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Reaux Decision Provides Wake Up Call for Employers Regarding FMLA Policies

April 2, 2009

A recent decision of the district court for the Northern District of Illinois highlights the need to scrutinize Family Medical Leave Act ("FMLA") policies and practices to ensure they are not applied in an overly broad fashion. In Reaux v. Infohealth Mgmt. Corp., 2009 WL 635468 (N.D. Ill. March 10, 2009), the court denied Infohealth's motion to dismiss Ms. Reaux's FMLA claim despite the fact that she was not eligible for FMLA leave under the law. In rendering its decision, the Court found that, while Ms. Reaux failed to meet the definition of an eligible employee under the FMLA because Infohealth employed fewer than 50 employees within a 75 mile radius of Ms. Reaux's worksite ("the 50/75 Rule"), Infohealth was equitably estopped from relying upon a defense of FMLA ineligibility to dismiss the case.

According to the allegations in her Complaint (which the Court accepted as true for purposes of ruling on the motion to dismiss), Ms. Reaux was fired while she was on a maternity leave that had been approved by Infohealth. Ms. Reaux alleged that Infohealth terminated her when it realized she was not statutorily-eligible to take the FMLA leave. Reaux argued that, even though Infohealth was not required to allow her to take FMLA leave under the law, it was equitably estopped from claiming that she was ineligible based on the FMLA policy in Infohealth's employee handbook and its verbal and written assurances that she was eligible to take FMLA leave. Infohealth's employee handbook set forth certain eligibility criteria that track the eligibility requirements of the FMLA, including the requirement that employees must have actively worked for the company for at least 12 months and for at least 1250 hours in the 12 months immediately preceding the first day of FMLA leave. The handbook, however, made no mention of the 50/75 Rule or its impact on an employee's eligibility for FMLA leave. Further, Ms. Reaux alleged that Infohealth had pre-approved her leave and that her direct supervisor had told her she would be entitled to the leave if she filled out the FMLA paperwork, which she did.

In rendering its decision, the Court noted that the Second, Fifth, and Eight Circuits have recognized the availability of equitable estoppel to defeat a defense of FMLA ineligibility and that the Seventh Circuit had assumed but not unequivocally decided as much.

The Reaux decision illustrates the need for employers to review their FMLA policies to ensure they track statutory requirements and do not promise benefits to employees who are otherwise ineligible under the law.

Further, because the FMLA requires employers to provide employees notice of whether they are eligible for FMLA leave within five days after learning of an employee's need for potentially FMLA-qualifying leave, employers must be diligent in ensuring that supervisors and Human Resources professionals refrain from making any representations regarding FMLA coverage until there has been an opportunity to assess the relevant circumstances.

Employers seeking assistance in reviewing their FMLA policies and procedures in light of the Reaux decision should contact one of the attorneys listed below or their regular C&M contact.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Kris D. Meade
Partner – Washington, D.C.
Phone: +1.202.624.2854