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FMLA trap to avoid: Dodging the coverage-by-estoppel bullet

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in Employment Law,FMLA Guidelines,Human Resources

Employers have to meet thresholds before they’re required to comply with most statutes. For example, the FMLA applies only to organizations that employ 50 or more employees within 75 miles.

But smaller employers can effectively render themselves covered by the FMLA if they make certain representations about FMLA coverage to their employees. If they say the FMLA applies, then it does. That’s commonly referred to as coverage-by-estoppel.

In Dobrowski v. Jay Dee Contractors, the 6th Circuit illustrated the dangers posed by coverage-by-estoppel. Even though Jay Dee had fewer than 50 employees and was not covered by the FMLA, when Daniel Dobrowski needed time off for surgery, Jay Dee’s president provided him a form titled “Application for Leave of Absence under the FMLA.”

Jay Dee dodged the estoppel bullet, but it was a close call.

Signed, sealed … delivered?

Before Dobrowski took leave, the company president sent him a letter approving the time off and stating, “[p]ursuant to the Family and Medical Leave Act, Jay Dee Contractors, Inc. will leave [Dobrowski’s] position open for at least twelve (12) weeks from October 18, 2004.” Enclosed with the letter was a Department of Labor document certifying his FMLA leave.

When Jay Dee terminated Dobrowski at the end of his leave, he filed suit under the FMLA.

Despite Jay Dee’s representations, the 6th Circuit affirmed the district court’s dismissal of Dobrowski’s FMLA claim. The court recognized that, even though Jay Dee was too small to be covered by the FMLA, it could estop itself into coverage if Dobrowski could show a:

  1. Definite misrepresentation as to a material fact
  2. Reasonable reliance on the misrepresentation, and
  3. Resulting detriment to the party reasonably relying on the misrepresentation.

The court found Dobrowski’s FMLA claim lacking on the second element—reasonable reliance. It wrote:

“There is no evidence in the record to show that he “change[d] his position” in reliance on the belief that his leave would be FMLA-protected…. Had he relied on the erroneous representations, one would expect Dobrowski to be able to point to some action or statement that indicated that his decision to have the surgery was contingent on his understanding of his FMLA status; or perhaps evidence that raises an inference of such contingency—for example, a record that he made an inquiry as to his rights, asked for written confirmation of his leave arrangement, or changed his behavior after being told he was eligible….”

A different result

The court indicated that its result might have been different if, for example, Dobrowski had “remained on leave beyond his FMLA period after receiving written assurance from his employer that his extended leave would be covered.” But, in the court’s view, “the question is not whether Dobrowski acted in conformity with the FMLA … but whether he changed his behavior in reliance on the Act.”

That was the case in Peters v. Gilead Sciences, in which the 7th Circuit enforced the FMLA against a small employer that had an FMLA policy in its employee handbook, even though the statute did not cover it or its employees.

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