By Louisa Johnson and Salomon Laguerre

Synopsis:  The Fourth Circuit Court of Appeals recently ruled that an employer had done nothing wrong when it (i) filled the plaintiff’s position during his leave, (ii) restored the plaintiff to a different, but equivalent, position upon his return, and (iii) separated the plaintiff six weeks later as part of a reduction in force.

A recurring issue for employers is whether to fill an employee’s position while that employee is absent on a leave covered by the Family and Medical Leave Act (“FMLA”) and, if so, what position can be offered to the employee upon return to work that will satisfy the “equivalent position” alternative requirement under the FMLA. In a recently published opinion, the Fourth Circuit Court of Appeals has provided some helpful guidance.

In Gary Waag v. Sotera Defense Solutions, Inc., No. 15-2521 (4th Cir. May 16, 2017),  the employer, a defense contractor, was selected by the U.S. Army as one of several non-exclusive prime contractors that could bid on task orders for a software solutions program.  When it was selected but before it won any task orders, the employer made the plaintiff the program manager.  Because there were no immediate task orders to bid on, the plaintiff’s first job was not program management but instead business development—building relationships with the government to best position the company to win work when there were tasks orders to bid on.

A few weeks after the plaintiff began his new role, he injured his hand and notified his employer that he would need to be absent from work for two to three months. The employer notified the plaintiff that it needed to make another employee the program manager in the plaintiff’s absence.  When the plaintiff asked what that would mean for his role upon return to work, the employer was careful to say that it was important to have someone in the program manager role in the interim to get the team up and running, and that it would “figure out what roles work best for all involved” once the plaintiff returned from leave.

The program never left the business development stage during the plaintiff’s leave because there were no task orders to bid upon at the time. Upon the plaintiff’s return, the employer placed the plaintiff in a new role to help grow a different government contract program where there were actually task orders to be bid upon.  Unfortunately, the employer did not win those bids.  Six weeks after the plaintiff’s return to work, the plaintiff’s was fired as part of a reduction in force caused by a federal budget sequestration that drastically decreased the employer’s government work and its revenue.  The program manager who had filled the plaintiff’s role during his leave was not part of the reduction in force not because he held the plaintiff’s former program manager role but because he was a critical member of other programs that were generating revenue.

The plaintiff sued for purported interference with his FMLA rights because he was not restored to his original position after his leave, he did not believe his post-leave job was an equivalent position, and he believed his new job had been a sham role that was pre-selected for the lay-offs. He also argued that his termination was in retaliation for taking leave.  The trial court ruled in the employer’s favor on all counts, and the plaintiff appealed.

In upholding the trial court’s ruling, the Fourth Circuit noted that, under the FMLA, the employer can restore an employee either to his original position or to an equivalent position. The FMLA does not indicate a preference for one option over the other, “and it does not require an employer to hold open an employee’s original position while that employee is on leave.”

The Fourth Circuit also agreed with the trial court that the plaintiff’s new position was “equivalent” to his pre-leave position because the plaintiff continued to receive his same salary of $189,000.00 and was still eligible for bonuses; continued to enjoy the same health benefits; had the same worksite; held the same job title (Senior Director); still reported to a Vice President; and had the same primary duty of business development in both roles.

The plaintiff pointed to differences in job duties of the two positions that would have existed had the employer won a task order. The Fourth Circuit did not find such differences to be material because no task orders were won before or after plaintiff’s leave that would have necessitated the plaintiff performing these additional, conditional duties. In addition, while the plaintiff contended that he was no longer part of the “core management group” as he had been before leave, the Court found that a “loss of prestige” was a “de minimis” difference that did not prevent the pre- and post-leave jobs from being equivalent.

Finally, the Fourth Circuit agreed that a mere six weeks between the plaintiff’s return from leave and employment termination may be sufficient temporal proximity to show causation for a retaliation claim. Nonetheless, the plaintiff had failed to present any evidence that the employer’s reason for the plaintiff’s separation—the disastrous effect of the federal budget sequestration on the programs on which the plaintiff had worked—was a pretext for retaliation.  In so ruling, the Fourth Circuit noted that the plaintiff had the burden of proving pretext, rather than the employer having the burden of proving that the plaintiff would have been fired even if he had not taken leave, because the employer did not fire the plaintiff while on leave.  Instead, the employer returned the plaintiff to an equivalent position after leave that the employer had shown was not slated for lay-offs at the time of the plaintiff’s return from leave.

The key takeaways from this case are as follows: (1) while employers should, when possible, keep an employee’s position open during his or her leave, employers do not have an obligation to do so under the FMLA, although the analysis may be different when the Americans with Disabilities Act (“ADA”) applies as well; (2) if an employer reinstates an employee to an equivalent position, the FMLA requires the post-leave position to be “virtually identical” to the prior position in terms of pay, benefits, status, privileges, and working conditions and substantially equivalent in terms of skill, effort, responsibility, and authority; (3) even if communications with an employee during leave do not have the intended effect of managing the employee’s expectations about post-leave employment, such communications can help in the defense of litigation; and (4) restoring an employee post-leave to an equivalent position when his or her job has been filled in the interim will usually be a more defensible approach than firing the employee while on leave.