Seyfarth Synopsis: The U.S. Court of Appeals for the Ninth Circuit recently became the seventh federal appellate court to hold that the standard for “willful” violations under the Family and Medical Leave Act is whether the employer knows or shows reckless disregard for whether its conduct violates the FMLA.
The Ninth Circuit’s decision in Olson v. United States, 980 F.3d 1334 (9th Cir. 2020) is the most recent case to hold that the standard for “willful” violations under the Family and Medical Leave Act is whether the employer knows or shows reckless disregard for whether its conduct violates the FMLA. Six of the other twelve federal circuit courts have reached the same conclusion, so Olson ushers a majority rule and signals a growing consensus.
Olson is noteworthy not only because it clarifies the FMLA’s contours but also because it provides an illustration of what actions weigh against a finding of willfulness.
Background for Olson
Andrea Olson provided consulting services to the Bonneville Power Administration via a third-party administrator. She suffered from anxiety and eventually went on leave under the FMLA. BPA did not provide Olson notice of her FMLA rights.
About a month into the leave, BPA considered terminating Olson’s services because there was no expected date for return, but it ultimately decided not to do so after consulting with its legal department. Also, during the leave, Olson billed BPA for several hours of work, which BPA paid.
After about three months of leave, BPA agreed to let Olson telework more and offered a trial work period, which she interpreted to include training her own replacement. Olson rejected the offer and never returned to work.
Olson sued BPA under the FMLA, arguing that BPA willfully interfered with her FMLA rights by failing to provide her notice of them. Relief is available for failure to notify only if the employee has been prejudiced. Following a bench trial, the trial court found in BPA’s favor – specifically, that BPA’s failure to notify was not willful.
Ninth Circuit: FLSA Standard for “Willfulness” Applies to FMLA Context
On appeal, Olson argued that the trial court failed to consider how BPA’s failure to notify prejudiced her.
The Ninth Circuit panel affirmed judgment for BPA, without addressing the issue of prejudice, on the basis that the trial court did not err in finding that BPA’s failure to notify was not willful. While noting that the FMLA does not define “willful,” the Court joined six other circuits (the First, Second, Sixth, Seventh, Eighth, and Tenth Circuits) in holding that the standard for willfulness under the Fair Labor Standards Act, articulated in McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988), also applies to FMLA claims. Under that standard, a violation is “willful” if the employer knows, or shows reckless disregard for whether, its conduct violates the FMLA.
Accordingly, the Ninth Circuit held that the trial court did not clearly err in finding that BPA’s violation was not willful. In reaching this conclusion, the Ninth Circuit indicated that three facts – BPA’s decision to consult with its legal department; BPA’s attempts to bring Olson back to work, and BPA’s payment of her billed hours during leave – weighed against a finding of willfulness. It also called into doubt whether BPA was even Olson’s primary (as opposed to secondary) employer under the FMLA, such that it may not have owed a duty to provide notice in the first place. The existence of that legitimate question was yet another factor that weighed against a finding of willfulness.
There are several takeaways from Olson:
- West Coast employers now have clear guidance on what constitutes “willful” violations of the FMLA.
- All seven federal appellate courts that have addressed the standard for “willfulness” under the FMLA have adopted the FLSA standard. This majority rule becomes even more persuasive in absence of any contrary authority.
- Good faith and due diligence – such as consulting with legal counsel or engaging in the interactive process – appear to be factors that weigh against a finding of willfulness.