Roadway Express, Inc.,
is a commercial trucking company that belongs to a multi-employer bargaining unit.
This unit is party to a collective bargaining agreement that requires the
employers to make financial contributions to the Wisconsin Health Fund (WHF). The
fund provides health and welfare benefits, including short-term disability
benefits, to employees the agreement covers. The short-term disability benefit
is available to an employee who has become disabled and unable to work because
of a nonwork-related injury. The WHF is administered by a board of trustees comprising
employer and employee representatives.
Employer Requires Use of
Paid Leave
Roadway employee Alice
Repa was injured outside of work, necessitating surgery and six weeks off work.
She was granted short-term disability benefits under the WHF of $300 a week for
six weeks. On the same day Repa applied for the WHF benefits, she requested FMLA
leave from Roadway for the six weeks. Roadway granted the FMLA leave, notifying
Repa that she had to use her accrued paid leave during the time off.
Roadway paid her for
five sick days and two weeks of vacation. She received this payout in addition
to the $300 per week she had gotten through the WHF. Repa sued Roadway, arguing
that the company violated the FMLA by requiring her to use her sick and
vacation days when she was already receiving disability benefits under the WHF
during the leave. Roadway argued that the FMLA and U.S. Department of Labor
regulations permit an employer to require employees to use their accrued paid
leave during otherwise unpaid portions of FMLA leave.
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No Paid Leave Along with
Disability Pay
A federal appeals court
sided with Repa, holding that a DOL regulation prohibits an employer from requiring
the use of paid leave during a FMLA leave when an employee is concurrently
receiving temporary disability benefits.1
The appeals court noted
the FMLA provision stating that “an employee may elect, or an employer may
require the employee, to substitute accrued paid vacation leave, personal
leave, or family leave” for an unpaid FMLA leave. This substitution, however,
is limited by a DOL regulation that provides: “Because the leave pursuant to a
temporary disability benefit plan is not unpaid, the provision [in FMLA] for
substitution of paid leave is inapplicable.” The court pointed out that this
DOL regulation limits an employer’s right to require use, or substitution, of
paid leave, whether the temporary disability benefit plan is the employer’s own
plan or a third-party plan like the one covering Repa.
Impact of Ruling
Although this case did
not arise in
federal courts around the nation will likely look to it for direction because
it’s the first opinion on the issue of requiring an employee to use paid leave
when the person is receiving other pay benefits during an FMLA leave. In
interpretation of the FMLA regulation would prohibit employers from requiring
employees to use up accrued paid time off during a leave that qualifies under
the FMLA when the employee is also receiving State Disability Insurance (SDI),
Paid Family Leave (PFL), workers’ compensation, or other salary replacement
benefits.
The safest route is to
amend FMLA policies to provide that employees can elect to use their vacation
or sick leave when salary replacement benefits are available but they’re not
required to do so. Alternatively, employers can still require the use of
vacation or sick leave during the seven-day SDI and PFL waiting periods when
benefits aren’t paid out.
This case is online at
www.ca7.uscourts.gov/.
_
1 Repa v. Roadway
Express, Inc., U.S.C.A. 7th Cir. No. 06-2360, 2007