by Patrick M. Gavin¹

I. Introduction

The FMLA contains what appears to be a "bright line" leave entitlement. An eligible employee is entitled to 12 weeks of unpaid leave. As discussed below, however, conflicting implementing regulations and a few court decisions have muddied the 12-week rule. Thus, it is imperative for attorneys to understand the pitfalls created by recent decisions.

II. The FMLA

When it was enacted in 1993, the FMLA was based on a very simple and sensible concept – an eligible employee should not lose employment due to a need to be off work for a limited period of time in order to attend to serious family or medical issues.³ In fact, the drafters of the FMLA expressed this common sense purpose – "to balance the demands of the workplace with the needs of families" – by allowing employees to take "reasonable leave" for medical or other enumerated qualifying reasons.⁴ To accomplish this goal, the FMLA requires covered employers to provide up to 12 weeks of unpaid leave to an eligible employee who has a FMLA qualifying reason, such as to care for a child after birth, adoption or placement for foster care, an employee's own serious health condition, or to care for a child, spouse or parent with a serious health condition.⁵ In addition, in most instances an employer must restore an employee returning from FMLA leave to the same or an equivalent position.⁶ If an employer violates the FMLA, it may be held liable for lost wages and employment benefits, liquidated damages, interest, attorney's fees, and equitable relief such as reinstatement.⁷

Congress, however, left unresolved many practical questions about implementing the day-to-day realities of the FMLA. The Department of Labor ("DOL") has attempted to fill in the gaps in the statute with regulations.⁸

III. Implementing Regulations

Under the FMLA, the Secretary of Labor was empowered to prescribe regulations necessary to carry out the purposes of the act.⁹ Pursuant to that statutory grant of authority, the Secretary of Labor promulgated a plethora of complex and often confusing, if not outright conflicting, regulations to implement the simple purposes of the FMLA. Included within the DOL regulations are provisions requiring the employer to designate leave as FMLA-qualifying leave in order to count such leave against the 12-week statutory entitlement. Without explanation or justification, the regulations give the employer a mere two days to make this designation.¹⁰

More significantly, failure to notify an employee that certain leave has been designated as FMLA leave will result in the employee retaining the entire 12-week FMLA leave entitlement.¹¹ In other words, under a literal application of the FMLA implementing regulations, if an employer failed to properly designate leave as FMLA leave, an employee would be entitled to receive more than the statutory 12 weeks of leave that otherwise would have qualified for protection under the FMLA.

The DOL's expansion of the FMLA statutory leave entitlement invited a judicial challenge.

IV. The Eighth Circuit

A judicial challenge to the DOL's regulations was all but inevitable given the obvious conflict between the 12-week statutory maximum and the impermissible extension thereto by the regulations. Not surprisingly, courts soon began to strike down the regulations as an invalid exercise of agency authority.¹²

The Eighth Circuit weighed in on this issue in Ragsdale v. Wolverine Worldwide, Inc.¹³ Ms. Ragsdale "was diagnosed with cancer in February 1996 and [, accordingly,] requested [a] medical leave" of absence from her employer, which began on February21, 1996. The company's "leave policy allowed employees with six months of service to take leave for up to seven months." Under the policy, employees were to submit requests for extensions at 30-day intervals. Ms. Ragsdale requested six such extensions. The company granted each request. However, the company did not notify Ms. Ragsdale that her leave was designated as FMLA leave.¹⁴

When Ms. Ragsdale exhausted her seven months of company-provided leave and was still unable to return to work, her employment was terminated. At that point, Ms. Ragsdale requested additional FMLA leave, but was informed that all of her requested available leave, including FMLA leave, had been utilized. Thereafter, Ms. Ragsdale filed suit alleging claims under the FMLA, ADA and Arkansas law. The district court granted summary judgment to the employer on the FMLA claim, finding that §§ 825.208(c) and 825.700(a) of the DOL regulations were based on an erroneous and impermissible interpretation of FMLA. Ms. Ragsdale appealed, placing the issue squarely in front of the Eighth Circuit.

The Eighth Circuit reviewed the regulations and acknowledged the split of authority in the appeals courts. Ultimately, the Eighth Circuit agreed with the Eleventh Circuit that § 825.700(a) of the DOL regulations was improper "insofar as it purports to require an employer to provide more than twelve weeks of leave time."¹⁵ In doing so, the Eighth Circuit stated, "Under the FMLA, twelve weeks of leave is both the minimum the employer must provide and the maximum that the statute requires."¹⁶ The Eighth Circuit concluded that "[t]he DOL regulations must be struck down."¹⁷ Thus, in its Ragsdale decision, the Eighth Circuit limited the amount of FMLA leave to 12 weeks provided in the statute, although Ms. Ragsdale actually was off work for 30 weeks under the company's more generous leave policy. In essence, Ragsdale appeared to restore the FMLA leave entitlement to its intended 12-week maximum.

V. The United States Supreme Court

The dispute over DOL regulation § 825.700(a) soon rose to the United States Supreme Court when it granted certiorari in Ragsdale.¹⁸ In a 5-4 decision, the Supreme Court decided that the secretary's penalty of extending the amount of leave beyond the 12-week statutory maximum was disproportionate and inconsistent with Congress' intent, and held that §825.700(a) of the regulations was an impermissible alteration of the statutory framework. Significantly, the Supreme Court stated, "The FMLA guaranteed Ragsdale 12 — not 42 — weeks of leave in 1996."¹⁹

The United States Supreme Court decision upholding Ragsdale appeared to have resolved any question about the maximum amount of leave available under the FMLA. An employee was entitled to no more than 12 weeks of FMLA leave, regardless of the employer's paperwork documenting that leave. For a brief period, the FMLA waters had receded to their original 12-week contours.²⁰

VI. Post-Ragsdale

Any comfort employers found in the apparent certainty of the Ragsdale decision was short-lived. In Duty v. Norton-Alcoa Proppants, the Eighth Circuit upheld a jury verdict of $305,000 based in part on a FMLA claim.²¹ Duty claimed that he was entitled to job restoration pursuant to the FMLA at the end of a 34-week leave. Relying on Ragsdale, the employer argued that Duty was only entitled to 12 weeks of FMLA protected leave and sought judgment as a matter of law.²² The Eighth Circuit squarely rejected this argument. In affirming the district court's denial of the employer's motion for judgment as a matter of law, the Eighth Circuit noted that the employer had sent a letter designating additional time after the expiration of the first 12 weeks of FMLA leave. The Eighth Circuit also noted that the company had a short-term disability leave policy that was "intermingled" with Duty's FMLA leave.²³ In light of these circumstances, the Eighth Circuit felt Duty may have believed he was entitled to more than 12 weeks of FMLA leave based on the letters and short-term disability policy.²⁴ Thus, the Eighth Circuit applied equitable estoppel principles and precluded the employer's defense that Duty had exhausted his 12-week leave entitlement under the FMLA.

It does not appear that other circuit courts of appeal have addressed arguments based on equitable estoppel after Ragsdale and Duty. As noted, prior to Ragsdale, the Sixth Circuit appeared to have endorsed the Secretary of Labor's regulation affording an employee more than 12 weeks of leave.²⁵ At least one district court has applied the equitable estoppel principles discussed in Duty to a question of FMLA eligibility.²⁶

Once more the FMLA waters turned muddy and apparently rose beyond the 12-week levee created by Congress and confirmed by the Ragsdale decision.

VII. Conclusion

Like the famous "Muddy Missouri" River that winds its way through our beloved "Show Me" state, it is unclear where the Ragsdale-Duty progeny will travel next. On the one hand, Ragsdale limits FMLA protection to the express 12-week maximum intended by Congress, even if an employer's policy provides for more leave time. On the other hand, Duty suggests that affirmative mis-representation to an employee may extend the amount of FMLA-protected leave beyond 12 weeks. Until a new regulation is issued, only time (and further judicial guidance) will definitively outline the river banks of the FMLA leave entitlement.

In the meantime, there are a few practical considerations. First, the apparent willingness of courts to strike down the FMLA's regulations or, alternatively, to apply equitable doctrines to skirt around otherwise plain statutory limits, strongly suggest that the FMLA has quickly been transformed from a simple leave law to a rather complex statutory and regulatory scheme requiring more than a casual awareness by attorneys. Therefore, it is imperative to remain vigilant as the contours of the FMLA continue to develop. As is often the case with "bright line" rules, Duty emphasizes the risk of falling into any false sense of security created by the Ragsdale decision. What appears bright and clear today may simply not hold water tomorrow.

Second, these developments suggest a need for ongoing review and revision of FMLA policies and documentation. In doing so, the goal should be to send a clear and consistent message to employees concerning eligibility and duration of FMLA-protected leave.

Finally, in analyzing eligibility issues in particular settings, it is important to assess any representations about eligibility or length of leave. Obviously, it is preferable to make this assessment before any adverse action is taken concerning FMLA leave. While these considerations do not resolve the questions raised in the wake of Duty, they may help navigate a course to calmer waters until those questions are answered by the legislature, the courts or an administrative agency.

Footnotes

¹ Mr. Gavin is a member of Lathrop & Gage L.C. He graduated with distinction from the University of Missouri-Kansas City School of Law and is also a graduate of the United States Military Academy at West Point.

² 29 U.S.C. §§ 2601 et seq.

³ Generally, an "eligible employee" is one who has worked 1,250 hours in the previous 12 months and who has worked at least 12 months with the employer. 29 U.S.C. § 2611(2)(A)-(B). An "employer" is one who employs at least 50 employees for each working day during each of 20 or more calendar work weeks. Id at 2611(4)(A).

⁴ 29 U.S.C. § 2601(b)(1) - (2).

⁵ 29 U.S.C. § 2612(a).

⁶ 29 U.S.C. § 2614.

⁷ 29 U.S.C. § 2617.

⁸29 C.F.R. §§ 825.100 et seq.

⁹ 29 U.S.C. § 2654.

¹⁰ 29 C.F.R. § 825.208(c); 29 C.F.R. § 825.700(a).

¹¹ Id.

¹² See e.g., McGregor v. AUTOZONE, Inc., 180 F.3d 1305 (11th Cir. 1999); Schloer v. Lucent Tech., 2000 WL 128698 (D. Md. 2000); Neil v. Children's Habilitation Ctr., 1999 WL 706117 (N.D. Ill. 1999). But see Plant v. Morton Int'l, Inc., 212 F.3d 929 (6th Cir. 2000) (appearing to uphold regulations). In addition, regulations affording eligibility to otherwise ineligible employees have been invalidated. Dormeyer v. Comerica Bank-Illinois, 223 F.3d 579 (7th Cir. 2000).

¹³ 218 F.3d 933 (8th Cir. 2000).

¹⁴ Id. at 934.

¹⁵ Id. at 940.

¹⁶ Id. At 937 (emphasis added).

¹⁷ Id. at 939.

¹⁸ Ragsdale v. Wolverine World Wide, Inc., 535 U.S. 81 (2002).

¹⁹ Id.

²⁰ The Supreme Court, however, did not decide what would be an appropriate "penalty" for an employer's failure to notify an employee of its designation of leave as FMLA leave. DOL guidance should be forthcoming.

²¹ 293 F.3d 481 (8th Cir. 2002).

²² Id. at 493-94.

²³ Id. at 494.

²⁴ Id.

²⁵ See note 11 above.

²⁶ See Rocha v. Sauder Woodworking Co., 221 F. Supp. 2d 818, 820 (N. D. Ohio 2002) (finding that promissory estoppel did not preclude employer from challenging employee's eligibility for FMLA leave where there was no evidence that employer's failure to inform employee of her ineligibility was intentional or in bad faith).