The Family and Medical Leave Act (“FMLA”) has received much attention lately. Not only was it amended last year, but the Seventh Circuit appellate and Illinois district courts offered further FMLA guidance in three recent cases. All involve claims alleging interference with FMLA rights and retaliation for asserting those rights. The Seventh Circuit focused on employee conduct – in one case job performance deficiencies, and in another alteration of FMLA documentation, to find no violations of the employees’ FMLA rights. Cracco v. Vitran Express, Inc., 559 F.3d 625 (7th Cir. 2009); Smith v. The Hope School, 560 F.3d 694 (7th Cir. 2009.) However, the Northern District of Illinois cautioned employers that employees’ FMLA rights begin even before they have become eligible to take FMLA leave. Reynolds v. Inter-Industry Conference on Auto Collision Repair, (2009 U.S. Dist. LEXIS 4686, N.D. Ill. 2009.)

The Cases

Cracco v. Vitran Express, Inc.

Cracco was the service center manager for one of Vitran’s trucking terminals. While he was on FMLA leave, the company hired several replacement employees to cover his responsibilities. These employees discovered several problems: the terminal was disorganized, employees were not following procedures, freight remained too long on the dock, damaged freight was hidden, safety concerns existed, customers were complaining, and overtime was being mishandled. The company’s investigation confirmed these problems, numerous other errors, and falsified documents attributed to Cracco.

On this basis, on the day Cracco returned from leave, Vitran terminated his employment. He sued, claiming Vitran interfered with his FMLA rights and retaliated by not reinstating his employment. The trial court granted summary judgment to Vitran and the appellate court affirmed, ruling that FMLA allows employers to base adverse actions on significant performance problems discovered during an employee’s FMLA leave.

The Court rejected Cracco’s argument that because he was terminated on the day his FMLA leave ended, the termination decision was linked to his having taken FMLA leave. Finding the timing of the termination irrelevant, the Court further noted that even 15 years of good performance reviews did not prohibit the employer’s relying on information discovered after the FMLA leave began. Termination was based on job performance, not FMLA rights:

“If the FMLA allows an employer to base adverse employment actions on performance problems discovered (during) leave, the fact that the employer discharges the employee when he returns from leave cannot be sufficient evidence to establish causation. Otherwise, the employer would be forced to continue employing a substandard employee after the conclusion of leave or risk facing liability under the FMLA.” 559 F.3d at 632.

The case confirms that an employee’s right to reinstatement after FMLA leave has limits. Employees have no greater right to reinstatement than if they had been continuously employed. An employer can present evidence that the employee would not have been entitled to the position even if he had not been on leave. It is important to note, however, that strong evidence of continuous errors and falsification, rather than mere negligent performance, supported the company’s decision. In addition, Vitran did not refuse or reduce Cracco’s leave, but waited until leave ended to terminate. Employers should be cautious in applying the lessons of this case.

Smith v. The Hope School

Smith, a school aide, submitted a request for FMLA leave for her own medical condition. Her doctor’s certification specified diagnoses of muscle tension and neck and arm pain. Before submitting the certification, Smith added to the diagnoses in handwriting “plus previous depression” and backdated the form. She also filled out a separate “Attending Physician” statement, listing diagnoses of muscle tension, chronic headaches and depression. Smith had never been diagnosed with, nor treated for, depression.

While Smith was completing her FMLA documentation, Hope School began disciplinary proceedings based on her consecutive unexcused absences in violation of the attendance policy. A termination hearing was scheduled. After Smith submitted the FMLA documentation, the school suspected that the certification had been altered. Smith’s doctor confirmed this. Based on the failure to provide timely notice and the altered documentation, Hope School denied Smith’s leave request. At the termination hearing, the school determined that Smith had taken leave to which she was not entitled, resulting in unexcused absences that violated school policy. On that basis, Hope School terminated Smith’s employment.

Smith sued, claiming the denial of leave interfered with her FMLA rights and the termination constituted retaliation for seeking FMLA leave. In affirming summary judgment for the school, the appellate court agreed that denying leave based on a fraudulent leave request was not interference and that Smith’s termination was not retaliation in violation of FMLA. The Court noted that the issue of fraudulent documentation, different from fraudulent use of FMLA leave, had not previously been decided in the Seventh Circuit. Smith argued that she had a right to FMLA leave based on her actual medical condition, regardless of false documentation. Rejecting that, the Court ruled that employers need not ignore false information submitted by the employee.

However, the ruling is narrow, requiring a strong inference that the employee submitted false paperwork. Here, Smith added a condition with which she had not been diagnosed, without doctor certification submitted multiple false forms, and backdated them as well. The Court did not decide what would happen based on insignificant alterations – such as correcting typos or making a correction with the doctor’s approval – or if an employee re-submits a valid, unaltered certification.

Recent FMLA amendments now permit employers to contact physicians directly to authenticate or clarify FMLA certification. Strong evidence of false certification could justify denying FMLA leave depending on the specific facts. But, employers should recognize the difference between false certification and questioning whether the doctor’s diagnosis is correct. The latter circumstance would require a second medical opinion.

Smith’s retaliation claim alleged that she had been fired for being absent while on FMLA leave. The school responded that the termination was based on Smith’s violating attendance policy, not her FMLA request. Employers should be careful to handle attendance matters appropriately in the context of pending FMLA requests. The Court upheld summary judgment for the school on the retaliation claim, finding that because the fraudulent leave request was invalid, Smith could not have been fired in retaliation for asserting FMLA rights.

Reynolds v. Inter-Industry

Reynolds began working for Inter-Industry on August 25, 2005. On August 16, 2006, he requested FMLA leave to care for his newborn son beginning in November (when the child, born premature, would come home from the hospital.) Later that day, Inter-Industry fired Reynolds “purely related to his skill set.” Claiming he was fired for requesting FMLA leave and interference with his FMLA rights, Reynolds sued. The company moved to dismiss, arguing that Reynolds was not an “eligible” employee because he had been employed less than the 12 months required by FMLA.

The district court noted that this was a case of first impression in the Northern District and in the Seventh Circuit. The novel issue was whether an employee may assert an FMLA claim if he was employed less than 12 months, but requested leave to begin after the 12 months. The Court denied the dismissal motion, stating that an employer cannot fire an “ineligible” employee for intending to take FMLA leave after the employee becomes eligible. The Court reasoned that while FMLA refers to “eligible employees,” it also contemplates that notice of foreseeable leave should be given 30 days before the leave begins. The Court found that FMLA protects even the “attempt” to exercise the right to FMLA leave, such as asking for the leave before being eligible to take it. The Court also noted FMLA regulations requiring that “[t]he determination of whether an employee… has been employed …at least 12 months must be made as of the date the FMLA leave is to start.” 29 C.F.R. §825.110(d).

Lessons for Employers

Employers in the Seventh Circuit now have judicial guidance for dealing with the discovery of serious performance problems during FMLA leave, as well as significant alterations of FMLA documentation. While the Court ruled for the employers in both Cracco and Smith, these were narrow rulings that dictate careful and appropriate handling on a case-by-case basis. Employers are further advised that FMLA protects employees from adverse actions even before they become eligible for FMLA leave. Employers should carefully review FMLA requirements when applying your policy and seek legal assistance before taking adverse action.