The FMLA Blog

Ignorance of Employer's Own Paid Leave Policies Excuses Claim for Liquidated Damages

By statute, liquidated (e.g., double damages) are assumed for a violation of the FMLA. To avoid liquidate damages an employer must demonstrate both that the action or omission was in good faith and that the employer had objectively reasonable grounds to believe that the act or omission did not violate the FMLA.  29 U.S. C. 2617(a0(10(A)(iii).

In Roman v. Potter, No. 09-1600 (1st Cir. May 5, 2010), the employee appealed the decision of the lower court awarding summary judgment to the Postal Service on on her FMLA interference and retaliation claims.  Roman alleged that the four-week delay in the approval of her request for paid leave to run concurrent with her approved FMLA leave violated the FMLA's anti-retaliation provisions for exercising protected rights.  The Postal Service argued that the delay was the result of the ignorance of a local official regarding a recent change in Postal paid leave policy, not illegal retaliation.  Under the former policy, the employee had to sign a leave request form in order to perfect their request for paid leave.  Under the new, automated policy, the employee did not have to sign the form.  The official did not approve paid leave because Roman had not signed the paid paid leave form. When the official responsible for the delay was apprised of the policy change, she promptly approved the paid leave request.  The Postal Service also offered evidence that other management officials had made the same mistake as a result of the policy change.  The First Circuit agreed with the lower court that delay was due to the local official's misunderstanding of the new USPS paid leave policy, not illegal retaliation.

In dicta (the Court, after all, had already ruled that the USPS did not violate the Act), the First Circuit opined that Roman had failed to establish entitlement to liquidated damages because the Postal Service established that "any delay in approving Roman's paid leave was a result of a good faith mistake..."

The Court affirmed the award of summary judgment in favor of the Postal Service.

Comment:  I find the dicta in the decision interesting because it appears to suggest that evidence of a nondiscriminatory purpose (mistake) also met the criteria for relief from liquidated damages.  First, it equates a misunderstanding of a policy with acting in good faith.  Courts have found that good faith requires proof that the employer took affirmative steps to comply with the FMLA.  There is little evidence that this occurred.  Rather, from the decision, it appears that the manager did not investigation before delaying paid leave.  The error was simply caught sometime later by a better informed FMLA coordinator. 

Second, the Court did not address the second requirement for relief from liquidated damages: the employer had objectively reasonable grounds to believe that the act or omission did not violate the FMLA. By the result, the court appears to be suggesting that ignorance of the employer's own policies may serve as objectively reasonable grounds to believe that an act or omission did not violate the FMLA.  Many courts have held that an employer's ignorance of their FMLA responsibilities fails to establish relief from liquidated damages.  That is why the courts have imposed a duty to investigate the situation to ensure compliance. 

It is unclear, at least to me, why an employer's ignorance of their own leave policies that arguably results in disparate treatment would satisfy the criteria for relief from liquidated damages whereas ignorance of the FMLA's regulatory requirements would not.  Perhaps the court did not feel obliged to addressed the matter in detail since the issue was moot anyway.  Curious. 

The First Circuit covers Maine, New Hampshire, Massachusetts, Rhode Island, and Puerto Rico.   

Double Damages for Human Resource Director's Failure to Research FMLA Requirements Before Terminating Employee

A federal court doubled the damages awarded by a jury for violation of the FM LA because the employer failed to research whether a probationary employee was eligible for FMLA leave before terminating her.  

Melissa Brown was hired in November 2002 as a food service director for Plymouth House, a nursing home.  In August 2004, Plymouth contracted with Nutrition Management Services Co., to manage the food service.  Nutrition Management retained Brown to continue as food service director.  In October 2004, Nutrition Management terminated Brown after being informed that she was pregnant.  Brown filed a civil action against Nutrition Management for unlawful interference with her FMLA rights, among other claims.  Nutrition Management argued that it did not violate the FMLA because Brown was not eligible for FMLA leave.  The jury disagreed, awarding Brown $ 74,000 in back pay and damages under the FMLA.  

Brown subsequently filed a motion seeking $ 80,655.82 in liquidated damages.  Title I of the FMLA provides that a prevailing party is entitled to recover liquidated (double) damages equal to the amount of damages awarded for lost compensation plus interest unless the defendant can demonstrate that it acted in good faith on the belief that the actions or omissions was not a violation. 

The FMLA does not define what constitutes "good faith."  Courts, however, have looked to the standard developed under the FLSA, which contains nearly identical language.  Pursuant to that standard, reasonable good faith requires a defendant to take affirmative steps to ascertain the requirements of the law.  "A defendant employer's burden of proof is a difficult one to meet.  Double damages are the norm, single damages the exception."  Martin v. Cooper Electric Supply Co., 940 F.3d 896, 908 (3d Cir. 1991).

Nutrition Management argued that it acted on the good faith belief that Brown was not an eligible employee under the FMLA because her termination occurred during her probationary period.  As support, Nutrition Management offered the testimony of Scott Murray, an attorney with general knowledge of employment law and Nutrition Management's director of human resources.  Mr. Murray testified that he determined that it was "okay" to terminate Brown because she was "a brand new employee."  The Court found that Nutrition Management's reliance on Mr. Murray's cursory determination inadequate to determine whether Brown's prior employer was covered by the FMLA and, if so, whether Nutrition Management was a successor -in-interest.  The court observed:

Nutrition Management presented no evidence that it researched 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 grounds to believe Brown's termination was not a violation. 

Comment:  The employer's reliance on the HR director's general knowledge of employment law in lieu of researching the FMLA cost it an extra $80,000.  To avoid the presumption of double damages you must be in a position to truthfully testify that you conducted a reasonable inquiry into the requirements of the FMLA.  Actually reading the applicable FMLA regulations regarding the issue at hand would be a good start.  The decision reminds us of what they say about taking action based on assumptions.     

Brown v. Nutrition Management Services Co., No. 06-2034, 2009 U.S. Dist. LEXIS 4199 (E.D.Pa. Jan. 21, 2009), 

Review of Statute and DOL Regulations Sufficient to Avoid Liquidated Damages for FMLA Violation

The FMLA provides that a court shall award liquidated damages doubling the amount of lost compensation plus interest for violation of the FMLA.  An employer may avoid liquidated damages if it proves to the satisfaction of the court that: (1) it acted in god faith; and (2) the employer had reasonable grounds for believing that the act or omission was not a violation of the FMLA.  The employer bears the burden of establishing both good faith and reasonable grounds in order to avoid liquidated damages. 

In Cobb v. Contract Transport, Inc., No. 04-305-KSF, 2007 U.S. Dist. LEXIS 45043 (E.D.Ky. June 21, 2007), the employee established that the employer violated the FMLA. The issue before the court was whether to award liquidated damages.  In favor of an award of liquidated damages, the employee argued that the employer failed to establish good faith and reasonable grounds for its action because it failed to consult with an attorney, the Department of Labor, or the DOL FMLA regulations before terminating his employment in violation of the FMLA.  The Court disagreed. The Court noted that consultation with an attorney or with the Department of Labor was not required to establish good faith.  The Court found that the employer's review of the statute and DOL FMLA regulations, in light of its prior experience with the FMLA, was sufficient to establish good faith and reasonable grounds for believing (erroneously, as it turns out) that the employee was not covered by the FMLA and, therefore, termination of the employee was permissible.

Comment:  Consultation with an attorney is not required in order for an employer to demonstrate good faith.  Of course, it couldn't hurt either.  To avoid the FMLA presumption in favor of liquidated (double) damages, employers are going to want to show that they consulted with the DOL regulations, an attorney, and/or an FMLA expert before making an FMLA decision.