This week the U.S. Court of Appeals for the Seventh Circuit, in Chicago, overturned a healthcare employer’s summary judgement win in an FMLA interference and retaliation case.  The case involved a managerial employee who in her employer’s view was terminated for performance – not meeting expectations – after being placed on a performance improvement plan, or “PIP.”  The fired manager took a different view however, alleging that she was discharged in violation of the FMLA because her employer failed to adjust and lower its performance expectations to account for time she was away on FMLA leave. The lawsuit argued and the appellate court found,  that expecting full time results from the plaintiff when she arguably worked only 80% of full time while on FMLA protected leave approximately 20% of the time, could amount to unlawful “interference” with and/or retaliation for, the plaintiff’s federally protected rights.  The court’s reasoning in overturning the trial court’s decision and sending the case on for trial, holds several important lessons for all employers:

1. Employers may need to lower productivity expectations for employees who miss substantial amounts of work while on FMLA, including intermittent leave.
2. Because there was a factual dispute as to how much intermittent FMLA leave the plaintiff had taken, and when, a trial was necessary to determine whether the plaintiff was entitled to a reduction in expectations during that time.
3. The performance improvement plan, or “PIP” the defendant employer issued prior to discharging the plaintiff failed to support its defense to claims that it fired the plaintiff for using FMLA leave.  Instead, the 7^th Circuit found that the PIP itself, coupled with comments allegedly made by managers who presented it to the plaintiff, actually supported the employee’s case by supplying evidence of “pretext;” i.e. that the defendants reasons for termination, were false.  Among the factors relied on in the Court’s opinion: (1) Managers allegedly told the plaintiff the PIP was not “formal” and did not ask her to sign it; (2) the PIP itself did not state that a consequence of failing to meet its expectations, could include termination; and (3) those who prepared the PIP acknowledged that its expectations probably were impossible to meet.

The plaintiff in the case worked as a manager for a multisite healthcare provider. Her primary responsibility was to supervise a team of employees to ensure that newly acquired hospitals where properly integrated into the employer’s operations.  The volume of acquisitions increased dramatically during the plaintiff’s 6 years with the company and the team she oversaw also grew to approximately 30 employees.  As business grew so too did the expectations of the plaintiff and the team she managed. During the year prior to her termination the plaintiff took several weeks of contiguous FMLA leave, followed by intermittent leave over the ensuing several months.  All leave was approved by the employer.  However, the plaintiff was eventually placed on a performance improvement plan (PIP) for failing to accomplish all of the many demands of her managerial position.  The employer also received negative feedback from a survey of employees she supervised.  When the plaintiff was ultimately terminated for poor performance she sued, alleging that while she was allowed to take FMLA leave, she was discriminated and retaliated against by being held to productivity requirements as if working full time hours. 

The Court did not rule in the plaintiff’s favor, but remanded the case back to the lower court to be tried. Among the issues to be decided at trial, were just how much intermittent leave the plaintiff took.  The employer claimed she took only an insignificant amount of intermittent FMLA leave, whereas the employee claimed she missed 1 day per week during the relevant period, or 20% of the time. Had this employer accurately tracked and recorded her use of FMLA it likely would have prevailed on appeal and would not have to face a trial. Further, the above-described manor in which the PIP in this case was treated clearly did more harm than good. Thus, this decision holds the following LESSONS:

1. Tracking and accounting for employees’ use of FMLA, can be a big deal!
2. Productivity expectations for employees may need to be adjusted for periods of absences protected by FMLA.
3. Sugar coating a PIP, or any other disciplinary notice for that matter, is unwise. No documentation is better in court than poor documentation, so if you determine to “write someone up,” be certain it is warranted and be very clear about what this author calls the “3 Ds”: (1) Explain why the employee is being disciplined (what is the employee doing that they should not be doing, or what are they not doing that they should be doing); (2) Explain the expectations from the discipline; and (3) Explain the consequences of the discipline (what consequence should the employee expect if he/she fails to meet the stated expectations).

The employer in this case was put in a difficult position where its business needs and legitimate expectations of the plaintiff employee’s managerial role were expanding roughly during the same period she used FMLA leave.  The FMLA itself specifically provides that employees are not entitled to any rights to which they would not have been entitled had they never taken protected leave. The facts in this case suggest that expectations for the plaintiff’s performance were on the rise due to the employer’s expansive growth, and may have occurred regardless of whether she did or did not take FMLA leave. However, thanks to disputes over how much FMLA leave was used and the court’s criticism of the employer’s PIP, the employer is left to make these and other arguments at trial.

Questions? Contact James Sherman in our Minnesota office by email or at 952-746-1700