Employer’s Failure to Designate Short-Term Disability Leave as FMLA Leave Does Not Entitle Employee to Additional Time Off
y decision dated September 6, 2001, the Honorable John G. Koetl of the Southern District of New York joined numerous other federal courts in refusing to enforce certain Department of Labor (“DOL”) regulations promulgated under the federal Family and Medical Leave Act (the “FMLA”). Fulham v. HSBC Bank USA, No. 99 Civ. 11054 (JGK), 2001 WL 1029051 (S.D.N.Y. Sept. 6, 2001).
Plaintiff Kevin Fulham was on short-term disability (“STD”) leave for 26 weeks as a result of the severe stress and depression he suffered after his adult son sustained serious injuries in a car accident. Following his STD leave, Fulham was placed on unpaid leave for several weeks, at which point his employer informed him that he was ineligible for FMLA leave because he had not worked 1,250 hours in the prior 12 months. Fulham’s employment was formally terminated shortly after his application for long-term disability benefits was approved.
Fulham sued under the FMLA, claiming that his employer’s failure to timely advise him of his ineligibility for FMLA leave barred the employer from challenging his eligibility for such leave. Fulham also claimed that he was entitled to additional unpaid leave pursuant to his employer’s leave policies. The employer moved for summary judgment, arguing that Fulham had received all of the leave he was entitled to under the FMLA, since he had taken 26 weeks of STD leave.
THE COURT’S DECISION
The Court granted the employer’s motion for summary judgment and dismissed the case. First, the Court noted that the FMLA itself requires employers to provide up to 12 weeks of unpaid leave to eligible employees, and it noted that Fulham had received 26 weeks of leave — well in excess of the statutory requirement. The Court also noted that the FMLA does not require employers to notify employees in advance that any given leave of absence will be considered FMLA leave.
The Court next turned its attention to the regulations adopted by the DOL to implement the FMLA. Specifically at issue in the case were 29 C.F.R. §§ 825.208 and 825.700, which require employers to notify employees in advance that FMLA leave runs currently with other types of leave permitted under the employer’s leave policies (e.g., STD leave). The regulations further state that an employer’s failure to designate leave as FMLA leave in advance precludes the employer from counting that leave of absence as FMLA leave:
If the employer has the requisite knowledge to make a determination that the paid leave is for an FMLA reason at the time the employee … commences leave and fails to designate the leave as FMLA leave (and so notify the employee…), the employer may not designate leave as FMLA retroactively, and may designate only prospectively as of the date of notification to the employee of the designation.
29 U.S.C. § 825.208(c). In other words, according to the regulations, an employer’s failure to timely designate leave as FMLA leave gives the employee the right to take an additional 12 weeks of leave.
Judge Koetl refused to enforce these regulations, noting that agency regulations are not entitled to controlling weight if they are “arbitrary, capricious, or manifestly contrary to the statute.” 2001 WL 1029051, at *4 (quoting Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844 (1984)). The regulations at issue are inconsistent with the FMLA, the Court found, insofar as the regulations purport to extend employees’ entitlement to federally-protected leave beyond the 12 weeks provided by the FMLA. The Court concluded, “to the extent that the DOL regulations … would entitle plaintiff to an additional 12 weeks of FMLA leave simply because the defendant failed to notify the plaintiff that the leave he unquestionably received, which was in excess of that required by the FMLA, was being designated FMLA leave, the DOL regulations are invalid.” 2001 WL 1029051, at *7.
In refusing to enforce these regulations, Judge Koetl joined several federal appellate courts, including the Eighth Circuit and the Eleventh Circuit Courts of Appeal. (See What’s New With The Family And Medical Leave Act?) Judge Koetl also relied on a recent decision by the Second Circuit Court of Appeals (Sarno v. Douglas Elliman-Gibbons & Ives, Inc., 183 F.3d 155 (2d Cir. 1999)), in which the Second Circuit affirmed the dismissal of an FMLA claim on grounds that the employee in question (whose employer had failed to inform him at the commencement of his leave that he was entitled to only 12 weeks of FMLA leave) was medically unable to return to work after 12 weeks, and therefore had received the substantive benefits he was entitled to under the FMLA.
Finally, Judge Koetl dismissed Plaintiff’s claim that his employer had violated the FMLA by failing to extend his leave of absence pursuant to its own leave policies. The Court concluded that employees do not have an independent cause of action under the FMLA for alleged violations of their employers’ leave policies.
While the Fulham decision is certainly welcome news for employers in the New York City area, the DOL regulations requiring advance designation of leave under the FMLA may be deemed enforceable by other courts within the Second Circuit and elsewhere. Until such time as those regulations are retracted by the DOL or struck down by the U.S. Supreme Court, prudent employers will endeavor to timely designate leave as FMLA leave where appropriate. Employers that fail to do so may well face claims that they have effectively extended employees’ entitlement to leave by 12 weeks.