HR Management & Compliance

Courts Penalize Employer for Denial of Intermittent Leave

When a court determines that an employer has interfered with an employee’s right to leave under the Family and Medical Leave Act, the monetary damages can be quite severe. While awards of front pay, back pay and attorney fees are the usual penalties paid by employers found guilty of FMLA violations, FMLA also requires an award of liquidated damages (also known as double damages) to the aggrieved employee unless an employer can demonstrate to the court’s satisfaction that the decision to deny FMLA leave was made in “good faith” and based on “reasonable grounds.”

In the case of a telephone company worker under long-term psychiatric treatment, an eight-member jury and the U.S. District Court for the Eastern District of Michigan found that an FMLA case manager made a good faith but “unreasonable” decision to deny intermittent FMLA leave to Mary-Jo Hyldahl. The case is Hyldahl v. Michigan Bell Telephone Company, No. 09-2087 (6th Cir. Oct. 31, 2012).

The infraction cost Michigan Bell Telephone Company, an AT&T subsidiary, nearly $523,000 in damages and attorney fees. The jury awarded Hyldahl more than $278,000 in back pay and front pay damages in January 2009. The district court then granted an award of $110,000 in attorney fees in August 2009, plus nearly $135,000 in Hyldahl’s post-judgment motion for liquidated damages in May 2010.

Most recently, the 6th U.S. Circuit Court of Appeals upheld the award of liquidated damages and affirmed the district court’s denial of Michigan Bell’s motions for directed verdict and new trial.

Facts of the Case

Mary-Jo Hyldahl was under psychiatric care for seven years and diagnosed with post-traumatic stress disorder and severe recurring depression, anxiety and chronic pain — serious health conditions that indisputably warrant intermittent FMLA leave.

Hyldahl’s doctors filled out medical certification forms that authorized Hyldahl up to 48 hours per month in intermittent leave. Hyldahl reportedly used more than 400 hours of FMLA leave in five years, all in an effort to ward off her worst symptoms, including dissociative periods.

In October 2006, Michigan Bell began to investigate Hyldahl’s use of FMLA leave after an attendance manager suspected Hyldahl might be improperly using her medical leave to extend her weekends.

Dr. Judith Lichenstein, a psychiatrist hired by Michigan Bell to review Hyldahl’s FMLA certifications, issued a report in November 2006 indicating that Hyldahl should be at home in bed when she is out of work on FMLA leave.

Shortly thereafter the Michigan Bell asset protection department put Hyldahl under surveillance. In the first week of December 2006, Hyldahl took FMLA leave three times, but the surveillance crew did not observe any activities that were inconsistent with FMLA leave.

On Dec. 14, 2006, however, Hyldahl used her leave time to go to the dentist, go out for lunch, get a haircut, attend a holiday party, and have dinner and drinks with a friend.

Four days later, Michigan Bell informed Hyldahl that she had exceeded her 48 hours of authorized intermittent leave for December and that she needed to submit a new FMLA certification for the Dec. 14 absence. Mental health therapist Anne Olsen sent a letter and recertification on Jan. 6, 2007.

After a thorough review of the internal investigation documents (complete with surveillance logs and video footage), Michigan Bell determined that Hyldahl’s activities on Dec. 14 were “inconsistent with an inability to perform her job functions.” On Jan. 19, 2007, Michigan Bell denied Hyldahl’s request for leave and terminated her employment for “FMLA fraud.”

Why Did Michigan Bell Lose?

The appellate court agreed with the district court that under the circumstances, “the fact that Hyldahl’s ‘treaters’ did not see or speak to her on December 14, 2006 did not render their supplemental certification invalid or unreliable.”

Instead of disregarding the FMLA recertification and disallowing leave for that day, Michigan Bell should have obtained a second, and potentially third, opinion from an independent medical professional. It should have done so to help determine if Hyldahl was suffering from PTSD and depression on Dec. 14, and whether her activities were consistent with the plan she and Olsen had developed to treat the condition. Without those opinions, FMLA does not permit Michigan Bell to disregard the certification and letter from Olsen. (29 C.F.R. §825.307)

Additional Resources

FMLA Compliance Plus

Understanding Liquidated Damages Is Key to Avoiding Them” by Peter Susser in Thompson’s HR Intelligence

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