by Renee Mielnicki, Esq.
As Employment Counsel, I get many calls asking for guidance regarding terminating employees who are either out on a medical leave of absence or shortly after they have returned therefrom. During the call, I often get asked, “Why does any of this matter? This is an at-will state. I should be able to do whatever I want.” Well, for most states, unless the employer has a unionized workforce or an employment contract with the employee, that is technically true. However, employers still cannot terminate an at-will employee for a retaliatory or discriminatory reason. If they do, the employee can file a lawsuit against the employer. Let’s examine the situations where these issues may arise.
The Family Medical Leave Act: The Family Medical Leave Act (“FMLA”) is a federal law that applies to employers that have 50 or more employees. Under this law, eligible employees are allowed to take up to 12 weeks of unpaid leave in a 12 month period for certain qualifying reasons, including a serious health condition. Employers frequently believe that an employee on FMLA can never be terminated since they have a legal right to be reinstated to their same or equivalent job at the end of leave. While it is true that this is a job-protected leave, it is also true that employees on FMLA may still be terminated while on FMLA if the reason is not in retaliation for taking FMLA leave and is non-discriminatory. In other words, if the employer can show that the decision to terminate is unrelated to the FMLA leave, it can be done.
However, documentation and timing mean everything when making such a decision. Unfortunately, a decision to terminate an employee shortly after they have requested or returned from FMLA leave gives a strong presumption in the employee’s favor that the termination or lay off was due only to the employee’s decision to exercise his or her FMLA rights. For instance, an employee who has repeated instances of misconduct that occurred months ago may be able to establish a violation of his or her FMLA rights if the employer decided to terminate the employee for that misconduct only two days after the employee goes out on FMLA. Why? Because the delay in the decision to terminate until the employee exercised FMLA rights creates a strong presumption that the decision to terminate was due to taking FMLA, not the misconduct. In this situation, not only would the timing of the decision be important, but proper documentation of the prior misconduct would be as well to show a valid business reason for the termination that was not retaliatory or discriminatory. Unfortunately, the burden to prove that a termination decision was not retaliatory and non-discriminatory is always on the employer.
One situations in which an employer may be able to show a legitimate business reason for the termination would be if the employer discovered significant misconduct while the employee is out on leave. For example, learning the employee committed some type of 
theft or other dishonest act in the workplace after the employee went out on leave. However, proper documentation of these facts would be critical to show not only that the act occurred prior to FMLA leave, but that the employer had no knowledge of the act until after the leave occurred and then acted promptly. As far as a layoff, the employer would again have the burden to show that the person would have been selected regardless of taking FMLA leave. This would be hard to prove if the only employee selected was the one out on FMLA leave. A best practice in this case would be to include the employee in a group or to eliminate their entire department.
The Americans with Disabilities Act: The Americans with Disabilities Act (“ADA”) is a federal law that applies to employers that have 15 or more employees. This law offers a myriad of legal rights for those that meet the definition of disabled under the Act. One right that most employers are not aware of is the employee’s right to a medical leave of absence as a reasonable accommodation. Most employers are under the impression that they can automatically terminate an employee who fails to return after the expiration of FMLA leave because they are still medically unable to work. Unfortunately, the ADA can both extend the time for an employee to take medical leave after the expiration of FMLA as well as provide employees not eligible for FMLA with a leave of absence for health reasons. Like those on FMLA, employees on a leave of absence under the ADA also have the right to reinstatement to their previous job, an equivalent position or a vacant job for which they are qualified, unless the employer can show that holding the job open is an undue burden on the operation of its business. An undue burden essentially means that holding the job open for the employee to return would cause the employer a significant difficulty or expense. This is a fact specific analysis that requires an examination of many factors including, but not limited to, the size of the employer, the number and location of its facilities, the cost of the accommodation, its financial resources, the impact the accommodation would have on its employees and the employer’s ability to conduct its business. Unfortunately, the larger the employer and more resources it has, the longer it may have to hold a job open for an employee while out on leave under the ADA. Courts have deemed varying amounts of leave as reasonable under the ADA, even up to 15 to months, depending on the fact pattern.
Aside from the undue burden analysis, if terminating an employee for misconduct or due to a layoff, proper documentation and timing are again critical. To avoid the termination being categorized as retaliatory or discriminatory, employers must be able to demonstrate a legitimate business reason for such a decision and that the decision was made independent of the employee’s exercise of their rights under the ADA. Again, this burden remains that of the employer’s.
Worker’s Compensation: Most employers are not aware that employees on worker’s compensation do not have reinstatement rights under most state worker’s compensation laws. In Pennsylvania, employers can discipline or terminate an employee either on worker’s compensation leave or shortly after returning therefrom if it can show that the decision was not retaliatory and was not related to the filing of the worker’s compensation claim. Otherwise, the employee would have a claim for wrongful discharge under state law against the employer. Of course, just like the FMLA and the ADA, this burden is exactly the challenge. Again, timing and proper documentation are everything. In addition, employees on worker’s compensation leave may also qualify for leave under the ADA and/or FMLA. Therefore, the leave may then become job protected and the analyses and considerations mentioned above would also need to be considered. One example where an employer may be able to successfully show that termination was unrelated to the worker’s compensation claim would be where an employee engages in misconduct that would warrant termination for any employee under the employer’s policy, such as a theft, workplace violence or sexual harassment. Again, proper documentation and acting in a timely manner would be key.
Short-term and Long-Term Disability: Most employers have either a short-term and/or a long-term disability policy for employees that sustain non-work related injuries or illnesses. These leaves of absence, in and of themselves, are not job protected. However, in some cases, the employee may qualify for leave under the FMLA and/or the ADA. If such is the case, the rules set forth above regarding those statutes will apply to any termination decision.
As you can see, a decision to terminate any employee while on a medical leave of absence is a complex one that can involve the interplay of multiple laws and consideration of a myriad of different facts and circumstances. Employers who wish to terminate or lay off an employee while on a medical leave of absence, or shortly after returning therefrom, should always consult with an experienced Human Resources professional or Employment Attorney before deciding to do so.
If you are an employer with questions about leaves of absence, terminations or any other human resources issues, please send an email to hrhelpline@eastcoastrm.com. We will be happy to help! Please note that our helpline is for employers only. If you are an individual with questions about an employment issue, please contact an attorney for legal advice.
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