Monday, February 9, 2009

‘Tis better to have learned and lost

Brown v. Nutrition Management Services Co., from the Eastern District of Pennsylvania, is a good reminder that ignorance of the law is never an excuse. It also underscores the importance of training.

In Brown v. Nutrition Management Services Co., a jury awarded plaintiff Melissa Brown $74,000 in back pay. The federal judge doubled that award under the FMLA’s liquidated damages provision after deciding that an in-house lawyer’s failure to research whether a pregnant worker was covered by the FMLA showed a lack of good faith.

Under the FMLA a prevailing party is entitled to liquidated damages equal to the amount of damages awarded for lost compensation plus interest unless the employer proves that the violation was in good faith and it had reasonable grounds to believe that it was not violating the FMLA. Reasonable good faith requires an employer to take affirmative steps to determine the requirements of the law. The Court found Nutrition Management’s in-house counsel’s action in determining Brown’s FMLA coverage lacking:

Nutrition Management argues it had a reasonable belief that Brown’s termination would not violate the law because it believed Brown’s probationary status rendered her ineligible for FMLA benefits. Nutrition Management’s alleged good faith belief would only be reasonable if it took affirmative steps to determine the legal effect of Brown’s probationary status; it did not….

Scott Murray, an attorney with general knowledge about employment law and Nutrition Management’s director of human resources, testified at trial that he determined it was “okay” to terminate Brown because she was a “brand new employee.” … Nutrition Management’s reliance on Mr. Murray’s cursory determination was inadequate…. Nutrition Management presented no evidence that it researched or had an attorney research the requirements of the FMLA, or was otherwise aware of the factors governing whether the FMLA would apply to Brown’s request for leave. Nutrition Management, having made no legal inquiry into the requirements of the FMLA, had no reasonable ground to believe Brown’s termination was not a violation.

It didn’t help Nutrition Management’s good faith argument that when asked for a reason to document for Brown’s termination, its CEO said, “he wanted the fat bitch out of there.”

The new FMLA regulations drastically alter the landscape of how companies handle and process employee’s FMLA claims. If for no other reason than to avoid double damages when an employee’s FMLA claim gets botched, organizations should be educating themselves on how to implement these new rules.