Employee Cannot Be Compelled To Use Up FMLA Eligibility During Some Disabilities

A United States Court of Appeals recently ruled that an employer violated the Family and Medical Leave Act (FMLA) 29 U.S.C. § 2601, et seq., by requiring an employee on FLMA leave to concurrently use her paid sick and vacation leave. In Repa v. Roadway Express, Inc., 477 F.3d 938 (7th Cir. 2007), the Court of Appeals concluded that a Department of Labor (DOL) regulation, 29 C.F.R. § 825.207(d)(1), precluded an employer from requiring its employee to substitute paid leave for unpaid FMLA leave where the employee was also receiving disability benefits from a health and welfare benefit plan.

Roadway employee Alice Repa had suffered a non-work related injury that required her to be absent from work for a period of six weeks. Repa applied for and was granted disability benefits for the period she was away from work. At the same time, Repa requested and was granted FMLA leave by Roadway. However, Roadway notified her that she was required to substitute any accrued paid leave for any unpaid FMLA leave during her absence from work. Upon her return from leave, Roadway paid Repa for five days of sick leave and two weeks of vacation, which she had accrued. Repa received these payments in addition to the disability compensation she received while on leave.

Repa filed suit challenging Roadway’s requirement that she use paid sick and vacation leave when she was receiving disability benefits during her FMLA leave. Based on 29 C.F.R. § 825.207(d)(1), Repa argued that because she was receiving disability benefits, the FMLA provision allowing the substitution of paid leave was inapplicable and that Roadway should restore her vacation and sick time. Roadway disagreed, and argued that the FMLA permitted employers to substitute paid leave for FMLA leave and that the DOL regulation applied only when the employee was receiving disability benefits for the birth of a child.

The Court upheld the District Court’s ruling in favor of Repa. The Court acknowledged that the FMLA guarantees qualifying employees 12 weeks’ unpaid leave each year and that the FMLA allowed employees to elect, or employers to require, that the employee substitute any accrued paid vacation, personal or family leave of the employee for leave provided under the FMLA. The Court noted that this statutorily-approved substitution was limited by DOL regulations, specifically 29 C.F.R. § 825.207(d)(1) which provides that:

“Disability leave for the birth of a child would be considered FMLA leave for a serious health condition and counted in the 12 weeks of leave permitted under the FMLA. Because the leave pursuant to a temporary disability benefit plan is not unpaid, the provision for substitution of paid leave is inapplicable. However, the employer may designate the leave as FMLA leave and count the leave as running concurrently for purposes of both the benefit plan and the FMLA leave entitlement. If the requirements to qualify for payments pursuant to the employer’s temporary disability plan are more stringent than those of the FMLA, the employee must meet the more stringent requirements of the plan, or may choose not to meet the requirements of the plan and instead receive no payments from the plan and use unpaid FMLA leave or substitute available accrued paid leave.”

The regulation also provides that “as workers’ compensation absence is not unpaid leave, the provision for substitution of the employee’s accrued leave is not applicable.” 29 C.F.R. § 825.207(d)(2).

The Court rejected Roadway’s argument that the regulation applied only to disability leave for the birth of a child because the rest of the regulation also referenced temporary disability plans. The Court held that an employer may not require an employee on FMLA leave to concurrently use paid sick and/or vacation leave where the employee is also receiving disability pay.

Employers commonly require that an employee substitute all paid leave for FMLA leave to avoid employee entitlement to more than the 12 weeks’ leave mandated by the FMLA. Under the regulation endorsed by the Seventh Circuit, if an employee is receiving outside disability benefits, the employee can extend his or her 12 weeks of leave provided under the FMLA with other paid leave offered by the employer, such as paid vacation, sick and personal days.

NOTE: Thanks to Paul Bernhart, an attorney with the Columbus, Ohio law firm of Downes, Hurst & Fishel, for writing this article and granting LRIS permission to reprint it.

This article appears in the June 2007 issue