Employment Law: The Supreme Court Reins in the FMLA (Slightly)

Recently, the Supreme Court heard its first case involving the Family and Medical Leave Act (FMLA). At first blush, the high court’s decision in this case (Ragsdale v. Wolverine World Wide, Inc., 00-6029), appears to be a victory for employers. But HR professionals should be careful not to make too much of this decision.

While it’s true that the Supreme Court ultimately ruled in favor of the employer in this case, it’s also true that this decision is fairly narrow in scope. As a result, employers may unwittingly believe that the high court has given them more latitude than they truly possess.

The Facts of the Case

In the Ragsdale case, Tracy Ragsdale, who suffers from Hodgkin’s disease, took a leave of absence from her employer, Wolverine World Wide Inc. Per company policy, Ragsdale received seven months of sick leave for her condition—far more than the 12 weeks of unpaid leave the FMLA mandates.

However, Wolverine never formally notified Ragsdale that her leave qualified as FMLA leave.

Here’s the problem: Under Department of Labor (DOL) regulation 29 C.F.R. § 825.700(a), an employee’s leave does not count against the FMLA 12-week minimum unless the employer notifies the employee that the absence is in fact FMLA leave. (So, if an employer grants 10 weeks of leave but doesn’t tell the employee that it counts against the FMLA’s 12-week minimum, the employee would be automatically entitled to those 10 weeks of leave, plus an additional 12 weeks of FMLA leave, according to the regulations.)

At the end of her seven months of leave, Ragsdale asked to work part time or to take additional time off. Wolverine denied both requests. When Ragsdale did not return to work at the end of her leave, she was fired.

Ragsdale sued Wolverine, claiming that because the company never designated her time off as FMLA leave, she was entitled to another 12 weeks of time off and to return to her job. Both the U.S. District Court in Arkansas and the 8th Circuit Court of Appeals ruled in favor of Wolverine. Ragsdale appealed to the U.S. Supreme Court.

The Ruling

In a very narrow ruling, the Supreme Court held that the DOL regulation’s penalty provision—the part that automatically grants employees additional leave if employers fail to designate time off as FMLA leave—was invalid.

While the court’s ruling is important, it is just as important to look at what the court did not address.

First, the court did not invalidate the portion of the regulation that requires employers to notify employees that their leave will be counted against their FMLA-entitlement minimum. The court held only that the regulation’s automatic penalty was invalid. The high court deferred the decision of whether notice is required.

Second, the court didn’t state that employers never will be penalized for failing to notify employees that time off will count as FMLA leave. In fact, the court specifically noted that the FMLA provides numerous remedies—such as monetary damages and reinstatement—for employees who have been harmed by an employer’s action. Thus, if employees can prove they were harmed by not knowing that their leave counted against the FMLA minimum, a court could assess an appropriate penalty against the employer.

Here’s an example: Say an employee can show that she would not have taken 12 weeks of leave had she known it would count against her FMLA limit, and that instead she would have opted to work part-time during those 12 weeks. In this situation, a court might require the employer to give the employee additional FMLA leave equal to the amount the employee would have saved by working part-time.

What Has Changed?

The Ragsdale decision involved only one FMLA regulation, and it does not invalidate other regulations. However, it does call into question the validity of FMLA regulations that impose an automatic penalty.

For example, another DOL regulation (29 C.F.R. § 825.110(d)) states that once an employer tells a worker he is eligible for FMLA leave, that worker’s eligibility cannot be challenged later—even if the employer was mistaken and the employee truly is ineligible.

In light of the Ragsdale decision, it is unlikely that this regulation’s automatic penalty will pass muster with the courts.

In addition, the ruling is encouraging because it shows that the Supreme Court can, and will, strike down FMLA regulations when the court believes the DOL has exceeded its statutory authority. As a result, employers who unintentionally violate a regulation may have a better shot at successfully arguing in court that the regulation is invalid.

Indeed, it seems highly likely that there will be an increase in the number of cases that challenge the validity of individual FMLA regulations.

What Has Stayed the Same?

While it’s true that some FMLA regulations may be invalidated in the future, until that day comes, employers will need to continue to comply with these rules.

For example, since the Ragsdale decision did not invalidate the DOL regulation’s notice requirements, employers still should make every attempt to comply with them as closely as possible.

Specifically, employers should:

• Provide individual written notice to employees stating that time off work will count against their FMLA leave entitlement.

• Display the FMLA rights poster in the workplace.

• Have a written FMLA policy that notifies employees of their rights and obligations under the law. This applies only to employers that have a written employee handbook or other written employment policies.

Employers that do not have an employee handbook or policy must, at a minimum, notify employees who request FMLA leave of their legal rights. The DOL offers a model notice of rights that can be used for this purpose. But employers that do not have a written FMLA policy will be better served by implementing one.

• Train supervisors. FMLA regulations state that employees need not mention the law for a leave request to count as FMLA leave. Rather, employees need only give notice in a manner sufficient to make the employer aware that FMLA leave is needed.

This means employers should make sure supervisors—who often are the first to receive leave requests—are adequately trained to recognize an FMLA leave request.

For medical conditions, the regulations note that employers may need to ask employees additional questions to determine if the employee’s medical condition qualifies for FMLA leave. As a result, supervisors must be trained on the types of conditions that qualify for FMLA leave so they will recognize when FMLA leave has been requested. Supervisors also should be advised to contact HR immediately if a questionable situation arises.

If supervisors are unable to perform these duties on the front end, employers will be unable to fulfill their notice obligations under the FMLA regulations and may run afoul of the law on the back end.

Timothy S. Bland is a partner in the Memphis, Tenn., office of Ford & Harrison LLP, a national firm exclusively representing management in labor and employment matters. He is a member of SHRM’s national Workplace Diversity Committee.