Under 50 employees? How FMLA could apply to you regardless
Under the FMLA, only employers that have 50 or more employees within 75 miles of the company’s work site are required to provide FMLA leave to their employees. The requirement is commonly known as the “50/75 rule.”
Can an employer that has fewer than 50 employees within 75 miles of the company’s work site willingly agree to provide its employees with FMLA rights and benefits? That situation occurred in Reaux v. Infohealth Management Corp.
In Reaux, a federal court in Illinois ruled that employers that are not otherwise required to provide FMLA leave could wind up subjecting themselves to the FMLA by promising such leave.
By the book
Infohealth Management Corp. was not obligated to provide FMLA leave to its employees because it did not satisfy the 50/75 rule.
However, Infohealth’s employee handbook, which employees received at the time of hire, contained a provision explaining that all employees could take FMLA leave for a serious health condition, provided that they satisfied the FMLA employee eligibility requirements.
Like the federal law, Infohealth’s provision required that employees must have worked for the company for a total of at least 12 months and had worked a minimum of 1,250 hours over the previous 12 months to be eligible for leave.
Out on leave, then fired
Like all other Infohealth employees, Deborah Reaux, an administrative assistant, received a copy of the employee handbook when she began working for the company. Reaux became pregnant and requested maternity leave by filling out the requisite paperwork. Her supervisors assured her that she could take “FMLA leave,” and she did once her child was born on Aug. 1, 2006.
She was due to return to work on Sept. 11, 2006. For unspecified reasons, Infohealth terminated her employment on Sept. 7, 2006.
Reaux filed suit against Infohealth in federal court, alleging that the company had violated the FMLA by terminating her while she was on job-protected leave.
The company moved to dismiss the suit, arguing that under the 50/75 rule, Reaux was not an “eligible employee” and thus was not on a job-protected leave. Infohealth also argued that the handbook contained an at-will employment disclaimer that gave the company the power to terminate its employees at any time and for any reason.
The judge disagreed with Infohealth’s position, noting that the 7th Circuit had indicated that, in appropriate cases, “equitable estoppel” may be used to prevent an employer from asserting a statutory defense to FMLA eligibility.
Because “Infohealth allegedly told Reaux she could take FMLA leave, Reaux did so, and was fired while she was still on leave,” the court held that Infohealth was “equitably estopped” from raising the 50/75 rule as a statutory defense.
The judge further disagreed with Infohealth’s position that Reaux could not have reasonably relied on the written and oral assurances about her eligibility for FMLA leave merely because of the at-will language in the employee handbook.
Indeed, the court reasoned that Infohealth’s position was “at odds with the well-established rule that regardless of whether an employee may be terminated ‘at will,’ the FMLA ‘prohibits an employer from interfering with an employee’s attempt to exercise her right to medical leave.’”
Accordingly, Infohealth’s motion to dismiss was denied in its entirety.
What employers can do
When drafting and applying their time off, leave and other employment policies, employers should be careful not to inadvertently subject themselves to various obligations under the FMLA and other employment laws to which they are otherwise not covered.
At least in this case, a court has made clear that employers that voluntarily offer their employees benefits that they are not otherwise entitled to receive cannot later defend a claim of unlawful termination by arguing that their employees were not eligible or entitled to such benefits.
According to Reaux v. Infohealth Management Corp., an employer’s voluntary, good-faith decision to provide its employees with a benefit can later land the employer in hot water.