HR Management & Compliance

Transfer to Lesser Sales Territory Was Okay under FMLA, Court Says

Reassigning a salesperson to a new sales territory after her return from maternity leave does not violate the core principles of job restoration under the Family and Medical Leave Act, according to a recent U.S. district court decision.

As long as the proposed change did not result in a base salary reduction or more burdensome working conditions — and the commission structure remained the same as it was before FMLA leave — the loss of what may even be considered a “plum” sales territory did not amount to penalizing the employee because “she never gave it a try,” concluded the Eastern District of Michigan, Southern Division court. The case is O’Sullivan v. Siemens Industry, Inc., No. 11-11832 (E.D., Mich., S. Div. Sept. 24, 2012).

Case Essentials

Rachael O’Sullivan sold service contracts for fire suppression systems as a Siemens Industry sales representative from 2000 to 2010. She took medical leave for the birth of her second child, but when she was about to return, she learned that her supervisor changed her area of responsibility to a territory that she says had less sales potential than the one she covered before she left on FMLA leave.

O’Sullivan did not return to work. Instead, she filed a complaint alleging that she was “constructively discharged” from her job and that Siemens Industry interfered with her right to maternity leave and retaliated against her in violation of FMLA. The district court granted summary judgment in favor of Siemens, finding that O’Sullivan did not trigger her right to reinstatement under FMLA because she voluntarily chose not to return to work.

“[A]n employee who quits a job in apprehension that conditions may deteriorate later is not constructively discharged,” the O’Sullivan judge wrote. “Instead, the employee is obliged ‘not to assume the worst, and not to jump to conclusions too fast’.”

Because Sullivan did not return to work at the end of her leave, she has no evidence to refute the clear record of two other sales representatives doing relatively well in that same territory, with at least one outpacing O’Sullivan’s own results in a supposedly more profitable region, District Judge David M. Lawson wrote in his opinion.

Lessons Learned

If O’Sullivan actually had returned to give the new job a try, it appears that the district court may have looked more favorably upon her claim. “Although [O’Sullivan] may make out a case that the new territory was not ‘equivalent’ for the purpose of her FMLA interference claim, it does not necessarily follow that the reallocation of territories was ‘adverse action’ for the purpose of showing retaliation.”

While it may be tempting for employers to identify replacements and “permanent” successors for employees who are on leave (specifically in the case of mostly commission-based sales account representatives), it is a direct FMLA violation to not have the same or equivalent position waiting for the employee upon return from leave.

Even though O’Sullivan appears to leave an opening for managers to reassign sales territories at their discretion, other court findings have been sympathetic to the complaints of employees who return to a different and seemingly inferior sales position with a notoriously lower number of prospects.

Employers should use caution when formally reassigning sales territories to employees returning from leave unless there is a well-documented explanation for the reassignment. If the territory change leads to an immediate loss in commission income and a steady decline in the employee’s sales record, then an employer may be hard pressed to defend its decision.

Additional Resources

See ¶460 Failure to Return in the Family and Medical Leave Handbook.

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