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Thursday, August 7, 2008

Will the Healthy Families Act prohibit fraud?

A commenter took me to task for yesterday's post, in which I argued that under the proposed Healthy Families Act employees committing fraud by taking illegitimate time off work could hide behind the law to protect their jobs. To support his/her point, the commenter relied upon Vail v. Raybestos Products Co., an FMLA decision out of the 7th Circuit.

In that case, Diana Vail was terminated while out on FMLA leave. Vail claimed to suffer from migraine headaches, that would come upon her shortly before her scheduled shift at Raybestos. Between May and September 2005, she took more than 33 days of approved leave. Her supervisor became suspicious, hired an off-duty cop to tail her, discovered that she was helping her husband's lawn mowing business while on FMLA leave, and terminated her. The Court correctly rejected her FMLA interference claim:

An employer can defeat an interference claim by showing, among other things, that the employee did not take leave "for the intended purpose." ... We have interpreted this to mean that an employer has not violated the FMLA if it refused to reinstate the employee based on an "honest suspicion" that the she was abusing her leave. ...

Though the use of an off-duty police officer to follow an employee on leave may not be preferred employer behavior, employers have certainly gone further than Raybestos. ... In any event, the information gleaned from Sergeant Largent's reconnaissance was sufficient to give Raybestos an "honest suspicion" that Vail was not using her leave "for the intended purpose." Vail had taken medical leave for her October 6, 2005 evening shift. The next morning, the off-duty police officer saw Vail working for her husband's lawn-mowing business. Raybestos received this information after it already suspected that Vail was gaming her leave in order to work for her husband's business. So when it heard information consistent with what they suspected she was doing while on leave, Raybestos decided to terminate her. ... Raybestos did not violate Vail’s rights under the FMLA.

The Vail case, however, is vastly different than the example I discussed yesterday, which focused on systematic audits by employers of employees' use of sick time. No one would reasonably argue that an employer cannot legitimately investigate a specific employee that in good faith it suspects of committing fraud. However, the Healthy Families Act very well might prohibit more general investigations that may catch crooked employees in its dragnet.

Section 4114.10(B) of the proposed Health Families Act states: "No employer shall interfere with, restrain, or deny the exercise of or the attempted exercise of any right provided in this Act." It will be up to the courts to interpret what this section means, but employee advocates will certainly argue that blanket investigations of employees' use of sick time could interfere with or restrain employees' use of sick time. If an employee thinks that he or she could be terminated if an employer investigation determines that a sick day was improvidently taken, that employee might be less likely to use sick days at all. Thus, one could conclude that generalized investigations violate section 4114.10(B).

Any statute that could be construed to inhibit an employer's ability to investigate and catch employee fraud is a poorly conceived and drafted statute. This is yet another reason why the Healthy Families Act is bad for Ohio businesses.

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