Just when you may have thought the road was clear to an “honest belief” defense that linked employee termination to suspected leave abuse under the Family and Medical Leave Act, a ruling has put the brakes on that notion. A California appellate court has issued a decision against a large auto retailer that should cause you to slow down, brush up on any leave act your state government may have enacted and proceed with vigilance in all adverse employment actions.
Under the California Family Rights Act, an employer that fails to reinstate an employee who has been granted CFRA leave may not “defend a lawsuit … based on its honest belief [that] the employee was abusing his or her leave,” according to last week’s ruling of the 2nd U.S. District Court of Appeals of California, Division Seven. Presiding Justice Dennis M. Perluss reversed what he called the arbitrator’s “improper acceptance of the honest belief defense” and ordered a rehearing. The case is Richey v. AutoNation, Inc., No. B234711, 2nd Dis., Cal., Div. 7 (Nov. 13, 2012).
Facts of the Case
Sales manager Avery Richey lost his job four weeks before the expiration of his approved medical leave under CFRA. Power Toyota of Cerritos fired Richey because it believed he was misusing his leave by working part-time in a restaurant he owned.
Richey had been on CFRA leave for a back injury he had sustained while moving furniture at home. His physician certified he was unable to perform the duties of his job at Power Toyota.
While on leave, Richey claimed that he had only engaged in limited, light-duty restaurant tasks. One coworker said he observed Richey sweeping, bending over and using a hammer to hang a sign, while several other coworkers said they saw him taking orders and acting as a cashier.
Power Toyota terminated Richey because his actions were a direct violation of the company’s “policy barring other employment while on a leave of absence” that is outlined in the employee handbook. Richey said he did not think the policy applied to him because he is a restaurant owner and the policy statement reads: “You are not allowed to accept employment with another company while you are on approved [CFRA] leave.”
Court Weighs in
The Richey court rejected the notion that “an employer may simply rely on an imprecisely worded and inconsistently applied company policy to terminate an employee on CFRA leave without adequately investigating and developing sufficient facts to establish the employee had actually engaged in misconduct warranting dismissal.”
A “part-time job does not conclusively establish an employee is ineligible for CFRA leave,” said the Richey court, citing the California Supreme Court finding in Lonicki v. Sutter Health Central, WL 919614 (Cal. 2008).
Justice Perluss said he found “little persuasive value” in two 7th U.S. Circuit Court analyses that adopted the honest belief defense in rendering their decisions for the employer. See abstracts and coverage of Kariotis v. Navistar Int’l Trans. Corp., 131 F.3d 672, 676 (7th Cir. 1997) and Scruggs v. Carrier Corp., 688 F.3d 821, 825-826 (7th Cir. 2012).
The purportedly equitable honest belief defense, he said, “relieves the employer of any obligation to establish its employee was, in fact, misusing authorized family leave and thus subverts the express statutory guarantee of the right to reinstatement.”
To read the rest of the article, complete with definitions and employer takeaways, see “Suspicion of FMLA Abuse Does Not Justify Firing, Says Court.”
Additional Resources
‘Honest Belief’ cases and analyses, covered by Thompson experts and staff
Leave Abuse and the Honest Belief Rule
Last Resort: Using Private Investigators to Combat FMLA Abuse
Facebook Photos Can Justify Suspicion of FMLA Abuse, Courts Rule
Employers Have Right to Fire If Reasons Unrelated to FMLA, Says Court
Honest Suspicion of FMLA Leave Misuse Justifies Firing, Courts Rule