You can place some conditions on employees’ FMLA leave
While you can't base firing decisions on an employee's decision to take Family and Medical Leave Act (FMLA) leave, that doesn't mean you're powerless to act against employees who flaunt your company rules while on leave.
You can take action against employees for legitimate, nondiscriminatory reasons, even while they're on FMLA leave. Just make sure you exhibit clear and consistent documentation of the misconduct. And, as the following case shows, signing a "last-chance agreement" with the employee will dramatically reduce the chance that your actions will be perceived as discriminatory.
Recent case: After being found drunk and semiconscious at work, a nurse took FMLA leave to undergo substance-abuse treatment. The hospital allowed this, instead of firing her outright for misconduct, but set one condition on her continued employment: She must submit weekly progress reports on her condition. When the reports didn't materialize, the hospital fired her.
The nurse sued but lost. The court said employees can be fired while on FMLA leave "as long as the taking of the FMLA leave was not the cause for the termination." Asking for progress reports didn't violate the law. (Geromanos v. Columbia University, No. 02 CIV.7181, S.D.N.Y., 2004)