High Court to test FMLA - Legal Insight - employee medical leave

The Supreme Court will consider only a handful of cases this session that deal with workplace legalities. Cheryl A. Harris, a partner in the New York City office of Heidell, Pittoni, Murphy & Bach, LLP, breaks down the three employment law cases that HR professionals should keep an eye on.

The first case is Nevada Department of Human Resources v. Hibbs. What's the issue here?

This case involves the FMLA--the law where employees can qualify for up to 12 weeks of leave to care for a major illness or that of a dependent family member. The question here is whether an individual can sue a state for violation of the FMLA. Hibbs sued the Nevada Department of Human Resources after he was denied use of FMLA leave. The Nevada Department of Human Resources is claiming in its case that the FMLA is an improper exercise of congressional power--and that it violates the 11th Amendment right of states to be free from suit.

What happened then?

The lower-court judge [agreed with Nevada's argument and dismissed Hibbs's case]. Hibbs then appealed, and the court of appeals reversed the lower court. Its reasoning: There are two tests as to whether Congress can pass a piece of legislation--in this case the FMLA--that bypasses the 11th Amendment [i.e., sovereign immunity of the state].

What are the two tests?

The first test is that Congress has to have an express intention to [bypass sovereign immunity] in the piece of legislation they're acting under. The court's finding is that if you look at the FMLA, you find an express intent by Congress to have this applied to public entities as well. The second test is that [the legislation] has to be a valid exercise of congressional power. To determine that, you have to see where the exercise is coming from, which for the FMLA is the 14th Amendment. The FMLA emanates from the 14th Amendment right to allow gender rights and equality to be maintained and upheld in the workplace. Once you pass those two tests, Congress is free to pass a law, even if it means individuals can drag the state into court. That's what the appeals court said.

What will the Supreme Court consider?

The issue now up for review is whether the Supreme Court is going to agree with that argument. Or whether it will return to what the lower court ruled and say, "We agree with you, the guy has no right to take the state of Nevada to court under the FMLA."

What's the predicted outcome?

I expect the Supreme Court will uphold the finding of the appeals court. Otherwise, it would basically be saying that states are free to disobey the mandate of the FMLA, and it would be excluding a substantial amount of workers. If you want to say the FMLA doesn't offer protection to this whole group of people, that would be a stupendous ruling.

The second case is Norfolk & Western Railway Co. v. Ayers. What's at issue here?

This is an interesting case about damages. It has to do with whether an award given for emotional distress under the Federal Employers' Liability Act was properly awarded. The people who brought this claim simply alleged that they were afraid of getting cancer. They did not bring any evidence of physical manifestation or any corroboration of injury other than this amorphous fear of getting cancer. Usually the common-law principle is that in order to get damages, you have to show some physical injury. For emotional-distress damages, you have to show some rational basis for the emotional distress. In a sexual-harassment context, for instance, the woman says, "I've been sexually harassed for the last two years, and it got to the point where I couldn't function. I couldn't do my job because of the catcalls and threats. I had to get medication to calm me down." That's generally how emotional distress gets manifested. But you usually can't just say you have emotional distress. You have to [offer] some kind of proof . You have witnesses, a partner or friend, that can say you weren't able to function. You can't just say you were afraid and have that be that.

So what are the appellants saying?

They're saying, "We're appealing this award of damages because at trial they did not bring forth any kind of evidence that they suffered any outward manifestation of this emotional distress, yet they were awarded money." That's the first issue.

What's the second issue?

Apparently there was no apportionment of damages. Usually, if there are two or more people who are alleged to have caused the damage, the court is obliged to say, "This party did 70 percent of the damage, this party did 30 percent." Because often there's insurance coverage underneath these claims, and the companies need to know who's going to pay what. That's important for HR people who have to counsel companies in-house and risk managers who say, "If you take this case to trial, this is what you'd likely pay." When damages don't get apportioned, obviously the whole picture is very cloudy in terms of trying to evaluate what a case is worth and decide whether it should be settled or taken to trial.

With the third case, Clackamas Gastroenteroloqy Associates v. Wells, what's at stake?

This is an interesting case for small businesses. There are four physician shareholders of this small corporation. In order for the plaintiffs to bring an employment-discrimination case under Title VII, the company has to have 15 employees. That's the requirement of the statute. So in order to [reach the minimum requirement of] 15 employees, the plaintiff had to argue that the four shareholders should be considered employees.

Why should that concern employers?

I think small businesses will be jittery about this because normally if you're a shareholder of the business, you're not an employee. You're an owner of the business. The plaintiff is asking the court if certain circumstances pierce the corporate veil: for tax purposes the shareholders will be considered owners, and for liability purposes they'll be considered employees.

What do you predict the court will rule?

I believe it's likely going to rule that the same treatment shareholders get for the purposes of the tax code, they will get for the purposes of deciding whether the threshold has been made for bringing an employment discrimination case.

RELATED ARTICLE: FMLA Leave and the ADA

Susan Rogers, hired by New York University in January 1993, was referred to the university's in-house counseling service for psychological treatment in 1997. She took a two-week medical leave of absence, after which she returned to work. She then took another medical leave for post-traumatic stress and borderline personality disorders. After Rogers's physician opined that she would require permanent disability, the university extended her leave of absence to the 12-week limit allowed under the Family and Medical Leave Act and said she could not return without further medical certification.

Later, Rogers's physician wrote a letter to the university stating that she could return to work in "one to two months," provided that she was in an environment of "limited stress."

However, Rogers was terminated following her 12-week FMLA leave. She sued under the FMLA and the Americans with Disabilities Act.

The district court dismissed her FMLA claim, but allowed her ADA claim to proceed. "Although NYU satisfied its obligations under the FMLA, it has a separate and independent set of obligations under the ADA and state anti-discrimination laws." The court noted that ADA obligations allow "an indeterminate amount of leave as a reasonable accommodation, barring undue hardship to the employer' Rogers v. New York University, S.D.N.Y., No. 98 Civ. 2089 (9/4/02).

Impact: Employers are advised to take into account protected disabilities when considering employee requests to extend leaves of absence beyond the requirements of the FMLA.

D. Diane Hatch, Ph.D., is a human resources consultant in San Francisco. James E. Hall is an attorney with Barlow, Kobata & Denis. (Offices in Los Angeles and Chicago.)

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