How much proof is enough to avoid liability/litigation? This question haunts many employers who may be frustrated by employees skipping work or abusing leaves of absence. In a recent case, an employer had a videotape of an employee tending to his side business on a day he had reported he was taking intermittent leave for a migraine headache. Read on to find out why this was not enough to avoid a trial.

Case Background

John Dandridge had been employed by North America Fuel Systems Remanufacturing, LLC since 2005. Dandridge and another employee jointly owned and operated a business in commercial property, which was not, by itself, violative of Company policy.

In 2007, Dandridge had been approved for taking intermittent FMLA leave for "migraines" when he was incapacitated by, or receiving medical treatment for, his migraine headaches. If he felt better and was no longer incapacitated, he was required to return to work at any time during his work shift.

On May 23, 2011, Dandridge was scheduled to work from 2:30-10:30 p.m. After receiving a call on his cell phone at 11 a.m. from his business partner, Dandridge requested to take an FMLA absence for that day because of a migraine. Based on concerns that Dandridge would be abusing his FMLA leave, the Company retained a private investigator who used a video camera to obtain surveillance of Dandridge going into and out of his business property, as well as a convenience store.

A few days later, Dandridge was shown the video footage of his exiting a convenient store with a shopping bag and later entering his commercial property. Dandridge was told that he was being terminated from employment that day unless he chose to resign immediately, in which case the Company would not fight his unemployment benefits. Dandridge chose to resign, although he attempted to rescind it later.

“Honest Belief”

In the subsequent lawsuit, Dandridge alleged that his employer had interfered with his FMLA rights or retaliated against him for exercising them. The Company argued it should win without a trial (receive summary judgment) because it had an "honest belief" that Dandridge had engaged in fraud and dishonesty, which was a legitimate, non-discriminatory and non-retaliatory reason for discharging him.

In general, an employer's proffered reason for an adverse employment action is considered "honestly held" where the employer can establish that it reasonably relied on "particularized facts" that were before it at the time the decision was made. If the employer can demonstrate this, the plaintiff must then show that the employer's belief was not honestly held. The "key inquiry" is whether the employer made a "reasonably informed and considered decision" before taking adverse employment action.

The employer argued that the videotape alone was sufficient to support its "honest belief." Dandridge argued that the video surveillance was insufficient because, in order to conclude that he had been incapacitated and incapable of working, based solely on the video, the employer had to make assumptions and jump to a conclusion without "a reasonable basis."

During the litigation, Dandridge claimed that his business had been burglarized and he had to attend to that situation, despite having a migraine. Dandridge admitted, however, that when he called in sick, he was not incapacitated at the time and he did not receive any medical treatment that day. Dandridge claimed that his migraine headache started that morning, which prompted him to take off work because he knew it would intensify later in the day when he was scheduled to work. In short, Dandridge argued that the Company had to conduct a more thorough investigation in order to establish its "honest belief" that he had engaged in fraud or dishonesty.

Although an employer need not conduct an "optimal" investigation in order to apply the honest belief rule, the Court found that the limited and focused nature of the employer's investigation in this case – relying solely on the video – was not sufficient to avoid a trial. The Court noted that the employer had not conducted interviews, taken informal statements, scrutinized the employee's medical records with the assistance of a nurse, requested documentation from the employee and given the employee an opportunity to submit additional relevant information, all of which had occurred in a previous case establishing the "honest belief" defense. As a result, the Court denied summary judgment.

Takeaway for the Prudent Employer

Even though it may appear that an employee has been “caught red-handed,” the prudent employer investigates the surrounding circumstances before discharging an employee. Taking the time to fully understand (and document) the facts and circumstances before implementing disciplinary actions will help reduce potential liability in discharge situations. Prudent employers can learn more about the steps to take during the employee discharge process here.