Honest Belief of FMLA Misuse Sufficient to Support Termination

November 20, 2012

The U.S. 7th Circuit Court of Appeals (whose rulings apply to all Wisconsin employers) recently affirmed an employer’s decision to terminate an employee because it reasonably believed the employee was lying about his use of Family and Medical Leave Act (FMLA) leave. As employers know, FMLA abuse is widespread, and this decision supports employers’ ability to take swift action against FMLA abuse. It’s important to emphasize that the employer hired a private investigator and had solid evidence of the abuse. If there is not solid evidence, an FMLA abuse case may end up before a jury, and some employees will sue regardless of whether the case will be thrown out before trial.

Facts

Daryl Scruggs worked for Carrier Corporation. In 2004, Scruggs’ mother was moved to a nursing home, requiring him to seek intermittent FMLA leave to assist with her care. From 2004 to 2007, he submitted FMLA certification paperwork on five occasions. All but the last certification permitted him to take leave for nursing home visits and transportation to doctors’ appointments. The fifth certification, which was in effect at the time of his termination, permitted him to take his mother to doctors’ appointments once every six months, but it didn’t mention nursing home visits. Carrier approved all of his requests for FMLA leave.

In 2006, Carrier set out to fix an employee absenteeism problem that had developed at its Indianapolis, Indiana, manufacturing plant. Carrier hired a private investigator to follow approximately 35 employees who were suspected of abusing the company’s leave policies. After surveillance revealed that Scruggs never left his home on a day he requested FMLA leave, the company suspended him pending further investigation.

Scruggs submitted several documents demonstrating that he picked up his mother from the nursing home on that day and took her to a doctor’s appointment. He provided documentation from his mother’s doctor and the nursing home as evidence that he was assisting his mother on July 24, 2007. The evidence included (1) an August 9 letter from the business office manager of the nursing home stating that he was at the facility on July 24 to take his mother to a doctor’s appointment, (2) a sign-out sheet from the nursing home noting that Scruggs signed his mother out at 11:30 a.m. on July 24, and (3) three nearly identical notes from his mother’s doctor. The first note stated that Scruggs was his mother’s only means of transportation and that he mistakenly brought her to a doctor’s appointment on July 24, although the appointment was scheduled for September. The second letter was the same except for an additional notation that indicated that he was at the doctor’s office sometime between 10:00 a.m. and 10:30 a.m. The third note added “per Dr. R. Jeffrey Price.”

Carrier reviewed Scruggs’ documentation and compared it to its records and the surveillance video. The company observed that Scruggs had signed his mother out on the sign-out sheet provided by the nursing home only three or four times in 2007, although he requested FMLA leave on several other occasions during that same period. Further, although he insisted he was his mother’s only transportation, others had signed his mother out. The documentation from the nursing home and the doctor’s office was inconsistent because, according to the notes, Scruggs took his mother to the doctor at approximately 10:30 a.m. but didn’t check her out of the nursing home until 11:30 a.m.

After considering all the evidence, on August 17, Carrier terminated Scruggs for violating plant rules. A grievance hearing took place on August 23. During the hearing, Scruggs explained that on the morning of July 24, his brother picked him up at 8:00 a.m. and that he left his house through the back door. He and his brother then picked up their mother from the nursing home, took her out to breakfast, and transported her to the doctor’s office. Afterward, Scruggs was dropped off at his neighbor’s house at 11:00 a.m. and returned home through his back door, but he could not recall his neighbor’s name when questioned. He also stated that he believed it was too late to go to work for the remainder of his shift. When questioned as to why the nursing home’s sign-out sheet noted he checked his mother out at 11:30 a.m., he stated that the sheet was wrong.

The employer did not find his account credible and denied his grievance. Scruggs filed suit. The federal district court granted summary judgment (dismissal of the case before trial) in favor of Carrier, and Scruggs appealed.

Interference 

Scruggs alleged that Carrier’s decision to terminate him interfered with his right to reinstatement and his right to continue to take intermittent FMLA leave to care for his mother. To prevail on a claim for FMLA interference, the employee must prove that (1) he was eligible for the FMLA’s protections, (2) his employer was covered by the Act, (3) he was entitled to leave under the statute, (4) he provided sufficient notice of his intent to take FMLA leave, and (5) his employer denied him FMLA benefits to which he was entitled. An interference claim doesn’t require an employee to prove discriminatory intent on the part of his employer; such a claim only requires proof that the employer denied him his entitlements under the Act.

An employee who takes leave under the FMLA is entitled to reinstatement only if he takes leave for the intended purpose. Thus, an employer can defeat an interference claim by showing, among other things, that the employee didn’t take leave for the intended purpose. In the 7th Circuit, because an employee has no greater right to reinstatement or other benefits and conditions of employment than if he had been continuously employed, an employer needs to show only that it refused to reinstate the employee based on an honest suspicion that he was abusing FMLA leave.

The 7th Circuit found that Carrier suspected Scruggs was misusing his FMLA leave based on his prior absenteeism. The employer hired a private investigator to observe him on a day that he requested FMLA leave to care for his mother. The video surveillance revealed that he didn’t appear to leave his house that day. When Carrier questioned him, he couldn’t recall what he did that day but stated that he did not misuse FMLA leave. Although he later provided documentation from his mother’s nursing home and doctor’s office, the paperwork only raised more questions for Carrier. The documents he produced were inconsistent and conflicted with Carrier’s internal paperwork.

The 7th Circuit found that taken together, this was enough evidence for Carrier to have an honest suspicion that Scruggs misused FMLA leave. Accordingly, the court found that Carrier did not violate his FMLA rights because it honestly believed he was not using his leave for its intended purpose.

Retaliation Claim 

Scruggs also claimed that Carrier retaliated against him for using FMLA leave. An employee who alleges that his employer retaliated against him for exercising his rights under the Act can proceed under the direct or indirect methods of proof. Scruggs proceeded under the direct method, so he had to present evidence of (1) a statutorily protected activity, (2) a significant adverse action taken by the employer, and (3) a causal connection between the two. An employee can prevail under the direct method by showing an admission of discrimination or by constructing a convincing mosaic of circumstantial evidence that allows a jury to infer intentional discrimination by the decision maker. The company argued that Scruggs couldn’t establish a causal connection between his use of FMLA leave and his termination.

Carrier terminated Scruggs for misusing FMLA leave on August 17, over three weeks after he requested leave on July 24. His request for leave was not denied, nor was he prohibited from returning to work after taking leave. It was not until August 7, when Carrier received a report from its investigator indicating that Scruggs had misused FMLA leave on July 24, that the company began taking steps to terminate him. Carrier held an honest suspicion that he was misusing FMLA leave at the time it decided to terminate him. The court stated that it couldn’t conclude from these facts that Carrier intentionally discriminated against Scruggs for taking FMLA leave. The 7th Circuit noted that if it ruled otherwise, then virtually any employee fired for misusing FMLA leave would be able to state a claim for retaliation. Scruggs v. Carrier Corp., 688 F.3d 821 (7th Cir., 2012).

Bottom Line 

The FMLA is an ongoing headache for employers. Intermittent leave can create huge headaches in terms of the administrative burden as well as scheduling other employees to cover for the employee taking intermittent leave. Also, certain medical conditions may not have a hard end date, and even after FMLA leave is exhausted, concerns remain over whether the employee must be accommodated with intermittent leave under the Americans with Disabilities Act (ADA). This case supports employers taking bold steps to cut down on FMLA abuse. However, you should proceed with some caution so a bold move doesn’t result in costly litigation or a large jury verdict.

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For more information about "Honest Belief of FMLA Misuse Sufficient to Support Termination," contact Saul C. Glazer at sglazer@axley.com or 608.260.2473.