Monday, July 13, 2009

Court adopts no-harm, no-foul approach to employer misstatements about FMLA coverage

By definition, the FMLA only applies to those businesses that employ 50 or more employees within a 75-mile radius. A smaller employer, however, can render itself covered by the FMLA by making certain representations about FMLA coverage to its employees. For example, see Don't estop yourself into coverage.

In Dobrowski v. Jay Dee Contractors (6th Cir. 7/8/09) [PDF], the 6th Circuit adopts a common sense, no-harm/no-foul approach to coverage estoppel under the FMLA. Even though Jay Dee had less than 50 employees and was not covered by the FMLA, when Daniel Dobrowski needed time off for surgery Jay Dee’s president provided him a form entitled, “Application for Leave of Absence under the FMLA.” Prior his leave, the corporate president also delivered to Dobrowski a letter memorializing the approval of his leave, indicating that “[p]ursuant to the Family and Medical Leave Act, Jay Dee Contractors, Inc. will leave [Dobrowski’s] position open for at least twelve (12) weeks from October 18, 2004,” and enclosing a Department of Labor publication certifying his FMLA leave. When Jay Dee terminated Dobrowski at the end of his leave, he filed suit under the FMLA.

The 6th Circuit affirmed the district court’s dismissal of the FMLA claim. The court recognized that even though Jay Dee was too small to be covered by the FMLA, it could estop itself into coverage if Dobrowski could show (1) a definite misrepresentation as to a material fact, (2) a reasonable reliance on the misrepresentation, and (3) a resulting detriment to the party reasonably relying on the misrepresentation. The court found Dobrowski’s FMLA claim lacking on the 2nd element – reasonable reliance:

There is no evidence in the record to show that he “change[d] his position” in reliance on the belief that his leave would be FMLA-protected…. Had he relied on the erroneous representations, one would expect Dobrowski to be able to point to some action or statement that indicated that his decision to have the surgery was contingent on his understanding of his FMLA status; or perhaps evidence that raises an inference of such contingency – for example, a record that he made an inquiry as to his rights, asked for written confirmation of his leave arrangement, or changed his behavior after being told he was eligible….

If anything, the record shows that Dobrowski had already decided on and scheduled the surgery by the time he was informed of his eligibility. There is no evidence of a discussion of the FMLA eligibility prior to the application for leave filed with Jay Dee on September 27 – about three weeks prior to his October 15 surgery, and well after he informed the company of his planned absence.

The court indicated that its result might have been different if, for example, Dobrowski had “remained on leave beyond his FMLA period after receiving written assurance from his employer that his extended leave would be covered.” But, in the court’s correct view, “the question is not whether Dobrowski acted in conformity with the FMLA … but whether he changed his behavior in reliance on the Act.”

This case gives some solace to small businesses that FMLA coverage will not be granted in all cases in which the status of such coverage is misrepresented. Employers should not, however, take Dobrowski as carte blanche to make such misrepresentations. Employers still need to be mindful of the coverage thresholds for statutes to ensure that they are making informed decisions about the benefits and other terms and conditions offered to employees. 

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