Employment Law Daily Potential for a transfer following position elimination after employee's FMLA leave bars dismissal
Monday, February 29, 2016

Potential for a transfer following position elimination after employee's FMLA leave bars dismissal

By Joy P. Waltemath, J.D. Taking the position that it had paid a terminated general manager all the damages to which he would have been entitled and renewing its motion for summary judgment, an employer still was unable to convince a federal district court in Oklahoma that there were no disputed factual issues as to whether the GM would have been terminated and his position eliminated under a restructuring regardless of his FMLA leave, or whether he would have been entitled to transfer to another position when his position was eliminated (Janczak v. Tulsa Winch, Inc., February 23, 2016, Eagan, C.). FMLA leave. Hired as GM of the employer’s Canadian operations, the employee was meeting performance standards and even was being given the opportunity to further demonstrate his leadership skills when he was injured in a motorcycle accident and took FMLA leave. The day he returned to work, the GM was told that his employment had been terminated effective immediately “due to the discontinuation of [his] function.” He asked about the possibility of transferring to another position within the company, but the employer did not consider the GM for another position, despite the fact that he was eligible for rehire. Instead, the employer paid him three months’ salary in lieu of notice of termination, consistent with his offer letter. He was not replaced; later, the employer also terminated another Canadian executive. Litigation posture. The GM then sued for FMLA interference and retaliation, and the district court granted the employer summary judgment. On appeal, the Tenth Circuit affirmed on the retaliation claim but reversed and remanded on the interference claim, finding summary judgment premature when the evidence showed only that the employer had been contemplating eliminating the position before the GM took leave; it did not conclusively show that the GM’s termination would have occurred regardless of his FMLA leave. On remand, the employer contended that it had paid the GM all damages to which he was entitled and again sought summary judgment. It said there was no factual dispute that a restructuring occurred and that the GM’s position would have been terminated, regardless of his FMLA leave, by the end of the year, meaning the former GM was entitled to damages only through the restructuring period, a period for which it had already paid him. Back pay entitlement. FMLA interference damages may take the form of back pay intended to compensate for lost wages and benefits before trial, and front pay designed to compensate for losses after trial. Here the Tenth Circuit found that “a reasonable jury could conclude that [the GM’s] taking FMLA leave played a role in his ultimate termination and so find in his favor.” Numerous factual issues existed as to the employer’s motivations in ending the GM’s employment, including exactly when it began to review the Canadian business structure, when it decided to eliminate the GM’s position, and whether that decision was influenced by his FMLA leave. Thus, the court said it was still undetermined whether the GM would be entitled to no additional back pay, as the employer claimed. Reinstatement, front pay. It was the employer’s position that the GM was not entitled to reinstatement because his position no longer existed; it said there was no record evidence that the GM would be entitled to transfer to another position—there were no open positions at the time, it had a no-transfer policy, and the GM was not identified as a high-potential talent. The FMLA, however, prohibits an employer from interfering with an employee’s right to return to the same or equivalent position upon his return from FMLA leave. In lieu of reinstatement, a plaintiff may be awarded front pay. Just as fact issues existed as to the employer’s decision to eliminate the GM’s position, fact disputes existed regarding whether the GM could have transferred to a different position. Had other employees previously transferred between the employer and other subsidiaries, as the GM specifically alleged and other deposition testimony supported? Whether the company had a policy governing such transfers, and whether the GM had been rated as a high potential talent within the company were also in dispute. Accordingly, the court refused to grant summary judgment.

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