Leave Management, Policy, and Compliance

Do You Have to Ignore Misconduct Uncovered During FMLA Leave?

By Kate McGovern Tornone, Editor

It’s an easy scenario to imagine: an employee goes out on leave and, when another employee takes on his work, she discovers performance deficiencies and maybe even misconduct. Is the employee’s job protected just because he is out on “job-protected” leave?

In Olson v. Penske Logistics, LLC, No. 15-1380 (Aug. 26, 2016), the 10th U.S. Circuit Court of Appeals held that employers do not need to turn a blind eye to misconduct that is uncovered during an employee’s leave of absence. It determined that employers are free to implement discipline—up to and including termination—against employees on job-protected leave in such circumstances.

Facts of the case

Kris Olson worked as a warehouse operations manager for Penske Logistics. He supervised about 30 employees and was responsible for hiring, moving and tracking inventory, inventory audits and more. During his tenure, he received mixed performance reviews and, on two occasions, was reprimanded for failing to follow procedures and instructions.

After 12 years with the company, he requested and received approval for FMLA leave. While he was out, however, his main client, Whirlpool, reported that a large amount of inventory was missing. Olson’s supervisor sent another warehouse manager to investigate and she uncovered what she deemed a “crisis.” She found that that Olson’s inventory report had many discrepancies, that he was 567 audits behind schedule and that his employees were not properly trained.

The employer investigated further and found that Olson had lied about extra work performed for Whirlpool and had hidden inventory losses in “ghost stows”—fake storage locations—for 4 years. He also told his staff to report missing items as damaged, Penske determined.

His supervisor and the human resources department agreed that Olson should be fired. Because of incorrect information provided by HR, his supervisor believed his FMLA leave had not been approved. Penske sent him a letter stating that because of the deficiencies and because of his unapproved leave of absence, it was firing him immediately.

Olson responded that his leave had been approved and when Penske heard about its mistake, it offered to postpone his termination until he had exhausted his FMLA entitlement. Olson did not accept the offer and filed suit.

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