Ninth Circuit Finds Employer Has Burden of Proof When Denying Reinstatement After FMLA Leave
5/6/2011
In a case of first impression on a claim that an employer interfered with an
individual's exercise of her rights under the Family and Medical Leave Act
(FMLA), the Ninth Circuit Court of Appeals recently held that the employer
bears the burden of proving it had a legitimate reason for not reinstating the
employee to her former position following FMLA leave. The court further held
that the employee is not required to demonstrate that her employer lacked a
reasonable basis for its refusal to reinstate her. Sanders v. City of Newport
(9th Cir. March 17, 2011).
Background
Sanders, a former utility billing clerk who had worked for the City of Newport
for approximately 10 years, began suffering health problems after the City
moved her office to a new location and started using lower-grade billing
paper. After being diagnosed with "multiple chemical sensitivity" triggered by
handling low-grade paper at work and poor air quality in her work area,
Sanders requested and was granted one month of FMLA leave. This leave
was later extended because of an unrelated medical condition.
Subsequently, Sanders submitted a letter from her doctor stating that she
had recovered from her unrelated medical condition and she could return to
work, so long as she avoided use of the problem-causing low-grade paper.
Sanders also submitted a fitness for work certificate from the surgeon who
treated her unrelated medical condition.
On May 5, 2006, the City informed Sanders that she would not be permitted
to return to work because the City could not guarantee that her workplace
would be safe for her to due to her chemical sensitivity. On January 8, 2007,
the City sent Sanders a letter advising her that her employment would be
terminated that same day "due to the restrictions placed on [her] by [her]
physician, Dr. Morgan, which the City is unable to accommodate." Sanders
filed an administrative appeal. In response to her appeal, the City informed
her: "The decision to terminate your employment was made for the reason
that the City could not provide a safe workplace for you given your sensitivity
to chemicals and the lack of knowledge as to the chemicals or
concentrations that may cause a reaction."
Sanders subsequently sued the City in federal court, claiming violations of
the FMLA, the Americans with Disabilities Act (ADA) and the Oregon Family
Leave Act (OFLA), as well as other federal and state laws. After the jury
returned a verdict for the City on Sanders' FMLA claim, she filed an appeal
with the Ninth Circuit. Sanders argued that the court's FMLA jury instruction
improperly placed the burden on her to prove that she was denied
reinstatement without reasonable cause and that by adopting a reasonable
cause requirement, the court incorrectly stated the elements of her FMLA
claim.
The Ninth Circuit agreed with Sanders and reversed the lower court's
decision, remanding the case for a new trial.
FMLA Interference Claim
Under 29 U.S.C. §2615(a)(1), it is "unlawful for any employer to interfere
with, restrain, or deny the exercise of or the attempt to exercise" the
substantive rights guaranteed by FMLA. When a party alleges a violation of
§2615(a)(1), it is known as an "interference" or "entitlement" claim. The Ninth
Circuit held that the right to reinstatement is the linchpin of the entitlement
theory because "'the FMLA does not provide leave for leave's sake, but
instead provides leave with an expectation that an employee will return to
work after the leave ends.'" (Citations omitted). Thus, evidence that an
employer failed to reinstate an employee who was out on FMLA leave to her
original (or equivalent) position establishes a prima facie denial of the
employee's FMLA rights. See 29 C.F.R. §825.220(a)(1),(b)[1].
Citing decisions from the Sixth and Seventh Circuits, the Ninth Circuit
summarized the elements of an employee's prima facie case where the
employer fails to reinstate the employee: "the employee must establish that:
(1) he was eligible for the FMLA's protections, (2) his employer was covered
by the FMLA, (3) he was entitled to leave under the FMLA, (4) he provided
sufficient notice of his intent to take leave, and (5) his employer denied him
FMLA benefits to which he was entitled." The court also noted that in
interference claims, the employer's intent is irrelevant to a determination of
liability.
The court then held that although the FMLA creates a statutory right to
reinstatement after taking FMLA leave, this right is not without limits. The
court noted that the Department of Labor (DOL) has interpreted this part of
the statute in various regulations that set forth the limitations on an
employee's right to reinstatement. However, the DOL regulations do not
clearly state which party has the burden of the proof when an employer
defends against a denial of reinstatement by asserting one of these
limitations and the federal appeals courts are divided on this issue.
Burden of Proof for Failure to Reinstate
The regulation at issue in this case, 29 C.F.R. §825.214, addresses an
employee's right to return to work following FMLA leave and states that "if
the employee is unable to perform an essential function of the position
because of a physical or mental condition, including the continuation of a
serious health condition, the employee has no right to restoration to another
position under the FMLA." Although the text of this regulation is ambiguous
with respect to the parties' respective burdens, the Ninth Circuit held that it is
clear from other regulations that the burden rests with the employer to
establish whether the employee can perform the essential functions of the
job. Thus, the employer has the burden of showing that it had a legitimate
reason to deny the employee reinstatement and the trial court's contrary jury
instruction was erroneous.
The Ninth Circuit also held that the trial court erroneously instructed the jury
that Sanders was required to prove that the City did not have "reasonable
cause" to deny her reinstatement. The court noted that the DOL regulations
interpreting the limitations on an employer's obligation to reinstate an
employee include no reference to a "reasonable cause" standard. The Ninth
Circuit held that by adding a reasonable cause requirement as an element of
Sanders' reinstatement claim, the trial court's instruction permitted the jury to
assess the City's overall response to Sanders' complaints rather than
directing the jury to consider the specific reasons under DOL regulations
why the City refused to reinstate Sanders to her former position after taking
FMLA leave. The court held that this approach is contrary to the FMLA.
Further, the court held that this instruction was not harmless because it
added an unnecessary element to Sanders' burden of proving her FMLA
reinstatement claim.
Accordingly, the Ninth Circuit vacated the judgment on the jury's verdict and
remanded the case for a new trial.
What This Means for Employers
The effect of the court's decision in Sanders is that when an employer seeks
to establish that it had a legitimate reason to deny an employee
reinstatement, the employer must be prepared to prove the employee had
no right to be reinstated. This is true even though the right to reinstatement
from FMLA leave is not absolute. Unlike FMLA discrimination or retaliation
cases, which apply the type of burden shifting framework recognized in
McDonnell Douglas v. Green to evaluate such claims, employers in FMLA
interference and reinstatement cases are at a disadvantage in the Ninth
Circuit because they carry the ultimate burden of proof that the employee
was not entitled to reinstatement. Thus, employers considering discharging
an employee who has taken FMLA leave must ensure that the legitimate
business reason for the discharge is clear and adequately documented.
If you have any questions regarding this decision or the requirements of the
FMLA, please contact the author of this Alert, Angela M. Quiles,
aquiles@fordharrison.com, an attorney in our Los Angeles office, or the Ford
& Harrison attorney with whom you usually work.
[1] The DOL amended its FMLA regulations effective January 16, 2009;
however, the regulations discussed by the court were virtually unchanged in
substance. Because the events in this case took place prior to the effective
date of the amendments, the court cited the 2008 FMLA regulations.
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