The Family Medical Leave Act ("FMLA") requires an employer to restore an eligible employee who takes FMLA to the position the employee held when the FMLA leave commenced or to an equivalent position. Most cautious employers take this to mean that they cannot terminate an employee on the day he or she returns from FMLA leave; however, in Winterhalter v. Dykhuis Farms, Inc., Case No. 11-1743 (6th Cir. July 23, 2012), the Sixth Circuit allowed an employer to do just that under certain circumstances.

In Winterhalter, Robert Winterhalter ("Winterhalter") began working for Dykhuis Farms ("Dykhuis"), a pig farm, in 2007 as a manager of the breeding herd earning $55,000 a year. In 2009, Dykhuis converted one of its facilities to raise young female pigs for breeding and transferred Winterhalter to manage this herd without reducing his salary. Winterhalter supervised two employees. The prior manager only earned $45,000, and one of the employees Winterhalter supervised earned less than $30,000 a year.

In May 2009, Winterhalter injured himself at work but continued to work into the fall of that year. During this time period, Dykhuis' bank informed it that it must take "immediate and drastic measures to improve its financial performance, including immediately reducing the size of its operations and overhead." In response, Dykhuis laid off thirteen full-time employees over a seven-month period and reduced the size of its breeding herds. In total, the farm Winterhalter worked at suffered a twenty-seven percent reduction of herd from September 2009 to January 2010. By October 12, 2009, and shortly after Dykhuis started its reductions, Winterhalter gave Dykhuis notice and went on FMLA leave. While Winterhalter was on leave, Dykhuis discussed laying Winterhalter off due to lack of work. Dykhuis determined that those employees who had assumed Winterhalter's duties in his absence were doing "great" and decided to go through with the lay-off.

On the day Winterhalter returned from leave, Dykhuis informed him by letter that his position was being eliminated because of "financial reasons," and reference was also made to his "job performance" and verbal warnings he had received over the past two and a half years. Two weeks after Winterhalter's termination, however, Dykhuis posted internally for a pig manager position, which paid $12.00 per hour.

Winterhalter sued Dykhuis in the United States District Court for the Western District of Michigan for FMLA discrimination, retaliation and interference. The district court granted Dykhuis' motion for summary judgment and the Sixth Circuit affirmed.

The Sixth Circuit first noted the FMLA's express requirement that entitles any eligible employee who takes FMLA leave "to be restored by the employer to the position of employment held by the employee when the leave commenced" or "to be restored to an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment." But, the court further noted that "these provisions do not create a greater right to reinstatement or protection against termination than the employee would receive if he had not taken FMLA leave."

Winterhalter's discrimination/retaliation case was reviewed under the McDonnell Douglas tri-partite burden shifting analysis. Winterhalter easily met his prima face case leaving the Court to review Dykhuis' legitimate, non-discriminatory, non-retaliatory reason for terminating Winterhalter and Winterhalter's evidence that Dykhuis' reasons for terminating him were a pretext for discrimination/retaliation.

The Court found that Dykhuis produced sufficient evidence to support its assertion that severe economic hardship forced it to eliminate numerous positions and that Winterhalter was the highest-paid, lowest-performing worker at the farm. This evidence included a November 2009 Employee Newsletter that stated that Dykhuis has "started [a] sow reduction plan as part of a long range strategy"; deposition testimony of Winterhalter's prior supervisors, notes documenting Winterhalter's performance deficiencies; and Winterhalter's performance evaluations describing his performance as below standards in three of six categories reviewed.

Winterhalter urged the Court to find pretext based on Dykhuis' new employee hires; however, upon closer review, the evidence showed that Dykhuis hired six new employees - five of which were part-time or seasonal positions as compared to the thirteen terminated full-time employees. Winterhalter also challenged Dykhuis' economic-hardship claim by pointing to the company's "moments of optimism," which included its celebration of "rising hog prices" and announcement that "it looks like we will turn profitable next year." The Court ultimately threw out Winterhalter's claim, finding that his evidence, even if true, did not create an issue of fact as to Dykhuis' claim of economic hardship because Winterhalter did not respond to Dykhuis' evidence of the bank's directive, demonstrate that pay disparities and his poor performance did not actually motivate the company's decision to terminate him or put forth any evidence that Dykhuis actually turned profitable.

Turning to Winterhalter's FMLA entitlement/interference claim, the Court noted that failed to prove that he was entitled to job restoration. Because there was no dispute that Dykhuis was going through a period of financial hardship at the time it terminated Winterhalter and that Winterhalter was the highest-paid, yet lowest-performing of the three workers at the farm, the court found that Winterhalter did not prove he was entitled to job restoration.

The lesson for employers is simple: Document well, and remember that just because an employee takes FMLA leave, he or she is not insulated from termination or lay-off. The FMLA does not give an employee a greater right to reinstatement or a protection against termination than the employee would get if the employee had not taken FMLA leave. An employer seeking to terminate (or not restore) an employee while on or shortly after returning from FMLA leave is going to need sufficient documentation to justify taking that action. Here, that attention to documentation enabled the employer to win its FMLA case even though it had terminated an employee the day he returned from FMLA leave.