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An employer acted appropriately when it returned its employee to an equivalent position following leave under the Family and Medical Leave Act (FMLA) and later laid off the employee as part of an unrelated reduction-in-force, according to the 4th U.S. Circuit Court of Appeals.
Potomac Fusion Inc. employed Gary Waag as a senior director of operations, reporting directly to Dan Haug. In December 2011, Sotera Defense Solutions Inc. acquired Potomac and installed Haug as vice president of Data Fusion Analytics (DFA) while maintaining Waag as a director of operations in the DFA division.
In September 2012, the U.S. Army selected Sotera as a prime contractor for its NexGen warfighting software program. Sotera made Waag the program manager (PM) for the NexGen project in October 2012.
On Oct. 17, 2012, Waag severely injured his hand when he fell off the roof of his home. Waag informed Haug of the injury and advised that he would be unable to work for several months. Shortly thereafter, Sotera placed another employee in the role of PM for the NexGen project. Subsequently, federal budget sequestration went into effect delaying the NexGen work and making the PM position a part-time role.
When Waag returned to work in late December 2012, he was moved to a new role in the Electronic Warfare Program (EWP). The job was equivalent to the PM position he had prior to FMLA leave, provided immediate full-time work, took advantage of his specific skill set and provided the identical salary and benefits as the prior role.
In early 2013, Sotera encountered a drastic decrease in work due to sequestration, and it missed its revenue goal by $110 million. In February 2013, Haug was required to cut overhead by laying off employees. For various financial reasons, those in the EWP division, including Waag, were the first to be let go in February 2013. Layoffs continued throughout 2013 and 2014, and ultimately Sotera eliminated the DFA division. Layoffs did not affect the PM role that Waag had held before his medical leave.
[SHRM members-only toolkit: Coordinating Leaves of Absence]
Waag brought suit alleging that Sotera violated his FMLA rights by not returning him to the same or equivalent position after medical leave and by later terminating his employment. The district court granted Sotera's motion for summary judgment, and the 4th Circuit affirmed. In doing so, the 4th Circuit explained that under the FMLA an employee returning to work does not have an absolute right to return to the same position held prior to leave. Rather, an employer has the option to return an employee to the same position or to an equivalent position with equivalent benefits, pay, and other terms and conditions. The FMLA does not encourage one option over the other , and an employer is not obligated to keep an employee's original position open while he or she is on leave.
In turn, the court found that the EWP position that Waag returned to after leave was equivalent to his former position as PM. Indeed, the role had the same salary, bonus eligibility, employment benefits, worksite and job title. Further, the new role had similar responsibilities, and any perceived differences were negligible.
The 4th Circuit then turned to and rejected Waag's argument that his termination unlawfully interfered with his FMLA rights and/or was in retaliation for exercising those rights. Specifically, the court explained that the new position was legitimate and not already slated for layoffs when offered to Waag and that the subsequent termination resulted from nondiscriminatory economic factors.
Waag v. Sotera Def. Sols. Inc., 4th Cir., No. 15-2521 (May 16, 2017).
Professional Pointer: While an employer need not hold a job open or place an employee in the exact same position as occupied prior to FMLA leave, employers opting to return an employee to an equivalent position should perform a careful comparison of the jobs to ensure sufficient similarity. In particular, the employer should analyze whether the new role is equivalent to the old role with respect to pay, benefits, working conditions, privileges, status and responsibilities and consider whether the new role involves an equivalent amount of skill, effort, responsibility and authority.
Michael R. Link is an attorney with Seaton, Peters & Revnew P.A., the Worklaw® Network member firm in Minneapolis.
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