Employer Makes $1.3 Million FMLA Mistake by Firing Worker After Mexico Trip

A recent decision from the highest court in Massachusetts emphasizes the risk to employers of taking employment actions based on outrage rather than reason—particularly when it comes to decisions about leaves of absence.

In this case, an employee sued his former employer after he was fired for taking a vacation to Mexico while he was on a medical leave of absence, and the Massachusetts Supreme Judicial Court upheld a $1.3 million damage award. A jury had found the company liable for retaliatory termination in violation of the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), and a state law discrimination statute.

The jury awarded the employee $19,777 in back pay and $300,000 in front pay for lost future income and benefits. In addition, the jury also awarded the employee $200,000 for emotional distress and $715,385 in punitive damages. The trial court then awarded the employee $208,443 in liquidated damages and $605,690 in attorney fees and costs. Following review of the award, the trial court reduced the front pay award to $188,666 but otherwise kept the other damages amounts the same, resulting in the $1.3 million damage award.

The Massachusetts Supreme Judicial Court affirmed the entire award.

So what did the court find persuasive in upholding such a large amount of punitive and liquidated damages? Here's what employers need to know.

Employee Took Leave for Surgery

In this case, an information technology manager for a public utility company had worked for the employer for many years and received positive performance reviews. He informed an HR representative that he was postponing a previously scheduled knee surgery to have a tumor removed from his right foot. His surgeon provided a medical certification informing the employer that the employee would need between four and six weeks of FMLA leave following the surgery and would need to wear a medical boot before transition to weight-bearing activities.

Following the surgery, the employee told the HR representative that he wanted to return to work early to avoid exhausting all of his allotted vacation time. The employer told him that he could not return early without a certification from his surgeon, but the employee was unable to obtain the certification until his return to the surgeon several weeks later.

When the employee discovered he would be unable to return from leave without exhausting his vacation time, he requested to be paid under the employer's salary continuation policy.

During the last few weeks of his FMLA leave, the employee went on a previously scheduled vacation to Mexico, a trip he took every year and that was scheduled well in advance. The employee stated at trial that he limited his activities during the trip due to his recovery.

When his paycheck did not reflect what he thought he should have received under the salary continuation policy, he e-mailed the HR director requesting a corrected paycheck and a copy of the policy so that he would not receive "any surprises" when he took additional FMLA leave for his anticipated knee surgery.

The HR director did not provide the employee with a copy of the requested policy but forwarded the employee's e-mail to an HR manager stating, "Is he serious?" to which the HR manager replied, "OMG."

The same day as the e-mail correspondence, the employer learned that the employee had taken the vacation to Mexico. The HR director launched an immediate investigation into the employee's activities while on leave. The company obtained video of the employee lifting luggage out of a car at the airport. The employee explained that he tried to return to work early, that he was wearing a boot while engaging in the questionable activities and that the activities were not inconsistent with the limitations described in the medical forms from his surgeon. However, despite this information, the HR director and another employee conducting the investigation recommended the employee's termination and did not share the employee's FMLA forms with senior management. The company then fired the employee. 

Mistaken Belief

At trial, the HR director testified to her belief that an employee on FMLA leave could not take a vacation. In addition, the company's lawyers showed photos from the employee's vacation in Mexico of the employee standing and holding a large fish, despite the fact that the company did not have knowledge of the photos when it made the decision to terminate the employee.

[SHRM members-only HR Q&A: How do I know if an employee's medical absence qualifies for FMLA leave?]

The state supreme court explained the analysis an employer should use when determining whether an employee has abused his FMLA leave:

We clarify today that an employer may validly consider an employee's conduct on vacation—or, for that matter, anywhere—that is inconsistent with his or her claimed reasons for medical leave, when the employer has such information at the time the employer is evaluating whether leave has been properly or improperly used.

Here, [the plaintiff] took FMLA leave to allow his foot to recover fully from surgery. Such recovery could take place in a warm climate as well as in a New England winter. That being said, vacationing while on FMLA leave may take either permissible or impermissible forms. An employee recovering from a leg injury may sit with his or her leg raised by the sea shore while fully complying with FMLA leave requirements but may not climb Machu Picchu without abusing the FMLA process. Careful consideration of the reasons for the medical leave and the activities undertaken, including the timeline for rehabilitation and recovery, are required to determine whether FMLA leave has been abused.

In reviewing punitive and liquidated damages awards, the state high court found that the employer, while honest in its belief that it was complying with the FMLA, was not objectively reasonable in its belief. The trial court found that the employer ignored the plaintiff's medical records and FMLA application and instead made its decision based on "shock, outrage and offense" that the employee might request additional FMLA leave for knee surgery.

The shock and outrage were memorialized in the e-mail exchange between the HR director and the HR manager. The court also concluded that the punitive damages could be awarded based on the jury's possible belief that the HR director was hostile to the idea of the employee taking additional FMLA leave as demonstrated by her e-mail. In addition, trial testimony indicated that the HR director believed that any vacation while on FMLA leave was inconsistent with such leave. Thus, the court upheld the punitive and liquidated damages awards, providing the employee with more than a million dollars in damages.

Employer Takeaways

The key takeaways from the decision are that employers should refrain from making knee-jerk decisions relating to the FMLA based on what initially might seem to be employee abuses of leave. Decisions to terminate employees should be based on a reasoned review of the facts, including all of the medical information provided by the employee's medical providers. Finally, as with any HR decision, managers should be very careful regarding the information they memorialize in e-mail exchanges, because firing off a message based on an initial reaction can return to haunt the company as "Exhibit A" in a lawsuit several years down the road.

The case is DaPrato v. Massachusetts Water Resources Authority, Mass. Sup. Ct., No. SJC-12651 (June 5, 2019).

J. Lane Crowder is an attorney with Baker Donelson in Chattanooga, Tenn.

[Visit SHRM's resource page on the Family and Medical Leave Act.]