In an effort to root out employee abuse of Family and Medical Leave Act violations, employers are increasingly relying upon the “honest suspicion” defense – and winning.
Led by several decisions from the 7th Circuit, courts are holding that employers who terminate workers suspected of exploiting their time off do not violate the FMLA if they have an “honest suspicion” or “honest belief” the leave was being abused.
As the 7th Circuit recently explained in Scruggs v. Carrier Corporation, “‘an employer can defeat an interference claim by showing, among other things, that the employee did not take leave ‘for the intended purpose.’ In the 7th Circuit, because an employee has ‘no greater right to reinstatement or to other benefits and conditions of employment than if the employee had been continuously employed,’ an employer need only show that ‘it refused to reinstate the employee based on an “honest suspicion” that she was abusing her leave.’”
In that case, the 7th Circuit affirmed summary judgment for an employer that fired a 20-year employee after a private investigator reported that he did not leave his house on a day that he claimed he was taking his mother to a medical appointment.
Despite the employee’s documentation – a doctor’s note, a letter from the nursing home where his mother lived and the sign-out sheet from the nursing home – the court said the employer’s honest belief that the employee was abusing his leave meant his termination didn’t violate the FMLA.
“Although [the employer] could have conducted a more thorough investigation, as [the employee] fervently argues, it was not required to do so,” the panel concluded. However, the court didn’t explain what level of investigation would be required.
The decision in Scruggs allows companies to be more aggressive in trying to police FMLA abuse, said Ryan N. Parsons, who practices management-side labor and employment law at Foley & Lardner in Milwaukee.
Parsons characterized the standard as requiring employers to establish “a good faith basis for their concern about [FMLA abuse],” which allows the courts to sanction the employer’s actions and uphold employee terminations.
Plaintiffs’ attorneys, however, decried the rise of the defense.
“This is a way for employers to do an end-run around their obligations under [FMLA],” argued Michael Schultz, a partner at Parr Richey Obremsky Frandsen & Patterson in Indianapolis who represented the plaintiff in Scruggs. “We have a federal statute that contains mandatory language that employers are required to honor [FMLA] requests when the person is eligible and their leave request meets the qualifications of the statute,” he said. “But these cases stand for the notion that if the employer has an honest suspicion that the employee is abusing the leave, they can terminate the employee and do it with impunity.”
The 7th Circuit has led the way on “honest suspicion” or “honest belief” cases, although other courts have also accepted the defense.
In May, for example, the 6th Circuit held that an employer didn’t violate the FMLA when it fired an employee after co-workers reported they saw him at a local Oktoberfest.
The employee had been granted a leave of absence for a herniated disc in his back and severe leg pain but his co-workers said he was walking unassisted and unimpaired at the festival.
In that case, the panel said the “key inquiry” for courts evaluating an honest belief defense is “whether the employer made a reasonably informed and considered decision before taking an adverse employment action.”
The recent cases alleging FMLA abuse can be attributed in part to social media, said Ryan L. Young, who practices employment law at Wessels Sherman in Chicago.
Disgruntled co-workers may report that instead of using time off as requested for FMLA purposes, an employee went to Six Flags with his kids, as indicated by pictures he posted of himself on Facebook.
“People aren’t very cautious about what they post,” Young said.
The “honest suspicion” or “honest belief” defense is a slight misnomer, Young noted, as the employer can’t rely upon a suspicion without conducting some form of an investigation.
In honest suspicion cases – including Scruggs – the employer often relies upon a private investigator to document alleged FMLA abuse.
But because hiring private investigators and conducting surveillance can be cost-prohibitive, Young said employers may choose to conduct their own investigations.
In addition to the cost factor, Parsons cautioned employers about the potential consequences of asserting the honest suspicion defense.
“Employees may feel like they are being spied on,” he said, leading to resentment in the workplace. Coupled with the potential cost of an investigation, “employers should save this [defense] for flagrant abuse [of FMLA leave],” he advised.
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“If abuse of FMLA leave is a real problem, then the employees are less likely to be put off by the employer’s investigation and the employer’s actions are more likely to be upheld in court,” he said. “This is not a tool that is going to be used all the time.”
How to rebut a belief?
Employers should be allowed to conduct reasonable investigations if they suspect leave is being misused, Schultz agreed.
But if an employee provides evidence to support that he or she was not abusing the leave, “the issue ought to be up to a jury,” he said.
In the Scruggs case, the employee provided evidence to rebut the findings of the private investigator, Schultz said, but the 7th Circuit did not accept it.
“At least in the 7th Circuit, if an employer has a ‘belief’ … that is enough to fire an employee,” he said.
In addition, Schultz said, what an employer describes as an investigation could also be viewed as a witch hunt. Scruggs was followed on three separate occasions and the investigator found no evidence that he was abusing his leave on the first two occasions.
“Did they stop following him at that point? No, they kept following him,” Schultz said.
Douglas Krasnoff, a sole practitioner in Indianapolis and co-counsel in the Scruggs case, said the 7th Circuit also engaged in improper burden-shifting.
In a FMLA interference suit, if the criteria in the statute are met for a violation of the statute, the analysis is over, Krasnoff said.
But courts seem to be establishing a practice of “back door” burden-shifting in these cases by allowing employers to assert the honest suspicion defense, Krasnoff contended.
In a typical burden-shifting analysis in a Title VII employment discrimination suit, for example, an employee might allege that she was let go because she is female. The burden then shifts to the employer to present a legitimate, non-discriminatory reason for the termination.
Allowing an employer to present such a reason in a FMLA interference case – their “honest suspicion” of misuse of the leave – creates a burden-shifting analysis that is impermissible in a FMLA interference case, Krasnoff said. Allowing that leaves plaintiffs facing a stacked deck because there isn’t a way to rebut a belief, he contended.
“If I say I believe in Santa Claus, then you have to prove that I am lying about my belief even if we all know he doesn’t exist,” he said.
“If all the employer has to do is articulate a reason and say, ‘Gee whiz, we believe he is abusing his leave and we fired him,’ what are employees supposed to do to overcome that?” Schultz asked. “Plaintiffs are really left in a tricky situation.”
Schultz and Krasnoff are not appealing the Scruggs decision to the U.S. Supreme Court, so the case law in the 7th Circuit remains employer-friendly, they said.
“I have a new client with facts almost identical to Mr. Scruggs,” Schultz said. “And now he’s facing the same awful law in this Circuit.”