Employers Not Covered by FMLA May be Obligated to Follow FMLA Based on Handbook Provisions

By: Elaina Smiley, Esquire es@muslaw.com

Does your company have a Family and Medical Leave Act (“FMLA”) policy when you do not have 50 or more employees? If you do, you may be at risk for giving your employees rights under FMLA that your company would not otherwise be obligated to follow. Typically, FMLA applies only to employers who employ at least 50 employees within a 75 mile radius. An employee can be eligible for FMLA if he or she has worked for a Company for a total of 12 months and for at least 1,250 hours in the previous 12 months.

In a recent decision issued on March 10, 2009, Reaux v. Infohealth Management filed in the Northern District of Illinois, the Court denied an employer’s motion to dismiss an employee’s FMLA claim because of promises that were made to its employees in a handbook. In the case, both parties admitted that the employer did not have 50 or more employees in a 75 mile radius. However, the Plaintiff argued that the employer was estopped from denying her FMLA leave based on provisions contained in the handbook. The handbook contained a FMLA policy that defined "eligible employees" as those having worked for the company for at least 12 months and 1,250 hours during the 12 months preceding the leave. The policy promised that eligible employees "shall be entitled" to FMLA leave for the birth of a child. In addition, the employee’s supervisor told her that she would be “entitled” to leave if she filled out the FMLA paperwork. The employee completed the necessary paperwork, took leave for the birth of her child and was fired a few days prior to the expiration of her 12 weeks of approved leave. The policy did not contain a provision that stated that FMLA coverage was only applicable to those employees who worked at a location with 50 or more employees in a 75 mile radius. The court permitted the employee to proceed on her FMLA claim.

Although this case is not precedential in Pennsylvania, employers should be very cautious in how they draft their handbooks and policies. Giving employees rights under FMLA means that the company may be obligated to hold open the employee’s position for 12 weeks while the employee is on leave and be obligated to restore an employee to his or her original job, or to an equivalent job with equivalent pay, benefits, and other terms and conditions of employment. Furthermore, employers could bind themselves to other provisions of FMLA such as providing intermittent leave in accordance with the Act and providing group health plan insurance to employees on leave. Employers should review their handbooks to ensure that their policies are not creating unintended consequences and are in compliance with current changes to employment laws.