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Sixth Circuit Rules
on FMLA Claim
By Jeffery J. Kros, Esq.
WORLDATWORK
I
Different states may
have to abide
by different
interpretations of
the law because
federal district courts
must abide by
decisions of the circuit
courts that have
jurisdictions over them.
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n July 2004, the 6th Circuit Court of
Appeals handed down a decision that
clarifies how hours-of-service can be
applied to claims under the Family and
Medical Leave Act of 1993 (FMLA). The
decision runs counter to a 2002 decision
by the 1st Circuit Court of Appeals. The
conflicting decisions set up a potential
showdown in the U.S. Supreme Court.
But, until then, different states may have
to abide by different interpretations of
the law because federal district courts
must abide by decisions of the circuit
courts that have jurisdictions over them.
The 1st Circuit has jurisdiction over district courts in Maine, Massachusetts,
New Hampshire, Puerto Rico and Rhode
Island. The 6th Circuit has jurisdiction
over federal district courts in Michigan,
Ohio, Kentucky and Tennessee.
Ricco v. Potter
The decision from the 6th Circuit originates from a case brought by Doreen
Ricco against her former employer, the
U.S. Postal Service. Cited as Ricco v.
Potter, the defendant refers to John E.
Potter, the postmaster general at the
time of the claim.
Ricco was hired by the postal service in
1993 to work at its mail facility in
Cleveland. In December 1997, her
employment was terminated. Ricco filed
a timely grievance against the termination and proceeded to an arbitration
hearing. The arbitrator agreed with Ricco
that termination was too harsh and, in a
February 1999 award, converted the
postal service’s action to a 30-day suspension. The arbitrator also required
that Ricco be reinstated as long as she
passed a fitness-for-duty examination.
She passed the examination and was
returned to work with full credit for
years of service for seniority and
pension purposes.
After returning to work in 1999, Ricco
began suffering from migraine
headaches and depression after the
death of her husband. Due to her condition, she requested intermittent leave of
absence. In May 1999, Ricco requested
FMLA leave, which was denied. The
postal service concluded that Ricco did
not fulfill the 1,250 hours-of-service
requirement and was, therefore, ineligible for FMLA leave.
In October 1999, the postal service
once again fired Ricco, this time for failing to maintain a regular work schedule.
An arbitrator agreed with the postal
service in a 2001 award, but also stated
that arbitration was not the proper
forum to litigate FMLA violations. As
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such, and because FMLA violations are a
matter of federal law, Ricco brought the
action in federal court in Ohio.
The federal district court in Cleveland
adopted a decision from the 1st Circuit
Court that the hours-of-service requirement contained in the FMLA includes
only hours during which an employee
performed actual work, not hours for
which an employee was compensated
pursuant to an arbitration award.
Because she did not actually work the
required 1,250 hours in the previous 12
months, the district court dismissed
Ricco’s claim.
The FMLA
Under the FMLA, an action may be
brought within two years of the date of
the last event that precipitated the
alleged violation. However, the act allows
an action to be brought within three
years of the last event that constituted
the alleged violation. Ricco’s employment
was terminated on Oct. 15, 1999, and
she brought the action to federal court
nearly three years later. Therefore, her
claim is time-barred by the statute of
limitations unless she proves the postal
service willfully violated the FMLA.
Under the current court precedent, an
employer commits a willful violation of
the FMLA when it acts with knowledge
that its conduct is prohibited by the
FMLA or with reckless disregard of the
FMLA’s requirements. Therefore,
whether an employer acted willfully is a
factual question. In her complaint, Ricco
alleged that the postal service acted negligently, willfully and maliciously when it
violated her rights under the FMLA. As
such, the 6th Circuit concluded that her
claim was not time-barred by the statute
of limitations.
FMLA Interpretation
The FMLA entitles eligible employees to
12 weeks of unpaid leave during any
12-month period for certain statutorily
prescribed reasons. The FMLA defines
“eligible employee” as an employee who
has been employed:
• For at least 12 months by the employer
from whom leave is requested
• For at least 1,250 hours of service during the previous 12-month period.
The FMLA does not define “hours of
service,” but defers the issue to the Fair
Labor Standards Act of 1938 (FLSA).
However, the FLSA also fails to define
the term “hours of service.” But in its
definition of “regular rate” standards, the
FLSA does provide the rate at which
employees must be compensated for
engaging in overtime work. “Regular
rate” does not include, among other
things, “payments made for occasional
periods when no work is performed due
to vacation, holiday, illness, failure of the
employer to provide sufficient work or
other similar cause; reasonable payments
for traveling expenses or other expenses
incurred by an employee in the furtherance of his employer’s interests and
properly reimbursable by the employer;
and other similar payments to an
employee which are not made as compensation for his hours of employment.”
The regulations applicable to the statute
explain that the “regular rate” of compensation does not include the types of
absences that are infrequent, sporadic or
unpredictable.
Therefore, when determining “hours of
service” under the FMLA, employers are
obliged to adhere to the “regular rate”
standards under the FLSA. If an
employee would not be entitled to
overtime compensation because an
employee received payment outside of
his or her “regular rate” calculation, then
payments under those circumstances
also prevent an employee from counting
that compensation as “hours of service”
under the FMLA.
The Arguments
Ricco’s contention was that the district
court erred when it adopted the ruling of
the 1st Circuit, which concluded that the
hours-of-service requirement means only
hours that an employee performed actual
work, not hours for which an employee was
compensated pursuant to an arbitration.
The postal service argued that the
FMLA and FLSA adequately define the
term “hours of service,” which does not
include time for which an employee was
paid but did not actually work. It further
argued that allowing Ricco to include
those hours that an employee is deemed
to have worked pursuant to a makewhole award issued by an arbitrator
undermines the FMLA’s purpose of
allowing employees to take reasonable
leave in a manner that accommodates
the legitimate interests of the employer.
Ricco argued that neither the FMLA nor
the FLSA defined the term “hours of
service,” but that the FLSA only defines
“regular rate.” However, given that definition, she contended she was wrongly
terminated and compensation awarded to
her by an arbitrator for this reason should
not be excluded from the “regular rate”
definition. Ricco further urged the court to
clearly define “hours of service” as including make-whole awards from an arbitrator.
The Conclusion
The 6th Circuit agreed with Ricco. It
concluded that within the “regular rate”
exclusions under the FLSA, hours an
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employee would have worked but for
her unlawful termination are different
from occasional hours of absence due to
vacation, illness, etc., in that those are
hours that the employee wanted to
work but was unlawfully prevented
from working by the employer.
Therefore, the FMLA’s “hours of
service” definition is properly served
by including those hours. Further,
the court reasoned that preventing an
employee from satisfying the hoursof-service requirement through an
unlawful termination improperly
rewards employers for their unlawful
conduct.
The court noted that back-pay awards
under the FLSA often include payment
for overtime work that an employee
would have performed but for the
employer’s violation of employment
laws. The court further noted that
although “regular rate” calculations are
necessary for determining an
employee’s rate of overtime pay, they
are completely inadequate for determining how many hours an employee
would have worked but for the unlawful
termination. Back-pay awards for an
unlawful termination are typically
based on the employee’s work history.
The court reasoned that when calculating
the hours-of-service requirement under
a make-whole award, the determination
of how many hours an employee would
have worked but for the unlawful
termination should also be based on
employment history.
The 6th Circuit Court then reversed
the district court’s ruling that makewhole awards do not count toward
FMLA eligibility and remanded the case
back to trial. The 6th Circuit instructed
the district court to determine the
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number of hours that Ricco would have
worked but for her unlawful termination
in order to ascertain her eligibility
under the hours-of-service requirement
for FMLA leave.
Because this issue is not resolved,
WorldatWork will continue monitoring
all developments and keep members
informed of pertinent changes.
ABOUT THE AUTHOR
Attorney Jeffrey J. Kros, Esq., is a public affairs project
manager with WorldatWork. He can be reached at
[email protected] or 480/922-2027.