Court Report

Termination During FMLA Leave Ruled Retaliation
Also: Employee liable for trafficking employer domain name; unfounded fear of HIV not compensable

Dec 1, 2003

December 2003, HR Magazine

Termination During FMLA Leave Ruled Retaliation

[Arban v. West Publ. Corp., 6th Cir., Nos. 01-2278/01-2370, Sept. 24, 2003.]

Despite considerable evidence indicating that an employer had decided to terminate an employee for misconduct before the individual went on medical leave, the 6th U.S. Circuit Court of Appeals recently upheld a substantial jury verdict, including liquidated damages, in favor of the employee for violations of the Family and Medical Leave Act (FMLA).

Daniel Arban, a regional field sales manager for West Publishing Corp., had a documented history of gastrointestinal problems, including chronic esophagitis and irritable bowel syndrome. In January 1998, Arban voluntarily left his job as sales manager for the position of field sales representative to spend more time with his children.

Beginning in February 1998, Arban’s supervisors uncovered ongoing performance problems in his new position, including misrepresentation of account information and violations of the company’s policies regarding documentation of sales and accounts. In April, Arban’s immediate supervisor issued to him a warning letter that stated that any future such occurrence would subject Arban to disciplinary action, including termination.

On Dec. 16, 1998, Arban’s supervisors met with him to discuss additional policy violations and ongoing customer complaints regarding his performance. According to a follow-up e-mail from Arban’s direct supervisor to the sales director, the evidence reviewed at the meeting indicated Arban’s “gross negligence, fraud, deceit and lack of moral character,” which constituted grounds for termination. However, the message did not state that Arban was to be fired. Instead, it requested “alternatives” that should be considered prior to the recommended termination.

On Dec. 21, Arban’s supervisor accompanied him on sales calls and, according to Arban, told him that his performance that day “met expectations.” The supervisor testified, however, that the field ride did not constitute a performance evaluation and that he had not told Arban that he was in “good standing.” The supervisor’s handwritten notes regarding his conversations with Arban that day were illegible and, therefore, did not support the supervisor’s testimony.

At trial, the company witnesses all testified that they had agreed, in discussions, to terminate Arban’s employment in mid-December, but had decided to wait until “after the holidays.” However, there was no documentation supporting that testimony.

On Dec. 24, before any company action regarding his termination, Arban informed a company human resource representative that he needed to go on medical leave because of an attack of esophagitis.

During the following weeks, Arban’s supervisor contacted him at home several times, asking him to provide certain customer and sales information. Arban refused, stating that he would lose his short-term disability benefits if he engaged in any “work.”

Ultimately, Arban was given the choice of resigning from his position or being terminated. He resigned but later filed a lawsuit alleging that he had been terminated because of his FMLA leave, and that the company’s failure to reinstate him at the end of his leave was retaliation. The jury found in Arban’s favor, and the verdict was upheld on appeal.

While employers generally have the discretion to fire an at-will employee for misconduct or poor performance, the timing of the discharge and the employer’s lack of documentation in three specific instances cast doubt on the employer’s motive for the termination.

First, Arban’s poor performance and misconduct apparently came to light in January 1998, but was not documented until the April warning letter.

Second, although the decision to fire Arban supposedly was made in mid-December, the only available documentation indicated some reluctance on the part of Arban’s supervisor to discharge him.

Finally, because the notes of the Dec. 21 meeting with his supervisor were not legible, the company was unable to use them to rebut Arban’s assertion that he was told that he was “in good standing” with the company.

By Maria Greco Danaher, an attorney with the law firm of Dickie, McCamey & Chilcote in Pittsburgh.

Employee Liable for Trafficking In Employer Domain Name

[Ford Motor Company v. Catalanotte, 6th Cir., No. 02-1237, Aug. 28, 2003.]

An employer was entitled to injunctive relief and damages against an employee that registered and attempted to profit from the sale of a domain name similar to a company trademark, according to the 6th U.S. Circuit Court of Appeals.

The federal Anti-Cybersquatting Consumer Protection Act (ACPA), 15 U.S.C. 1125(d), creates a civil remedy against any person who registers, traffics in or uses a domain name that is confusingly similar to another party’s trademark with a “bad faith intent to profit.” The statute lists a variety of factors for courts to consider in measuring bad faith, including the similarity of the marks and any legitimate interest that the defendant may have in registering or using the mark. The statute provides for injunctive relief and for statutory damages between $1,000 and $100,000 per violation.

Peter Catalanotte, a Ford Motor Co. employee since 1978, registered, a domain name that corresponded to the name of Ford’s employee newspaper, Ford World. Catalanotte registered the domain name in January 1997, before the enactment of ACPA.

In October 2000, Catalanotte sent an e-mail to Ford executives (who until then had no knowledge of Catalanotte’s ownership of the domain) noting that he had received offers from various sources but that he was “extending the opportunity” to Ford “before any decisions are to be made.”

Even though Catalanotte had registered the domain name before the ACPA’s enactment, the federal trial court determined that his post-enactment e-mail constituted trafficking in the domain name. The 6th Circuit affirmed the trial court’s entry of injunctive relief against Catalanotte and a statutory damages award in the amount of $5,000.

By John L. Hines Jr., an attorney with the law firm of Sachnoff & Weaver Ltd. in Chicago.

Unfounded Fear of HIV Exposure Not Compensable

[Guess v. Sharp Manufacturing Co. of America, Tennessee Supreme Court, No. W2002-00818-WC-R3-CV, Aug. 27, 2003]

An employee seeking workers’ compensation benefits due to mental injury allegedly arising from potential exposure to HIV must demonstrate actual exposure to the virus through a medically recognized means of transmission to recover benefits, the Tennessee Supreme Court recently ruled.

Mary Guess was employed at Sharp Manufacturing Company of America as an assembly-line worker. In November 1998, one of her co-workers lacerated his hand, resulting in some of his blood getting on Guess’s hand. Although Guess suffered no penetrating injury, she testified that she had open cuts on her hand as well as a fresh manicure.

Guess testified that she immediately became “hysterical” and “out of control.” She believed that her co-worker’s blood was HIV-positive based on purely subjective reasons, including the fact that the co-worker was sick a lot, had friends who had died of AIDS and “looked and acted gay.”

Although Guess was tested five times for HIV, with all results negative, she claimed ongoing mental problems as a result of the incident. She was diagnosed with post-traumatic stress disorder. Guess filed a claim for workers’ compensation benefits for her alleged mental injury. The trial court awarded Guess benefits. On appeal, however, the Tennessee Supreme Court reversed.

The Supreme Court found that permitting recovery of workers’ compensation benefits where there was only an unfounded fear of exposure to HIV, as opposed to actual exposure, would only contribute to public fears and misperceptions about the transmission of AIDS.

By Timothy S. Bland, an attorney in the Memphis office of Ford & Harrison LLP.

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