The Unknowns:

The DOL has not indicated whether it will enact all of the changes contained in the NPRM or if it will make changes to the NPRM in response to public comments received.  Most commentators expect that the DOL will not make significant changes to the FMLA regulations beyond those proposed in the NPRM, but this is not guaranteed.  In addition, many are expecting changes to the DOL-approved FMLA forms, especially the military care-giver form.  No such changes were part of the NPRM other than removing the forms from the regulations, thus allowing easier changes to the forms without going through the public comment process.

As a reminder, the major provisions of the NPRM proposed regulations include:

Military Caregiver Leave:

  • The extension of military caregiver leave to eligible family members of recent veterans with a serious injury or illness incurred in the line of duty;
  • providing a new, flexible, three-part definition for serious injury or illness of a veteran;
  • expanding the type of health care providers who can provide a medical certification to include providers who are not affiliated with the military; and
  • the extension of military caregiver leave to cover serious injuries or illnesses for both current servicemembers and veterans that result from the aggravation during military service of a preexisting condition.

Qualifying Exigency Leave:

  • Including a new foreign deployment requirement for qualifying exigency leave for the deployment of all servicemembers (National Guard, Reserves, Regular Armed Forces); and
  • expanding the amount of FMLA leave an eligible employee may take to spend time with a military family member during rest and recuperation from 5 days to 15 days.

Airline Flight Crew FMLA Eligibility Rules:

  • Adding specific provisions for calculating the amount of FMLA leave used by airline flight crew employees.

Intermittent and Reduced Scheduled Leave

  • Emphasizing time increments to ensure that an employee’s FMLA leave entitlement is not reduced beyond the amount of leave actually taken; and
  • revising the physical impossibility language of 29 C.F.R. § 825.205(a)(2) to emphasize that the physical impossibility provision be applied in only the most limited circumstances.

What Employers Should Do Now

  • Comply with the NDAA FY 2010 and AFCTCA amendments – most of them went into effect in 2009 even though they did not have supporting and interpretive regulations.
  • Review the proposed rules and the DOL’s website  and FAQs regarding the proposed rules and be on your toes to implement these or similar changes come March. The DOL is likely to issue new recommended medical certification and qualifying exigency forms.
  • Contact Reed Group if you have questions about this or any other leave issue.

FMLA Leave for an Adult Child – U.S. Department of Labor Clarifies Rules

The United States Department of Labor, Wage and Hour Division, has issued Administrator’s Interpretation No. 2013-1 (“Interpretation) regarding when an employee can take time off from work under the Family and Medical Leave Act (FMLA) to care for an adult child with a serious health condition.  The Interpretation provides extremely helpful clarifications but does not make any fundamental changes to the existing rules.

The Interpretation clarifies 3 key points:

  •   An adult child’s disability can occur or manifest itself before or after the child is age 18;
  •   The expanded definition of “disability” implemented pursuant to the Americans with Disabilities Act Amendments Act (ADAAA) applies to the definition of an adult child with a  “disability” under the FMLA; and
  •   A parent who exhausts the 26 weeks of FMLA military caregiver leave may take up to 12 weeks of regular FMLA leave in subsequent years to care for a son or daughter with a serious health condition if other FMLA requirements are met.

Here are the details.

Age at Onset of Child’s Disability

The FMLA regulations define a “son or daughter” 18 years of age or older as one who is “‘incapable of self-care because of a mental or physical disability’ at the time that FMLA leave is to commence.”  The Administrator’s interpretation clarifies that the age of the child at the onset of the disability is irrelevant to the determination of whether an individual is considered a “son or daughter” under the FMLA.

Requirements for FMLA Leave for an Adult Child

The Interpretation provides a clear 4-point analysis to guide employers and parents regarding when an employee may take FMLA time to care for an adult child.

1)      The adult child must have a disability as defined by the ADAAA.  The ADAAA’s expanded definition of “disability” applies to the determination of whether a son or daughter age 18 or older has a disability for purposes of parental FMLA leave to care for that child with a serious health condition. The DOL endorses the ADAAA’s rule that the definition of disability should “be construed in favor of broad coverage” and “should not demand extensive analysis”.   As a result, many more adult children will have a “disability” that satisfies the first step of the FMLA adult child analysis.

2)      The adult child must be incapable of self-care because of the disability.  Due to the applicability of the ADAAA it is now easier for an adult child’s condition to meet the definition of a “disability.”  However, the adult child must still be incapable of self-care because of that disability.  The FMLA regulations define “incapable of self-care” to mean that “the individual requires active assistance or supervision to provide daily self-care in three or more of the ‘activities of daily living’ (ADLs) or ‘instrumental activities of daily living’ (IADLs).” 29 C.F.R. § 825.122(c)(1):

  • Activities of daily living include, without limitation, adaptive activities such as caring appropriately for one’s grooming and hygiene, bathing, dressing, eating, and taking medication.
  • Instrumental activities of daily living include, without limitation,  cooking, cleaning, shopping, taking public transportation, paying bills, maintaining a residence, using telephones and directories, using a post office, etc.” Id.

According to the Interpretation, the determination under the FMLA of whether an adult son or daughter is incapable of self-care due to a disability is a fact-specific, individualized determination that must focus on whether the individual currently needs active assistance or supervision in performing three or more ADLs or IADLs at the time of the requested leave.

3)      The adult child must have a serious health condition.  Under the FMLA, a serious health condition is an illness, injury, impairment, or physical or mental condition that involves inpatient care or continuing treatment by a health care provider. 29 C.F.R. § 825.113(a). The interpretation makes clear that a single condition may satisfy both the ADAAA’s expanded definition of “disability” and the definition of “serious health condition,” even though the statutory tests are different.

4)      The employee parent must be “needed to care” for the adult child because of the serious health condition.  The parent may be needed to care for an adult son or daughter if, for example, because of the serious health condition the adult child is “unable to care for his or her own basic medical, hygienic, or nutritional needs or safety, or is unable to transport himself or herself to the doctor.” The term “needed to care” also includes providing psychological comfort and reassurance to a son or daughter with a serious health condition who is receiving inpatient or home care. 29 C.F.R. §  825.124(a).

FMLA Leave to Care for Adult Children Wounded in Military Service

Under the FMLA military caregiver provision, an employee may take up to 26 workweeks of FMLA leave in a single 12-month period to care for a covered servicemember who sustains a serious injury or illness.  The service member’s injury or illness, however, may have an impact that lasts beyond the single 12-month period covered by the military caregiver leave entitlement. The Interpretation clarifies that even after taking the 26 weeks of caregiver leave, the servicemember’s parent may be able to take up to 12 workweeks of regular FMLA leave to care for the ill or injured son or daughter in subsequent years if the adult child’s condition continues to qualify as serious health condition, as long as all other FMLA requirements are met.

Along with the Interpretation, the DOL has posted a series of Questions and Answers and Fact Sheet #28K concerning the use of FMLA leave to care for an adult child. These materials, as well as the Interpretation, provide useful examples for employers.

What is Reed Group doing?  Reed Group’s services and software are in compliance with the DOL’s Administrative Interpretation No. 2013-1.  We are training our staff to be familiar with the DOL’s clarifications for handling FMLA requests to care for an adult child.

What should employers do? The new interpretation does not require any change in processes for handling FMLA leave requests for an adult child.  However, employers should (1) review their FMLA policies to ensure that any definitions or mention of “son or daughter” under the FMLA is in line with the Interpretation’s guidance, and (2) train HR and benefits personnel regarding the Interpretation’s clarifications.

Employers and Consultants wanting more information – Please call 866.218.4650 with any questions or for more information.  You can also visit Reed Group’s website to view all of our absence management products, tools, and services.

Risky Business: Terminating an employee 2 days after he requests FMLA leave

Has this happened to you?  You have your ducks in a row and you have documented an employee’s performance problems.  You have discussed the problems repeatedly with the employee and yet he has shown no signs of improvement.  You have no choice but to terminate the employee.  Then, before you can implement the termination, the employee suddenly requests an FMLA leave of absence.  In such a situation the employer often thinks its hands are now tied and that it has no choice but to grant the request and leave the performance problem to be addressed another day, month, or even year.  Well, not necessarily so, says the Tenth Circuit Court of Appeals!

In the recent case of Brown v. ScriptPro, LLC, the court held that an employer did not interfere with the employee’s FMLA rights when it terminated him only 2 days after the employee’s FMLA request.  The court highlighted the fact that Mr. Brown had received an annual performance review that ranked some of his performance as “needs improvement”.  He had also been criticized for his excessive internet usage and his poor interactions with colleagues and customers.  Several months later, Mr. Brown’s supervisor had continued to receive complaints from colleagues about Brown’s performance and also discussed with Brown his disappointment over an incomplete project.

Mr. Brown requested and had been granted 2 weeks of FMLA leave following the birth of his child earlier in the year.  Later in the year, Mr. Brown requested FMLA leave to accompany his wife to a doctor’s appointment, but ScriptPro denied the leave for various reasons.  Two days after that request, ScriptPro fired Mr. Brown, citing “unresolved, previously discussed performance issues” and Mr. Brown filed a claim under the FMLA.  The Tenth Circuit Court of Appeals denied Mr. Brown’s FMLA interference claim because he had failed to establish a causal link between his exercise of FMLA rights and his termination.  The court noted that the timing of a termination in relation to an FMLA request could establish an FMLA interference claim.  In this case, however, ScriptPro produced evidence of Mr. Brown’s performance issues, establishing that ScriptPro had a legitimate reason to terminate Mr. Brown regardless of his FMLA request.

Employers’ take-away

Employers should not be held hostage by the FMLA!  ScriptPro dotted its i’s and crossed its t’s by documenting Mr. Brown’s performance and producing evidence of conversations with him.  If an employer is contemplating or has decided upon disciplinary action against an employee, the employer should not halt the action solely because the employee exercises his rights under the FMLA.  The FMLA only provides the same job protection as the employee would have had if the employee had not taken an FMLA leave.  Thus, if the employee would have been disciplined or terminated, the fact that the employee requested or took an FMLA leave does not insulate the employee from the employment action.  ScriptPro underscores the importance of accurate and honest annual evaluations and timely performance conversations with your employees.

The case:  Brown v. ScriptPro, LLC, 700 F.3d 1222, (10th Cir. 2012).

The Guardian Life Insurance Company of America Acquires Reed Group

New York, N.Y., January 4, 2013 –  The Guardian Life Insurance Company of America (“Guardian”), one of the nation’s largest mutual life insurers and a leading provider of employee benefits, today announced that it has acquired Westminster, Colorado-based Reed Group, a recognized leader in absence management services that help employers comply with federal and state regulation and get employees back to work quickly and safely.

Reed Group will operate as an independent, wholly owned subsidiary of Guardian, retain its name and continue to serve all of its customers as it does today. Specifically, Reed Group helps its customers reduce the cost, compliance risk and complexity of employee absences. Its products and services address FMLA, ADA, state leaves, company leave plans, and short- and long-term disability programs.

This acquisition expands Guardian’s disability and absence management portfolio, further demonstrating the company’s commitment to innovative employee benefit solutions and meeting the needs of employers.

Commenting on the transaction, Deanna Mulligan, President and Chief Executive Officer of Guardian said, “Reed Group is well recognized and respected in the marketplace with a proven track record of ensuring workplace productivity and compliance for customers.  We look forward to helping ensure their continued success in the markets they serve and working with them to seek out new opportunities.”

David Roberts, Chief Executive Officer of Reed Group, added, “We are excited to have our long-term home as part of Guardian.  We share their commitment to providing excellent absence management services to employers and employees. All of our customers can expect a continued high level of service from Reed Group and, backed by the strength of a Fortune 500 company, we will take advantage of new opportunities.”

Reed Group will continue to operate, and invest in, its current three divisions:  Reed Group Services to help manage and administer claims and absences; LeavePro™, a software solution that helps employers manage absences; and MDGuidelines™, a web-based return-to-work toolkit.

Terms of the transaction were not disclosed.  Cain Brothers & Company, LLC served as exclusive financial advisor to Reed Group on the transaction.  DLA Piper served as legal counsel to Reed Group.

 

About Guardian

A mutual insurer founded in 1860, The Guardian Life Insurance Company of America and its subsidiaries are committed to protecting individuals, business owners and their employees with life, disability income and dental insurance products, and offer funding vehicles for 401(k) plans, annuities and other financial products. Guardian operates one of the largest dental networks in the United States, and protects more than six million employees and their families at 115,000 companies. The company has approximately 5,000 employees in the United States and a network of over 3,000 financial representatives in more than 80 agencies nationwide.

For more information about Guardian, please visit www.GuardianLife.com.

About Reed Group

Headquartered in Westminster, Colorado, Reed Group has been a trusted partner to employers, insurers, TPAs, government organizations, attorneys, and health care providers for over 30 years. Reed Group’s world-class team of clinical and absence management experts helps organizations deploy Reed Group products and services to improve employee health and productivity.

Learn more at www.reedgroup.com or www.mdguidelines.com.

Contact:

CooperKatz & Co.
Dan Bullock
Tel: 917-595-3054
dbullock@cooperkatz.com

APCO Worldwide
John Dudzinsky / Jessica McCormick
Tel: 212-300-1800
jdudzinsky@apcoworldwide.com / jmccormick@apcoworldwide.com