Employers often inquire whether they can terminate an employee while the employee is on an approved Family and Medical Leave Act (FMLA). Last week, the 7th Circuit Court of Appeals in Chicago held that an employer may terminate employees – even if on an FMLA leave – if the employer discovers misconduct that would justify termination had the leave not been taken. Further, the fact that the leave permitted the employer to discover the problems cannot logically be a bar to the employer’s ability to fire the deficient employee. Daugherty v. Wabash Center, Inc. & Jeffrey Darling, No. 08-3104, (August 14, 2009).

In 1999, Michael Daugherty began working for Wabash Centers, Inc. (“Wabash”), a not-for-profit agency serving adults and children with developmental disabilities. From 1999 – 2006, he was quickly promoted from maintenance assistant to vice president of information technology. Simultaneously, he also served as vicepresident and chief information officer for a Wabash joint venture. In the spring of 2006, he got involved in “email wars” with several Wabash employees and also had staff members at the joint venture complain about his management style. At a June 19, 2006 meeting with his superiors, he was given a written reprimand for sending abusive e-mails and for his management style. After leaving the meeting, he visited his doctor and returned with a request for a two-week FMLA leave, which was approved by Wabash.

During his FMLA leave, Wabash uncovered troubling information about Daugherty’s work performance. Specifically, he (1) made six unauthorized purchases using the company credit card, (2) remotely entered the company’s information systems and deleted e-mails, and (3) failed to back-up the company’s servers. On July 3, 2006, he returned to the company and presented a new order from his doctor for continued leave, which was granted. While he was in the office, his superiors asked him to refrain from accessing the Wabash network while on leave and to turn in his passwords and keys, which he refused. Wabash requested his keys and passwords on two other occasions. On July 31, 2006, a computer forensic expert reported that Daugherty deleted 5,000 files on June 19th, the same day he was first disciplined and applied for FMLA leave. On August 9th, during the approved FMLA leave, Wabash terminated Daugherty for his authoritarian management style, poor IT practices, failure to return the keys, missing files, and improper use of the credit card.

Generally, an employee who takes leave under the FMLA is entitled to be restored to his former position, with equivalent pay and benefits. However, the right is not unlimited, if the employer discovers misconduct that would justify termination had the leave not been taken. Here, the Court found that there was no genuine dispute concerning Daugherty’s entitlement to reinstatement and indicated that even if had never taken leave; he was not entitled to keep his job.

Nancy Sasamoto cautions that while employees on FMLA are not “fire-proof”, such terminations frequently give rise to claims of retaliation and violation of the FMLA. Therefore, employers should consult with legal counsel before proceeding to take such action.