Can An Indefinite Leave Of Absence Be A Reasonable Accommodation?

by Franczek Radelet P.C.
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How much is enough.jpgOne of the most difficult issues an HR professional or in-house employment counsel faces is how to deal with an employee who cannot return to work after FMLA leave expires. Is additional leave required?  What law applies and what are the obligations for an employer in this situation?  

Despite the uncertainty of what additional leave the ADA obligates employers to provide, one general rule has always been clear -- an employer is never required to provide an employee an indefinite leave of absence.  

Never?  After a decision handed down by New York's highest state court last month, even this general rule has been called into question.

The Facts and Court Ruling

Giuseppe, a bank executive for Intesa Sanpaolo, took leave for a number of medical issues, including major depression.  After he had been on leave for almost five months, Intesa contacted him to inquire whether he intended to return to work or abandon his position. Giuseppe's attorney responded that Giuseppe:

has not at any time evinced or expressed an intention to 'abandon his position.' Rather, he has been sick and unable to work, with an uncertain prognosis and a return to work date that is indeterminate at this time.

Intesa responded by terminating Giuseppe's employment.

When Giuseppe later brought suit aleging violations of New York state and New York City law, the employer appropriately argued that Giuseppe requested an indefinite leave, which of course is not a reasonable accommodation under any law.  Or is it?

In a blow to employers everywhere, the court held that NYC law shifted the burden of proof from to the employer to show that the accommodation requested by Giuseppe would impose an undue hardship on the bank.  In other words, at least in New York City, there is no accommodation — indefinite leave or otherwise — that is categorically excluded as a reasonable accommodation under the NYC law.  In refusing to dismiss the case, the court erased a bright-line rule that an indefinite leave of absence is not required and replaced it with a more obscure standard that indefinite leave will be required unless the employer can show either: 1) that the employee could not, with reasonable accommodation, satisfy the essential functions of the job; or 2) that the accommodation would result in an undue hardship on the company.  Romanello v. Intesa Sanpaolo (pdf)

Insights for Employers 

Giuseppe's case should be an eye opener for employers.  At a minimum, it reminds us of our obligation to keep the interactive process alive and to establish undue hardship earlier in the discussion.  Intesa would have been in better shape if it had adhered to a few key principles:

  1. Engage your employee in the interactive process.  Intesa started the conversation off right by engaging the employee about his return to work.  But after learning that Giuseppe's prognosis was uncertain, it ended the conversation. Not a good move, since there is plenty more to find out and discuss: What limitations does the employee have? What functions can he/can't he perform? Are there any alternative modifications we can make to his job to help him get back to work? Have we discussed restructuring his position or temporarily relocating the employee to an open position in which he is qualified (until he's able to return to his original position)?  Also, employers should require that their employee provide a report from their treating physician responding to these inquiries.
  2. Conduct an undue hardship analysis and use this information in the interactive process. Before putting up a fight over whether to provide additional leave and how much to give, doesn't it make sense first to analyze the impact the employee's absence is having on your operations?  If it's not impacting your operations, that should be a key factor in granting additional leave.  However, if it's is impacting operations, you want to memorialize this earlier in the process.  In Intesa's case, Giuseppe was an executive.  Therefore, it likely would not have been difficult to establish that his continued and "indeterminate" absence was wreaking havoc on the bank's operations -- for example, projects likely were being pushed off, decisions were being made by less capable employees, customer service was adversely affected by the downgrade in service, other managers were required to take on more work.  See my list of “undue hardship” questions to consider in one of my previous posts.  Once you have conducted this analysis, tell the employee about it.  Both in person (if possible) and in follow-up correspondence, tell the employee (tactfully and with empathy to his situation) the difficult position you’re in – that x, y, and z are occurring as a result of his absence – and, as a result, it is critical that you obtain a reasonable estimate of when he will be able to resume all essential functions of his employment so that you can better assess whether leave can be provided as a reasonable accommodation.  That’s what the employer did in a previous situation I wrote about, and the court endorsed the employer’s actions.
  3. Regardless of what state you're in, you should maintain the same approach.  This case serves as a reminder that, depending on where your business is located, state or local law may exact even more stringent requirements than the ADA. However, your approach should remain the same, regardless of where you are. Communicate with your employee, engage them in the interactive process, and identify hardships early on so you can articulate them to your employee and make a more reasoned decision.

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Franczek Radelet P.C.
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