May Ineligible Employees Claim Rights to FMLA Leave?

by Parker Poe Adams & Bernstein LLP
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Parker Poe Adams & Bernstein LLP

The Family and Medical Leave Act does not apply to all employers or even all employees within a covered company. For example, if the employee works at a location with fewer than 50 employees within a 75-mile radius, that employee is not eligible for FMLA leave, even though an identically situated co-worker at a larger facility can claim full leave rights. Some employers deal with this distinction in their FMLA policy, making clear that their FMLA programs only apply to employees at certain locations. However, most companies do not draw this distinction, probably because it would create employee relations problems among workers who view the difference in benefits as unfair.

What happens, then, when an employee at an ineligible location sues the employer claiming violation of their FMLA rights? Federal courts have been consistent in holding that the FMLA policy cannot convey rights to employees who are ineligible for leave under the statute. In other words, the employer’s failure to exclude these employees from the FMLA policy does not mean that they can be found liable for later violating the employees’ rights under that law.

Faced with this reality, ineligible employees denied FMLA rights have taken a different approach. Instead of making FMLA claims, they file an estoppel claim that basically seeks to enforce FMLA rights through an argument that the employee relied on the employer’s promise that it would provide leave benefits. A good example of this estoppel argument can be found in a 2016 Third Circuit Court of Appeals case, Palan v. Inovio Pharmaceuticals, Inc. In this case, the employee claimed that the employer could not deny FMLA rights on the basis of the plaintiff’s ineligibility because he relied on the policy’s promise of leave benefits to his detriment.

The district court found that the plaintiff had met all elements for the estoppel claim:  misrepresentation, reasonable reliance, and a detrimental outcome. On appeal, the Third Circuit reversed this finding, concluding that there was insufficient evidence that the plaintiff actually read the FMLA policy or missed work in reliance on its language.

Although the employer prevailed in this case, given the right set of facts, an employee could prevail on an FMLA estoppel argument. How can employers avoid this outcome? 

If they truly want to create two sets of leave policies depending on the employee’s location, the FMLA policy can clearly state that it only applies to persons at the larger, eligible facilities. Employers that want to provide equivalent leave to smaller locations could modify the policy to make clear that statutory FMLA rights only apply to eligible employees, and that the equivalent leave and reinstatement provided to other persons are discretionary in nature. Given the possible employee relations fallout from even this distinction, many employers may choose not to make it and simply operate under the assumption that it will accept potential liability from claims made by employees not otherwise legally eligible for FMLA leave.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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