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Don't HR Alone #3 - FMLA Checklist

Survey shows employees want flexible schedules and summer Fridays, but fewer companies offer them — SURVEY RESULTS, (May 23, 2017)

Idaho updates W-2 electronic reporting manual — IDAHO — Withholding and Reporting, (May 23, 2017)

Texas bill preempting local regulation, setting independent contractor status, heads to governor’s desk — STATE LAW, (May 23, 2017)

Employee placed in different job upon return from leave, laid off weeks later is denied FMLA claims — FEDERAL NEWS

Observing that the plain language of the FMLA does not require an employer to restore an employee returning from leave to his previous position no matter what, the Fourth Circuit, in agreement with the court below, rejected the contention of an employee—who was restored to a different position after leave and then laid off several weeks later—that his employer interfered with his FMLA rights by not restoring him to his pre-leave job. Nor could a reasonable factfinder conclude that the company failed to place him in an equivalent position or that the differences between the two jobs were more than merely de minimis. The employer was also entitled to summary judgment on the employee’s claim that it interfered with his FMLA rights by reinstating him to a sham position and then firing him at the first opportunity. Finally, the court affirmed summary judgment against his FMLA retaliation claim.

Employed as a senior director of operations by Potomac Fusion, the employee maintained that title when Sotera, a defense contractor, acquired the company. Several months later, the army selected Sotera as one of the nonexclusive prime contractors for its "NexGen" software program and the employee became the project manager (PM) of the NexGen work. Sotera, however, had to outbid other contractors for the work, and during the employee’s brief tenure as PM, he had no staff or employees reporting to him on NexGen projects and his salary was paid out of Sotera’s overhead costs.

Budget sequestration. Not long after he was appointed PM, the employee severely hurt his hand and was unable to return to work for several weeks. While on FMLA leave, Sotera appointed a new PM for the NexGen project. Also shortly after he began his leave, the federal budget sequestration went into effect, resulting in substantial cuts to federal spending and a delay in the NexGen program. When the employee returned to work, he was placed under a different supervisor and tasked with helping to grow Sotera’s new Electronic Warfare Program (EWP).

Laid off. As a result of the sequestration, however, there was a drastic decrease in work and the employee was laid off. The worker who replaced him in the NexGen project, however, retained his job. The employee then sued, asserting interference and retaliation claims under the FMLA. The district court granted summary judgment in favor of Sotera on all his claims.

Failure to restore. On appeal, the employee argued that Sotera interfered with his FMLA rights by failing to restore him after he returned from leave to his former position. Disagreeing, the court pointed out that an employee who takes FMLA leave has the right to be restored either to his original position or to an equivalent position. Further, the restoration provision does not indicate a preference for restoring covered employees to their pre-leave jobs over "equivalent" positions and does not require an employer to hold open an employee’s original position while that employee is on leave. Nor was his reliance on 29 C.F.R. Sec. 825.214 helpful, as the regulation simply clarifies that an employee returning from FMLA leave may be restored to an equivalent position even if he has been replaced in his original position.

Equivalent position. As to his contention that Sotera interfered with his FMLA rights by failing to restore him to an equivalent position, the court found it undisputed his salary was identical for both jobs, he was eligible for bonuses in both positions, the employment benefits were exactly the same for both jobs, the worksite was the same before and after leave, this title remained the same, and his new duties and responsibilities were substantially similar to those of his original position. In the court’s view, "no reasonable factfinder could conclude that Sotera failed to place" the employee in an equivalent position or that the differences between the jobs were more than merely de minimis.

Termination. Also rejected was the employee’s contention that a triable question of fact existed as to whether his post-leave position was a sham, essentially scheduled to be eliminated after a few weeks. The employee could point to no actual record evidence that would permit a jury to conclude—without speculating—that the new job was a sham. Rather, the undisputed evidence showed his position was genuine and was not slated for layoffs at the time he returned from leave. Not only did he work toward winning a contract worth $70 million, a company VP was also assigned to that project and he also lost his job following the failed bid.

Retaliation. Finally, the employee argued that Sotera terminated him in retaliation for exercising his rights under the FMLA to take medical leave. Even assuming he established a prima facie case of retaliation based on the close temporal proximity between his return from leave and his termination, Sotera offered evidence that the government sequestration had a disastrous effect on the defense contracting industry, cutting federal spending on programs such as NexGen.

Further, the company missed its projected revenue during the relevant time period by $110 million and determined that drastic cuts in spending were required. To effectuate the cuts, it began laying off employees, focusing initially on workers who were not performing important strategic work that could be billed directly to the government, and thus the employee was among the first to be included in the layoffs.

While he argued that Sotera’s claim about the need to save money made no rational sense because it paid the employee who replaced him in his NexGen position more, and that employee was not terminated, this did not show pretext as he did not fit the criteria for the initial layoffs. Specifically, unlike the employee here, he was responsible for numerous additional contracts and projects, including some work that was directly billable to the government.

SOURCE: Waag v. Sotera Defense Solutions, Inc., (CA-4), No. 15-2521, May 16, 2017.

Mo. Sup. Ct.: School district employee retains verdict in wrongful discharge suit, but damages reduced on appeal — MISSOURI — Whistleblowers

A purchasing manager for school district, who alleged that he was wrongfully discharged in violation of public policy after he raised concerns about possible illegal practices, survived an employer’s arguments on appeal to the Missouri Supreme Court. Although the state high court affirmed the award in favor of the employee, it did remit the amount of damages, reducing the jury’s damage award from $500,000 to $403,139 (Newsome v. Kansas City, Missouri School District, May 16, 2017, Fischer, Z.).

The employee worked as a purchasing manager for the school district and was responsible for administering purchasing and contracts in compliance with state law and the district’s policies and procedures. Relevant to this action are two requests he received shortly before his termination. In June 2011, the school district’s superintendent asked him to adjust the purchase order of a consultant so he could be paid for additional visits not specified in his contract. Believing it was illegal in Missouri to alter contracts after the fact, the employee brought the matter to the attention of his supervisor.

Later that week, in a separate matter, the employee objected to the school district’s facilities department’s purchase of three vehicles. Prior to the purchase, the employee identified a state contract with a Ford dealership on which the district could "piggyback" the purchase. The school board approved the purchase of three Explorers. However, the dealership could only provide three Escapes by June 30, the desired procurement date. Despite the vehicle change, the facilities department wanted to proceed with the purchase of the Escapes (which had a lower value for a price nearly the same as the Explorers). The employee reported his concerns about the proposed purchase to the supervisor, who ignored him. Thereafter, the employee placed a memorandum in the school district’s electronic accounting system documenting his concerns.

Three days later, the school district presented the employee with the option of resigning and accepting $20,000 or being terminated. To receive the $20,000, the employee had to sign a waiver of claims. He initially signed the waiver, but timely revoked his signature, and rescinded his resignation. Thereafter, the district terminated his employment.

Assessment of damages. The employee filed suit asserting a claim of wrongful discharge in violation of public policy. The case proceeded to trial. A jury returned a verdict in favor of the employee and assessed damages of $500,000, and the trial court entered judgment in accordance with the verdict. Subsequently, the school district made several post-trial motions, including for judgment notwithstanding the verdict. After they were denied, this appeal ensued.

Sovereign immunity waived. The school district first asserted that the trial court erred in overruling its motion for judgment notwithstanding the verdict (JNOV). A motion for judgment notwithstanding the verdict "should be granted if the defendant shows that a least one element of the plaintiff’s case is not supported by the evidence." Here, the court first addressed the threshold matter of sovereign immunity.

For suits against public entities, sovereign immunity is the rule, not the exception. As such, to make a submissible case, the employee had to prove that the school district waived its sovereign immunity. Under state law, a political subdivision may purchase liability insurance for tort claims and, in doing so, waives its sovereign immunity for claims covered by the insurance policy. In this instance, it was undisputed that the school district had purchased liability covering the type of claim brought the employee. Moreover, in rejecting the employer’s contention that it retained its sovereign immunity, the court concluded that it could not rely on an endorsement to the policy whose execution was not in compliance with state law.

Public policy exception. The court turned back to the employer’s contention that the trial court erred in denying its motion for judgment notwithstanding the verdict. As an initial matter, the Missouri high court pointed out that it has recognized two distinct categories of the public policy exception to the at-will employment doctrine: (1) refusal to violate public policy; and (2) reporting violations of public policy—"whistleblowing."

The employer insisted that the public policy exception did not apply here because the employee reported merely requests that would violate public policy. The state high court rejected this argument because it failed to recognize the superintendent’s payment request was submitted under a refusal theory, not a whistleblower theory. For the Escapes purchase order, the court found that the employee did not have to wait for the purchase to be finalized before he reported his concerns. It was sufficient that he reported the facilities department’s intent to go through with the unauthorized purchase. To hold otherwise would mean no whistleblower protection for preventive reporting, which would be inconsistent with the court’s reason for adopting the public policy exception. Accordingly, the trial court did not err in overruling the school district’s motion for judgment notwithstanding the verdict.

The case is No. SC95538.

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