Terminating an employee who's out onisn't impossible. If you can prove that you would have fired the employee if he or she had been at work, you can also fire the person while on leave.
The problem usually comes to light like this: An employee takes leave, and the employer hires a temp or moves a co-worker over to that position. The replacement discovers that the employee on leave wasn't doing her job. The danger: Firing the employee while he or she is on FMLA leave will spark a lawsuit.
The FMLA doesn't forbid you from firing people on leave. You're simply prohibited from firing them because they took leave. You can terminate them if you can prove that they weren't doing their jobs. You should also make sure that you handled other employees who made similar job mistakes in the same way.
Still, while you can fire employees on FMLA leave, it should be done rarely and only if you have rock-solid documentation. A better course of action: Produce documented and progressive evidence of the employee'sbefore he or she requests FMLA leave. Or, allow the employee to return and continue to document his or her shortcomings. That way, you'll prove that you based your decision on performance, not the leave.
Recent case: Sandra Throneberry worked as a nurse for 10 years, but her life fell apart after her divorce and her father's death. Her boss suggested that she take some time off, so she took FMLA leave. But Throneberry didn't stay home; she kept showing up at work, disrupting the workplace with emotional outbursts. Also, during her absence, the hospital where she worked discovered serious errors made by Thorneberry that cost it $40,000, so the hospital fired her.
She sued, alleging interference with, but lost. The 8th Circuit Court of Appeals ruled that the hospital could legally fire her during her FMLA leave because it proved that it would have made the same decision if Thorneberry had not been on leave. (Throneberry, et al., v. McGehee Desha County Hospital, No. 03-3822, 8th Cir., 2005)