By Erin Dougherty Foley and Craig B. Simonsen

In an opinion last week, the Second Circuit ruled that a company’s human resources (HR) director could be held individually liable for Family and Medical Leave Act violations.

The Court said that the HR director had enough control over an employee’s job and enough input into her firing to qualify her as an “employer” under the statute!  Graziadio v. Culinary Institute of America, Shaynan Garrioch, and Loreen Gardella, No. 15-888-cv (March 17, 2016).

We have blogged previously on other important FMLA policy and case law, including Employer Beware: The FMLA Can Reach Further Than You May Think, New Guidance From The EEOC Requires Employers To Provide Reasonable Accommodations Under The Pregnancy Discrimination Act, Employer Intent Is Immaterial In FMLA Interference Claims, and The Family and Medical Leave Act: 10 Years Later.

In the facts of this case, as explained by the Court, the plaintiff took FMLA leave to care for her son, and then took additional leave a few weeks later when her second son broke his leg. During the plaintiff’s second term of absence, the employer took issue with the paperwork supporting the leave request, and refused to allow her to return until she provided new documentation. Communication between the plaintiff and the employer broke down, and ultimately the employer fired the plaintiff for abandoning her job. The plaintiff subsequently sued the employer and two of her supervisors alleging interference and retaliation under the FMLA, and discrimination under the Americans with Disabilities Act (ADA).

At the District Court, summary judgment was granted to the employer. The District Court found that the plaintiff could not establish that she was wrongfully denied FMLA leave, or that the employer’s actions were retaliatory or discriminatory. Importantly in this case, the District Court dismissed the plaintiff’s individual FMLA claims against the HR employees, finding that neither employee qualified as an “employer” subject to liability under the FMLA. Graziadio v. Culinary Inst. of Am., No. 13 Civ. 1082 (NSR), 2015 WL 1344327 (S.D.N.Y. Mar. 20, 2015).

The District Court also determined that the plaintiff could not sustain her claims of FMLA interference because she had “not been denied any leave to care for [her son] and, having failed to submit a medical certification form, had no entitlement to leave to care for [her second son].” In addition it rejected the plaintiff’s FMLA retaliation and ADA discrimination claims, finding that the employer had proffered legitimate reasons for the termination—namely, plaintiff’s failure to comply with FMLA certification requirements and her failure to contact her supervisor to return to work, and she had not shown these employer reasons to be pretextual.

Opposite, the Second Circuit concluded that the plaintiff had presented genuine disputes as to material fact with respect to her claims of FMLA interference and FMLA retaliation, but it agreed with the District Court that the plaintiff failed to provide evidence supporting a claim of discrimination under the ADA.

As to individual employee liability for the HR director, the Circuit Court noted that:

An individual may be held liable under the FMLA only if she is an “employer,” which is defined as encompassing “any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer,” 29 U.S.C. § 19 2611(4)(A)(ii)(I); see also 29 C.F.R. § 825.104(d).

The Court indicated that the Second Circuit had not yet tested the “contours of this provision,” but that several of other circuits, as well as district courts within the Second Circuit, had observed that the “FMLA’s definition of ‘employer’ largely tracks the definition of ‘employer’ used in the Fair Labor Standards Act (FLSA), 29 U.S.C. § 203(d), and have come to the reasoned conclusion that the standards used to evaluate ‘employers’ under the FLSA should therefore be applied to govern the FMLA as well.” The Court cited to Haybarger v. Lawrence Cty. Adult Prob. & Parole, 667 F.3d 408 (3d Cir. 2012), Modica v. Taylor, 465 F.3d 174 (5th Cir. 2006), Wascura v. Carver, 169 F.3d 683 (11th Cir. 1999), and Santiago v. Dep’t. of Transp., 50 F. Supp. 3d 136 (D. Conn. 2014), and agreed “with these courts and apply the economic-reality test used to analyze individual liability in the FLSA to the FMLA case before us.”

While the employer’s Vice President of Administration and Shared Services (VP) retained “ultimate termination authority,” the Court found that the VP had merely “directed th[e] issue to [his subordinate] for handling.” In testimony the subordinate HR director described her role in the “termination as a joint ‘decision that was made between myself and [the VP].” Additionally, the HR director had exercised control over the plaintiff’s schedule and conditions of employment relating to her return from FMLA leave.

Specifically, the Court found that the HR director: (a) reviewed plaintiff’s FMLA paperwork; (b) determined its adequacy; (c) controlled plaintiff’s ability to return to work and under what conditions; and (d) sent nearly every communication regarding her leave and employment (including the letter that ultimately communicated her termination). As such, a “rational jury could find, under the totality of the circumstances, that [the HR director] exercised sufficient control over [plaintiff’s] employment to be subject to liability under the FMLA.”

As to the FMLA violation, the Court noted that “we cannot help but note, however, that in making this still rather oblique request, [the HR director] studiously avoided responding to any of [the plaintiff’s] pleas for clarification on ‘what [paperwork] you would specifically like me to obtain’ and for transmission of any 6 specific desired FMLA forms. And such unresponsiveness may itself run afoul of the FMLA’s explicit requirement that employers ‘responsively answer questions from employees concerning their rights and responsibilities under the FMLA’.”

The Court concluded that “in light of our conclusion that a jury can find that [the employer] interfered with [the plaintiff’s] leave, the first of the district court’s grounds no longer supports a grant of summary judgment.”

In light of this startling Circuit Court opinion, employers may wish to consider the ramifications of this case as they analyze their organizational structure, chain-of-command, policy, procedures, and training systems. It’s one thing to deliberately decide as a business to subject lower level managers to individual employer liability, but something quite else for it to happen accidentally.