June 2012

By: James B. Sherman, Esq.

On May 30, 2012, the State Supreme Court decided a case that is sure to impact the way most Minnesota employers handle pregnancy related leaves of absence and how they reinstate employees following such leaves. The case involved the Minnesota Parenting Leave Act (MPLA). Unlike the federal Family and Medical Leave Act (FMLA), which applies only to larger employers with 50 or more employees, the MPLA applies to any employer that employs 21 or more employees at any single site. Therefore the decision applies to many more employers and provides a rare court interpretation of employer responsibilities under the MPLA.

The case involved an employee who was terminated upon the conclusion of her maternity leave as part of a workforce reduction (RIF). Among the issues argued to the Court were: (1) whether the plaintiff had adequately triggered her rights and the employer’s obligations under the MPLA merely by requesting maternity leave; and (2) whether the employer was legally bound to reinstate the employee by virtue of a voluntarily agreement to extend the employee’s leave beyond the 6 weeks protected by the MPLA.

The plaintiff worked in the Minneapolis office of Robert Half International, Inc., the well known international staffing service. The plaintiff was employed to either recruit or place temporary or permanent staff with the company’s clients. The company measured employee productivity by what it called “per desk average” of revenues generated, or PDA. Initially the plaintiff met the company’s expectations for her PDA and was promoted on January 1, 2008. Soon after her promotion, however, her production fell sharply to the lowest among employees with similar tenure in her Minneapolis office team. As a result the plaintiff was demoted.

It was during this same time period that the plaintiff learned she was pregnant. She disclosed this fact to her Branch Manager in January, 2008. Later, in the summer of that year, the plaintiff experienced pregnancy-related health problems and disclosed this as well. The Branch Manager advised her that she had the option of taking early maternity leave to address any health related issues involved with her pregnancy. However, the plaintiff declined this option and kept working.

The plaintiff gave birth on August 29 ^th (which happens to be this author’s birthday) and her leave of absence began that day. She filled out company forms by requesting pregnancy-related short term disability (STD) leave. The form noted that FMLA leave ran concurrently with such leave. The company approved the leave request by letter stating she was eligible for up to 12 weeks of STD/FMLA leave in a 12 – month period. The letter went on to advise that she could request up to 4 weeks of additional personal leave at the conclusion of her STD/FMLA leave. However – and this was hugely important to the outcome of this case – the letter added that there would be “no guarantee of job reinstatement” at the “conclusion of personal leave.”

Unfortunately for the plaintiff in this case, as well as her employer and most other employers in America, the fall of 2008 saw the onset of a recession. As a result, with demand for staffing services plummeting by as much as 90%, Robert Half implemented a reduction in force (RIF) in January 2009. The plaintiff’s team in the Minneapolis office was reduced from 4 employees to 1. The sole remaining employee from the plaintiff’s team was the one with the highest productivity, or PDA, for 2008. It is important to note that in calculating the plaintiff’s PDA for that year, management did not measure productivity during her leave but apparently did measure her productivity during the time she was working while pregnant, including the period she experienced pregnancy-related health problems but opted not to take leave.

When she was terminated as part of the RIF the plaintiff brought suit. She claimed that the company violated the MPLA by failing to reinstate her following her protected maternity leave. She also claimed the RIF was a “pretext” for terminating her in retaliation for having taken maternity leave. After her claims were dismissed in the lower courts the plaintiff sought review by the Minnesota Supreme Court. This court grants appeals only where it determines there is an issue worth addressing, so it was likely from the start that the court wanted to issue a decision of importance to Minnesota employers regarding the pregnancy leave act (MPLA).

The first issue addressed by the Court was whether the plaintiff needed to specifically request leave under the MPLA to invoke rights under state law. Oddly enough, the lower courts had dismissed the plaintiff’s suit because she merely requested STD/FMLA leave when checking this box on the company’s leave request form. The Court readily reversed these rulings, relying on similar federal court decisions involving the FMLA and Department of Labor (DOL) regulations. The Court held that to invoke the MPLA and trigger employee rights and employer responsibilities under that law, all an employee need do is request leave of a type that is [provided by] the MPLA. The MPLA provides leave for: (1) birth or adoption of a child; (2) school conferences and activities; and (3) illness of a child. As a result an employee need only ask for time off work for any of these reasons, without mentioning the law, to trigger the application of the MPLA.

The next issue confronted by the Court was the plaintiff’s argument on appeal that her statutory right to reinstatement was extended with the employer’s extension of her leave of absence beyond the 6 weeks available under the MPLA (as opposed to 12 weeks of federal FMLA leave). The Court rejected this argument. The Court noted that the length of maternity leave expressly provided for in the MPLA: “…shall be determined by the employee, but may not exceed six weeks, unless agreed to by the employer.” Relying on this language the employee tried to argue that protected MPLA leave, along with its right of reinstatement, lasted beyond 6 weeks to whatever longer period was agreed to by the employer. But the Court noted: “[T]here is no language in the MPLA to suggest that an extension of leave also extends the right to reinstatement.”

The Minnesota Supreme Court again looked to federal court decisions involving the FMLA to support this conclusion: “Federal courts interpreting the FMLA have held that an expiration of [its maximum 12 weeks of leave in a 12 month period] terminates the right to reinstatement to the same or equivalent position.” The result may well have been different in this case if the employer had agreed, either intentionally or unwittingly, to extend both the employee’s leave and her right to reinstatement. However, in this case the employer’s policies as well as its letter approving her leave and offering additional “personal leave” at the conclusion of MPLA leave, explicitly provided that there would be no guarantee of reinstatement from additional personal leave.

As a result the plaintiff won one battle where the Court agreed she triggered her rights under MPLA; however, she lost the war when the Court ruled that those rights were extinguished once her 6 weeks of leave under that law were exhausted. This new decision provides Minnesota employers with a number of lessons for handling employee pregnancy and related leaves of absence.

• Employers cannot require that employees specify the MPLA before complying with the specifics of this state law; employee rights and employer obligations are triggered by any request or notice of the need for leave for any of the reasons provided in the MPLA (birth or adoption of a child; school conferences and activities; or illness of a child).
• Extending MPLA leave beyond the minimum of 6 weeks does not, in and of itself, extend the right of reinstatement; however, the Court appeared to recognize that an employer may give such rights to employees by agreement.
• Accordingly, employers who voluntarily extend MPLA leaves of absence beyond 6 weeks, or who extend them because they are covered employers under the federal FMLA which requires leaves of up to 12 weeks, should be clear about not also extending MPLA reinstatement rights.
• Though not a key part of the court’s decision, it can been noted by reviewing the facts of this case that pregnant employees who choose to continue working may be held to productivity standards applied uniformly to other similarly situated employees (though Minnesota law does provide for reasonable accommodations to pregnant employees).
• Reinstatement rights under either the MPLA or FMLA, are lost following the expiration of such leaves. In such instances employees may not be entitled by law to reinstatement, but they also cannot be treated disparately or retaliated against for having taken protected leave.
• Neither the MPLA nor the FMLA protects an employee from the consequences of a RIF or other employment action that would have resulted in termination regardless of whether they had taken protected leave.

A final lesson from this important decision is not apparent from the foregoing abbreviated version of the facts. The plaintiff alleged that her Branch Manager, the one to whom she initially disclosed her pregnancy, had made derogatory remarks about pregnant employees or job applicants. These allegations included remarks by the Branch Manager that it was “too bad” she could not hire a “great” applicant because she was pregnant, and that she might need to get rid of an employee who was taking fertility drugs to avoid being “stuck with her” if she got pregnant. Of course allegations are far from fact and these were deemed irrelevant because the Branch Manager played no roll in selecting the plaintiff for termination as part of the RIF. Still, if true the allegations may explain why this plaintiff chose to bring a lawsuit in the first place and litigate it all the way to the State’s highest court.

The lesson? Biased comments from managers can fuel lawsuits that cost time and money to defend, even if the employer wins in the end.

Questions? Please contact Wessels Sherman Shareholder James B. Sherman at (952) 746-1700, or email jasherman@wesselssherman.com.