Here’s one of the most common scenarios our employment lawyers face: An employee with marginal to poor performance goes out of work on FMLA leave (often prompted by stress or anxiety relating to review of their performance). While away, the employee’s manager discovers additional errors, unfinished work, or other performance issues that cause the manager to conclude that the employee should be terminated. However, human resources is hesitant to terminate the employee during leave due to concerns over potential legal claims. When can performance issues discovered as the result of an employee being out on leave allow the employer to terminate employment?
According to a recent decision by the Seventh Circuit Court of Appeals, if an employer can prove the existence of performance issues revealed before and during FMLA leave, the employer can take disciplinary action, and the employee must provide evidence that the leave was a factor in making this decision to avoid dismiss of the claim. In Anderson v. Nations Lending Corp., prior to taking leave, the employee had been counseled but not formally disciplined for numerous performance issues. During leave, her department discovered additional issues, some of which resulted in sanctions imposed by a governmental client. The employer initiated an investigation of these issues, and terminated the employee four days after she returned from FMLA leave.
The employee sued, claiming interference with her FMLA rights and retaliation. Her main evidence offered as proof of these claims were alleged statements by her manager that she had been out sick a lot, and that the department was understaffed as a result. The district court granted summary judgment to the employer, and the Seventh Circuit agreed, affirming dismissal of the claim.
The court said that there was no substantive evidence that the performance issues raised by the employer were a pretext to terminate her based on her taking FMLA leave. The employer did not need to take formal disciplinary action to demonstrate the existence of such issues before the plaintiff left on FMLA leave. Her manager’s alleged remarks did not overcome evidence of clear and serious performance issues that formed the basis for the termination decision.
Employers in similar situations should take caution before terminating employees on or just returning from FMLA leave. In this case, the employer was able to demonstrate evidence of performance issues before the employee’s serious health issues arose, the discovery of serious errors while she was out that led to real consequences to the business, and a thorough investigation of these issues before a termination decision was reached. In the absence of such clear evidence, employers may be better served by returning the employee from FMLA leave, and evaluating performance over a reasonable period of time before making a decision regarding continuing employment.
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