Court Watch
October 19, 1999

In a long-awaited decision, the United States Court of Appeals for the Eleventh Circuit has significantly limited the scope of Department of Labor regulations interpreting the Family and Medical Leave Act of 1993 ("FMLA").  In McGregor v. AutoZone, Inc., the Court of Appeals held invalid 29 C.F.R. § 825.208, which states that in order to count an employee's absence against the FMLA's twelve (12) week entitlement, an employer must give prospective notice to that employee that the absence is being counted as FMLA leave.

In AutoZone, the plaintiff, a former supervisor in one of the company's stores, took fifteen (15) weeks leave when she gave birth.  Thirteen (13) of those weeks were pursuant to employer-provided paid disability leave.  The company, however, did not notify the plaintiff that FMLA leave would run concurrently with her paid disability leave.  In addition to thirteen (13) weeks of paid leave, the plaintiff was allowed to take two weeks of  unpaid leave.  When plaintiff returned to work, after fifteen (15) total weeks of leave, she was not offered her prior position, but an available, lesser position.  Plaintiff responded that under the FMLA she was entitled to be restored to her prior (or an equivalent) position when she returned to work after the fifteen (15) week absence.  She sued, claiming that she was entitled to the thirteen (13) weeks of employer-provided paid disability leave she had already received plus twelve (12) weeks of unpaid FMLA leave because her employer failed to notify her -- as required by 29 C.F.R. § 825.208 -- that the two leaves would run concurrently.
 
An Alabama federal district court granted summary judgment for the company, holding invalid the regulation requiring an employer to provide prospective notice to an employee that leaves run concurrently.    In reviewing the district court's decision, the Eleventh Circuit Court of Appeals pointed out that the FMLA provides for only twelve (12) weeks of unpaid leave, and that the FMLA explicitly provides that an employer may require an employee to substitute accrued paid vacation leave, personal leave or other forms of disability leave for any part of the twelve (12) week FMLA entitlement.  The Court of Appeals also noted that the statute does not impose any specific requirements for the type of notification that an employer must provide, or when that notification must occur.  The Court reasoned that in situations where the employer fails to give the employee prospective notice that FMLA leave is being counted, 29 C.F.R. § 825.208 operates to extend leave beyond twelve (12) weeks, a result not suggested or contemplated by the FMLA.  According to the Court of Appeals, when employers exceed the baseline twelve (12) weeks provided by the FMLA, provide more leave than required and, in particular, paid leave, that employer should not find itself sued for violating the FMLA.  In unmistakably clear language, the Court of Appeals stated: "Whether we view FMLA as clear and find the regulation clearly contrary to the statute or whether we view FMLA as somewhat ambiguous and find the regulation manifestly contrary to the statute, the regulations [29 C.F.R. § 825.208] are invalid and unenforceable."  In essence, the Court ruled that the FMLA provides a base line amount of twelve (12) weeks of unpaid leave, and once the employer has provided such leave, it has satisfied its obligation under the FMLA, regardless of the notice it gives.

This decision is extremely significant for those employers who have operations in Alabama, Florida and Georgia, the states encompassed by the Eleventh Circuit Court of Appeals.  For now, individuals employed in those states who are given paid leave for conditions that qualify as serious health conditions under the FMLA will also have that leave counted against their FMLA entitlement, regardless of whether the employer gives prospective notice to the employee that said leave is being counted. CB&S consistently receives calls from employers regarding the FMLA implications of an employee who has been on leave for a period of time, whether for a work related injury or for some serious health condition, and the employer has not provided any notice to that employee that the leave is being counted as FMLA leave.  In these situations, employers have asked whether additional leave must be granted under the FMLA. Until now, the result seemed clear: the employee had an additional twelve (12) weeks of unpaid leave because FMLA leave could only be counted from the moment the employer gives the employee notice that it is going to count such leave as FMLA leave.  Now, the result for employers in Alabama, Florida and Georgia is different. Furthermore, although the Eleventh Circuit's reach is limited to those three states, other appellate courts may use this decision as precedent, thus the likelihood of similar results in other jurisdictions is promising.

The Court's language is also sufficiently broad that it covers those situations where an employee is given unpaid leave but not informed that it counted against their FMLA entitlement.   In short, the decision applies in all situations where the employer fails to give prospective notice that the employee's leave qualifies under the FMLA.
With that said, however; it is still sound practice to give notice to an employee that leave is being counted as FMLA leave immediately after managers determine that leave qualifies under the FMLA.  Although the Eleventh Circuit's opinion is indeed a significant boon for employers, the issue has not been decided finally.  It is possible that other Courts of Appeal will rule contrary to the Eleventh Circuit and that the Supreme Court will eventually address the issue.  Furthermore, if more appellate courts join the Eleventh Circuit, Congress may react by amending the FMLA to incorporate some of the provisions of §825.208.  Moreover, some might argue that the Eleventh Circuit's opinion is limited only to those situations where an employer fails to give notice to an employee that FMLA leave will run concurrently with a paid leave provided by the employer.  Finally, it is good management for employers to keep track of which employees are on leave, how much leave they have used, and how much leave they have remaining.  Providing written notice to employees that their absences count as FMLA leave and including such notices in personnel files is of great assistance in making sure that both the employer and the employee know where they stand in relation to leave issues.

In conclusion, this opinion is a significant victory for employers.  For too long, employers have been penalized by being put in the position of granting employees additional unpaid leave in situations where they have mistakenly or innocently failed to provide prospective notice to the employees that the leave would count against their FMLA entitlement.  This ruling will, for now, provide a defense to employers in Alabama, Florida, and Georgia should they be sued under the FMLA for violation of the notice provisions under § 825.208 of the Department of Labor's FMLA regulations.  The decision could also be the start of a trend in the courts to "rein in" DOL regulations which extend the protection outlined in the FMLA.