FMLA: Its Impact When It Doesn't Apply

ATTENTION ALL BROKERS AND OFFICE MANAGERS: What do you know about FMLA? Is your office covered by its protections?

I hope you read at least this far, because the answers to those questions don't matter.... At least as far as this blog is concerned. Pennsylvania is home to more than 35,000 real estate licensees who practice in brokerages of all sizes. Different offices offer different benefits packages to both employees and licensees; sometimes those benefits are documented in employee handbooks or employment contracts, and sometimes they are much more informal.

In the simplest of laymen's terms, the Family Medical Leave Act ("FMLA") requires employers to allow "eligible employees" to take qualified family and medical leave under certain circumstances. During that time, the employer cannot fire the employee, nor can the employer "retaliate" against the employee for taking FMLA leave. (The FMLA is one of the most complicated employment laws to understand and administer, so any questions that you have about FMLA should be directed to competent legal counsel.) A lawsuit was recently decided where the employee argued that the employer was obligated to comply with the FMLA, even though it did not fall within the intended scope of the law and the employee was "ineligible" for FMLA leave. Why?

The Federal District Court relied upon the principle of "equitable estoppel" to protect the employee. The employee presented portions of the employee's handbook that stated the employer would authorize medical leave in accordance with the requirements of the FMLA. The employee also claimed that her employer confirmed for her, verbally, before she took leave that her request was "covered". As a result, the employee took leave as she would under the FMLA, rather than scheduling vacation or sick leave to account for the time that she needed away from work. Soon after returning to work, she was fired for a "work-related incident".

After being fired, the employee sued her employer for violating the FMLA. The employer filed a motion to dismiss the lawsuit because the employer was not covered by the requirements of the FMLA, and the employee was not "eligible" for FMLA benefits. There is no question that neither the employer nor the employee was covered by the FMLA requirements. However, the Court decided that it was unfair for the employer to promise a FMLA-like medical leave policy, but then to refuse to deliver on that promise. In other words, the employer was "equitably estopped" from straying from the FMLA laws and regulations.

It is important to understand that this decision, even though at the Federal level, is a trial court's decision to deny the employer's motion to dismiss the lawsuit. It currently has only limited binding authority; the employee still has to prove her case. The decision is important and instructive, however, because the deciding judge is predicting that the appellate court will rule in this way (when and if it is asked to do so) based upon similar cases decided in other jurisdictions and past rationale under different circumstances that suggest how the court will rule in the future. As employing brokers and office managers, this decision should inspire you to review the benefits that you offer your employees and licensees, regardless of whether your policies are established in a handbook or have been determined by your course of conduct over the years. If you have a policy in place, whether in writing or otherwise, that addresses family or medical leave, then you should review that policy with your attorney to determine what obligations you may have assumed. Make sure that you review any policies that exist and any changes that you might want to make with your attorney before you make those changes.