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In a 5-4 split opinion issued March 19, 2002, the U.S. Supreme Court invalidated a Department of Labor (DOL) regulation requiring employers to give prospective notice to employees of FMLA entitlement. The regulation states, "in all circumstances, it is the employer's responsibility to designate leave, paid or unpaid, as FMLA-qualifying, and to give notice of the designation to the employee." The regulation further provides that "if an employee takes paid or unpaid leave and the employer does not designate the leave as FMLA leave, the leave taken does not count against an employee's FMLA entitlement." It is because of this penalty that the Court found the regulation invalid, holding in Ragsdale v. Wolverine that the DOL lacked the authority to compel an employer to grant more than twelve weeks of FMLA leave in one year.
In Ragsdale, the employee had been granted leave while undergoing treatment for cancer, but Wolverine, her employer, had failed to notify her that the leave would be counted towards her FMLA leave entitlement. Seven months later, still unable to work, she requested unpaid FMLA leave. Wolverine advised the employee that she had exhausted all available leave, including her FMLA entitlement and terminated her employment. The employee subsequently sued, claiming Wolverine had not designated the leave as required by the DOL regulation so her thirty weeks of leave did not count toward her FMLA entitlement. She clamed she should receive an additional twelve weeks of FMLA leave on top of the thirty she had already taken.
The Court found the penalty for Wolverine's failure to designate the leave much too harsh, stating that because the DOL regulation is directed toward employers who provide more generous benefits than required by the FMLA, "its severe and across-the-board penalty could cause employers to discontinue their voluntary programs." The DOL regulation relieves employees of the burden of proving how the failure to receive notice impaired their rights. At the same time, the regulation penalizes employers who offer greater leave benefits by denying them credit for leave granted before notice is given. Congress did not intend for the FMLA to interfere with an employer's willingness to grant its employees additional leave on top of the Act's entitlement. Indeed, the Court stated in its opinion, one of the purposes of the FMLA is to encourage employers to adopt more generous leave policies.
A strong dissent, written by Justice O'Connor with three concurring Justices, raises many concerns about the majority opinion. Individualized notice, the dissent claims, serves an important purpose under the FMLA. For many employees, an employer's individualized notice may be their first opportunity to learn that their leave is in fact protected by the FMLA. Further, the dissent held, individualized notice facilitates leave planning, allowing employees to organize their medical care or family obligations around the total amount of leave they will ultimately be provided. It also informs employees whether the employer plans to provide FMLA and employer-sponsored leave consecutively or concurrently.
The majority opinion did not indicate what the appropriate penalty for an employer's failure to give notice should be, nor when it should attach. The Court did imply that an employee might be required to make a showing of harm before an employer can be penalized. The Court's silence on these issues create the impression that penalties for an employer's neglect to give notice may eventually be imposed under the Act, just not the penalty of additional leave entitlement. Twelve weeks is both the minimum and the maximum of leave required under the FMLA.
For Wisconsin employers this decision, from a practical standpoint, has little impact. Employers should still provide notice to employees of their FMLA entitlement, not only to avoid any potential liability if the employee is able to show harm from the lack of notice, but also because it provides employers with the opportunity to:
- Request certification of the employee's serious medical condition to validate the necessity of the leave.
- Allow for advance planning to schedule a replacement for the employee to ensure less disruption of the employer's daily activities.
The sharply divided Court's decision in Ragsdale leaves us with many questions, few answers, and little doubt that the issue of an employer's obligation to provide notice to an employee under the FMLA will be revisited sometime in the future.
For more information, please call (414) 423-1330 or e-mail educational services.
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