FMLA administrator breached contact by granting wrong leave amount with no verification or notice to employer
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Tuesday, June 28, 2016

FMLA administrator breached contact by granting wrong leave amount with no verification or notice to employer

By Marjorie Johnson, J.D. Hewitt Associates breached its consulting agreement with RBS Citizens Financial Group when it failed to comply with the provisions of the "delivery model" after incorrectly advising an employee that he had an additional 16 weeks of protected leave without verifying the leave or notifying RBS of the discussion. Granting summary judgment on RBS’s breach of contract claim in part, a federal court in Connecticut also determined that a triable fact issue existed as to whether RBS mitigated damages caused by the employee’s subsequent lawsuit (which he filed after he was replaced and terminated), since it was disputed whether he could have been placed in another position or given his old job back. However, RBS’s negligence claim was tossed since it was admittedly unable to demonstrate that the breach was "attended by some additional conduct which amounted to an independent tort" (RBS Citizens Financial Group, Inc. v. Hewitt Associates, LLC, June 22, 2016, Arterton, J.). The employee was granted FMLA leave after he fell off a chair at work and injured himself on October 5, 2009. Because he had already taken FMLA leave earlier that year, his available FMLA leave extended until December 3 under the rolling method of calculating leave (which RBS utilized) and until Dec 31 under Connecticut’s FMLA law. However, when he contacted Hewitt on December 1 about taking additional leave to undergo elective surgery, a Hewitt rep erroneously told him that his CT-FMLA leave would "refresh" on January 1, 2010, and thus he would have the full 16 weeks of entitlement and job protection through April 22. Since Hewitt did not inform RBS of this conversation, the employee’s supervisor emailed an HR rep about the employee’s leave status on December 7 (since he hadn’t returned). The HR rep contacted a Hewitt rep, who responded that his FMLA leave exhausted on December 3 and that he remained on CT-FMLA until December 31. After the employee failed to return from leave on December 31, his manager made plans for his replacement on January 6. On January 25, HR notified the employee that his FMLA leave was exhausted as of January 1 and his job was no longer available. On February 17, he called Hewitt to clarify whether he did in fact have job protection through April 22, and the Hewitt rep confirmed that he did. RBS didn’t learn of Hewitt’s communications with him until April 9, when the employee told HR that the Hewitt had told him he was entitled to 16 weeks of job-protected leave beginning January 1. After a DOL rep advised RBS that it appeared it was required to reinstate the employee, it gave him 45 days to find a new position within the company, which he failed to do. He subsequently filed a lawsuit against RBS asserting several FMLA and tort claims. The parties eventually settled the case for $400,000. In the instant action, RBS sought to recover those costs. Breach of duties. RBS established that Hewitt breached its master consulting agreement (MCA) by failing to comply with the provisions of the "delivery model" after the employee’s December 1 phone conversation with Hewitt’s representative. Specifically, Hewitt failed to meet its duty to verify his eligibility for leave and send him an FMLA confirmation letter; to notify RBS of his intent to take leave; to send an FMLA approval or denial letter to him and notify RBS it did so; and to send updated employment status to the HR service center. Hewitt did not deny that it failed to perform those services, but instead argued there was no breach since it did not grant the employee leave during the December 1 phone call (as he was "exploring" his options). The court squarely rejected its argument since Hewitt’s rep confirmed that grant of leave during the phone call with the HR rep in February. Specifically, the Hewitt rep stated that the employee was eligible for job protection until April 22 (exactly 16 weeks from January 1). The court also rejected Hewitt’s assertion that there was no guarantee of accuracy under the MCA. Because it had a provision requiring Hewitt to "verify" the eligibility of an employee seeking FMLA leave (or the state FMLA equivalent), Hewitt’s failure to ensure that the employee was eligible for leave before approving it was a breach of the contract. Accordingly, no reasonable jury could find that Hewitt did not breach the delivery model provisions of the MCA. Failure to indemnify. Hewitt also undisputedly breached the MCA by failing to indemnify RBS for its negligence. The court was unpersuaded by Hewitt’s assertion that RBS’s failure to engage in the interactive process before replacing the employee severed the causal connection. Even if RBS’s conduct was negligent, it could not have caused Hewitt’s original negligent conduct to become totally inoperative, nor was it unforeseeable. Rather, a reasonable jury could only conclude that the natural and probable consequence of Hewitt informing the employee on December 1 and February 17 that he had job-protected leave until April—while telling RBS on December 7 and February 9 that his leave expired at the end of December—was that RBS would replace him in when he didn’t to return to work. Mitigation? However, a triable fact issue existed as to whether RBS failed to mitigate damages by failing to make reasonable efforts to find or create an opening for the employee between April and July 2010 since there was conflicting evidence as to whether he could have been placed in an open position or been given his position. Thus, summary judgment was not appropriate on this issue.

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