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May 9, 2002
Under the Family and Medical Leave Act (FMLA), qualified employees are
entitled to a total of 12 workweeks annually of unpaid FMLA leave following
certain events: a disabling health problem; a family member’s serious illness;
or the arrival of a new son or daughter. 29 U.S.C. Section
2612(a)(1). When the FMLA was enacted, Congress directed the Department of
Labor to issue regulations necessary to carry out the Act. The regulations
include provisions requiring employers to give employees written notice that an
absence will be considered FMLA leave, and detailed information concerning the
employees’ rights and responsibilities under the Act. 29 C.F.R. Sections
825.208(a) and 825.301(c). A separate regulation penalizes employers who
breach these notice requirements. This regulation, 29 C.F.R. Section
825.700(a), provides:
If an employee takes paid or
unpaid leave and the employer does
not designate the leave as FMLA leave, the
leave taken does not
count against an employee’s FMLA
entitlement.
On March 19 of this year, in a 5-4
decision, the U.S. Supreme Court ruled that this regulation is contrary to the
FMLA and invalid. Ragsdale v. Wolverine World Wide
Inc., 122 S. Ct. 1155 (2002).
Tracy Ragsdale, the Plaintiff in this
case, was diagnosed with Hodgkins disease while an employee of Wolverine World
Wide, Inc. Her prescribed treatment involved surgery and months of
radiation therapy. She was eligible for seven months of unpaid sick leave
under Wolverine’s leave plan. Wolverine granted her requests for a leave
of absence, and Ragsdale missed 30 consecutive weeks of work. Wolverine
held open her position and maintained her health benefits throughout this entire
30 week period. However, it did not notify Ragsdale that 12 weeks of the
absence would count as FMLA leave.
When Ragsdale sought an additional
extension of her leave of absence, Wolverine advised her that she had exhausted
her seven months under the company plan. The company terminated her when
she did not return to work. She sued, relying on Section 825.700(a), and
claiming that because Wolverine had failed to designate her leave as
FMLA-qualifying, the 30 weeks of leave did not count against her FMLA
entitlement, and that therefore she was entitled to another 12 weeks of
leave.
The U.S. District Court for the Eastern District of Arkansas granted
Wolverine summary judgment on Ragsdale’s claim, finding the regulation to be
invalid because it required Wolverine to grant Ragsdale more than 12 weeks of
FMLA leave in one year. The Eighth Circuit Court of Appeals agreed.
The U.S. Supreme Court affirmed the decision of the Eighth Circuit Court of
Appeals. It noted that Section 825.700(a) punishes employers who fail to
provide timely notice of the FMLA designation by denying them any credit for
leave granted, regardless of whether an employee suffers any prejudice as a
result of the lack of notice. Calling the regulation a “categorical
penalty” that is incompatible with the “FMLA’s comprehensive remedial
mechanism,” the Court struck it down as an invalid exercise of DOL’s discretion
to promulgate regulations.
This decision is a clear victory for
employers. Now, if an employer fails to designate leave as FMLA leave, in
most cases, and absent any showing of prejudice to the employee, it may still
count the leave taken against the 12-week FMLA entitlement. However,
employers should continue to provide employees written notice of their rights
and obligations under the FMLA and notice that an absence is FMLA
qualifying. Although the Court struck down the provision in Section
825.700(a) that categorically penalizes employers for failing to designate an
absence as FMLA leave, it did not invalidate the notice requirements set forth
in the regulations. In fact, the Court expressly noted its decision did
not address the validity of these notice provisions.
Further, the Court based its decision that the regulation is invalid, at
least in part, on its finding that the regulation relieves employees of the
burden of proving any real impairment of their rights or any resulting
prejudice. Thus, the decision does not necessarily eliminate an employee's
right to pursue a legitimate claim that a failure to designate leave as FMLA
qualifying somehow constituted an interference with, or denial or restraint of
an employee’s FMLA rights.
Finally, it is sound practice to apprise employees of their rights and
obligations as employees, even absent a statutory or regulatory provision
imposing a penalty on employers who fail to do so.
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