Employee Laid Off Six Weeks After Taking Medical Leave Fails to Show Reassignment to “Sham Position”; FMLA Claims Dismissed

What obligations does an employer have to an employee returning from leave under the Family and Medical Leave Act (FMLA)?

What must the employer do if it was forced to fill that employee’s position during the employee’s absence?

How long after the employee returns must the employer wait before taking an adverse action against that employee?

The U.S. Court of Appeals for the Fourth Circuit recently provided guidance to employers who frequently face these questions in the context of FMLA administration. In Waag v. Sotera Defense Solutions, Inc., the employer, Sotera, filled the position of an employee, Gary Waag, while he was out on FMLA leave, and assigned Waag to a different position when he returned.  Less than six weeks later, Sotera laid off Waag in a workforce reduction.  Waag filed suit claiming FMLA interference and retaliation.  The Fourth Circuit affirmed the lower court’s dismissal of the case, holding that Sotera was not required to return Waag to his original position and that Sotera reassigned him to a bona fide equivalent position, not a “sham position” meant to mask a discriminatory or retaliatory reason for his termination.  Most importantly, the court held that the “temporal proximity” of six weeks’ time between Waag’s return from medical leave and his termination was insufficient by itself for him to succeed on his FMLA interference claim.

Plaintiff Waag took a two-month medical leave to recuperate from a severe head injury. During Waag’s absence, Sotera filled his position.  Upon his return, Waag was assigned to a new position in a different division, albeit with the same salary, benefits, and terms and conditions of employment.  Six weeks after Waag returned to work, a drastic drop in work and revenue caused Sotera to begin a series of reductions in force, and Waag was included in the first round of layoffs.  Waag filed suit, alleging that Sotera violated his FMLA rights by putting him in a “sham position” that Sotera planned to eliminate shortly after his return from leave.

The Fourth Circuit rejected Waag’s claims. Addressing Waag’s claim of FMLA interference for failure to restore him to the same or an equivalent position, the court emphasized that Waag did not have an absolute right to reinstatement to his original position.  Rather, an employee “has the right to be restored either to his original position or to an equivalent position,” and an employer is not required to restore the employee to his original position if that position is no longer vacant.  Sotera fulfilled its obligations under the FMLA by reassigning Waag to a bona fide equivalent position with “substantially similar duties and responsibilities.”

Regarding Waag’s claim of FMLA interference based on his termination, the court held that although the close, six-week temporal proximity between his protected activity (medical leave) and the adverse action (termination) could demonstrate causation for purposes of establishing a prima facie case, it was insufficient standing alone to satisfy Waag’s burden of showing that his reassignment and the budgetary reduction-in-force were pretext for his termination.  Finally, the court rejected Waag’s claim of FMLA retaliation for failing to prove retaliatory intent.

This decision provides important guidance for employers reintegrating employees returning from FMLA leave. It makes clear that employers are not required to restore an employee to the exact same position held before taking leave, particularly where the original position had to be filled during the employee’s leave.  Indeed, employers are not required to hold open the employee’s original position while that person remains on leave.  Employers instead may place the employee in an equivalent position with the same status, pay, benefits, and “substantially similar duties and responsibilities.”  If intervening factors arise causing the employer to terminate the employee, either while on leave or shortly after returning from leave, the temporal proximity between the leave and the termination decision alone will not substantiate an FMLA claim – at least in the Fourth Circuit.  (Employers should be aware that courts in other jurisdictions may more closely scrutinize the temporal proximity and rely upon it in assessing pretext.)  In these instances, however, it is particularly important that an employer can point to documentary evidence of the legitimate, non-discriminatory reasons supporting the termination decision.  As a best practice, employers should contemporaneously document and clearly communicate their reasons for taking such adverse actions.

Finally, while the subject was not raised in this case, employers should always be cognizant of their obligations under the Americans with Disabilities Act (ADA), especially after an employee has exhausted FMLA leave. Depending on the employee’s reason for leave, the ADA may impose additional obligations – beyond those of the FMLA –to extend the employee’s leave, transfer or reassign the employee, or otherwise accommodate the employee.  In matters involving the interplay of the FMLA and ADA, employers are advised to consult with counsel to determine the proper course of action.