HR Management & Compliance

How to Handle Employees on Leave When There is a Reduction in Force

When planning a reduction in force (RIF), employers may be nervous about laying off an employee on protected leave. But if done correctly—and for reasons other than the leave—employers can avoid violating the law.

Reduction in force

A recent court case involving the Family and Medical Leave Act (FMLA) illustrates how that can be accomplished.

Facts of the Case

Weltman, Weinberg & Reis (WWR), a law firm specializing in collections, began a multi-phase RIF in 2012 because demand for its services was declining. According to court documents, WWR ultimately laid off a third of its staff.

The firm identified five factors for choosing which employees to lay off. In order of importance, they were: (1) work, functionality, and the ability to absorb responsibilities; (2) overall work performance; (3) any history of disciplinary action; (4) ability to adapt to change and work on a team; and (5) seniority.

Clerks in WWR’s legal processing department were ranked and one was chosen for a January 2013 layoff. In March of that year, a second clerk was let go. During a third round in August, two workers were chosen, including “Rachel,” who was described in documents as “a ‘C’ player.” However, other clerks voluntarily quit, so the two August RIFs were postponed until the next round of layoffs in December.

When December came around, Rachel was on FMLA leave. The employer carried out the RIF but opted to postpone Rachel’s official termination until her scheduled return in January, reasoning that another clerk might leave voluntarily, making room for her to stay. That did not happen, however, and she was laid off in January.

Rachel sued, alleging that WWR retaliated against her for using FMLA leave. A district court, however, dismissed her claims, finding that the employer’s reasons for selecting Rachel were legitimate. She appealed.

Appeals Court Weighs In

On appeal, the 6th U.S. Circuit Court of Appeals, which covers Kentucky, Michigan, Ohio, and Tennessee, agreed with the lower court.

Rachel was not able to tie her FMLA leave to her termination, the court said. WWR’s firm-wide RIF was a legitimate reason for eliminating her position and Rachel failed to provide evidence from which a reasonable jury could find that the employer retaliated against her.

She pointed to two other employees who exercised their FMLA rights who also were selected for the RIF. But the layoff spanned several states and years, the court said. Viewed in context, her evidence fails to cast doubt on the employer’s given reasons, it concluded.

Rachel also argued that WWR retained less-experienced and lower-performing clerks. But the employer—from the beginning of the process—didn’t rely solely on those factors. “[A]lthough Rachel may wish the law were otherwise, an employer need not give any special weight to seniority in making employment decisions,” the court said.

Finally, Rachel argued that a missing document showed retaliatory animus. WWR encouraged supervisors to memorialize layoff decisions in writing. While her supervisor told HR in an e-mail that one would be forthcoming for Rachel, it never appeared.

The court, however, found that WWR supervisors rarely fulfilled this request. “For [Rachel] to be entitled to have a jury draw an adverse inference, she must, at a minimum, establish that a reasonable jury could find that [the supervisor] in fact prepared the purported write-up. She fails to do so.”

Therefore, Rachel failed to demonstrate that WWR’s justification for firing her was pretext for unlawful discrimination, the appeals court concluded, upholding the lower court’s ruling (Partin v. Weltman Weinberg & Reis Co. LPA, No. 16-3191 (6th Cir. Nov. 28, 2016)).

Employer Takeaway

There are a few circumstances in which employers do not have to restore workers on FMLA leave to their jobs, and a legitimate reduction-in-force is one of them.

“[E]mployers are not required to continue FMLA benefits or reinstate employees who would have been laid off or otherwise had their employment terminated had they continued to work during the FMLA leave period as, for example, due to a general layoff,” the U.S. Department of Labor says in its FMLA Compliance Guide.

While WWR was able to show that it consistently applied nondiscriminatory selection criteria, other employers haven’t achieved that standard. In another recent case, a court allowed an employee to proceed with his FMLA retaliation claim because he was able to show that he was the only employee subject to a RIF. The employer also had no documentation of a planned layoff and listed a position similar to the plaintiff’s around the same time (Lightner v. CB&I Constructors, Inc., No. 14-cv-2087 (S.D. Ohio, Nov. 14, 2016)).

As demonstrated by both Partin and Lightner, courts are likely to require careful planning, documentation, and selection criteria that doesn’t penalize workers who are on leave.

Finally, employers also may want to ensure that workers on leave receive the same severance packages as others included in the RIF. Two companies in California were sued by the U.S. Equal Employment Opportunity Commission a few years ago when they awarded severance packages based on whether employees worked during the previous 6 months. This discriminated against workers who were on medical leave at the time, in violation of the Americans with Disabilities Act, the commission said. The two companies paid $6 million to settle the suit.

Kate TornoneKate McGovern Tornone is an editor at BLR. She has almost 10 years’ experience covering a variety of employment law topics and currently writes for HR Daily Advisor and HR.BLR.com. Before coming to BLR, she served as editor of Thompson Information Services’ ADA and FLSA publications, co-authored the Guide to the ADA Amendments Act, and published several special reports. She graduated from The Catholic University of America in Washington, D.C., with a B.A. in media studies.

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