First Circuit ruling stirs speculation over FMLA changes.

In a decision that has ignited debate about alleged ambiguities in the Family and Medical Leave Act (FMLA), the First Circuit has ruled that previous work with the same employer counts toward the 12-month period employees must have worked in order to be covered by the act. The December ruling in Rucker v. Lee Holding Co. has spurred speculation over possible changes to the law. (2006 WL 3704457 (1st Cir. Dec. 18, 2006).)

After Lee Auto Malls terminated his employment, Kenneth Rucker sued the company, alleging FMLA violations. Rucker had previously worked at Lee as a car salesman for five years and had left the company for another five years before rejoining it. Seven and a half months after returning to Lee, he ruptured a disk in his back, prompting him to seek medical treatment and take medical leave on various occasions. The company fired Rucker after he missed a total of 13 days of work because of his back injury.

A district court in Maine dismissed the case, accepting Lee's claim that Rucker was not an "eligible employee" under the FMLA because he had not met the 12-month employment requirement under [section]825.110. On appeal, Rucker argued that his break in employment at Lee did not disqualify him from FMLA benefits. The First Circuit agreed.

"[C] onsistent with the [Department of Labor (DOL) ] regulation, as interpreted by the DOL, we hold that the complete separation of an employee from his or her employer for a period of years, here five years, does not prevent the employee from counting earlier periods of employment toward satisfying the 12-month requirement," Judge Sandra Lynch wrote.

The court relied, in part, on the provision in [section]825.110 that the 12 months "need not be consecutive months." It also relied on an amicus brief the DOL filed at the court's request. In it, the agency argued that the district court's dismissal had been erroneous and that although its conclusion that a five-year break in employment precluded Rucker from meeting this requirement could be a permissible interpretation, "the department's regulation, particularly as clarified by the regulatory preamble, provided a different permissible interpretation of the provision."

"[T]he FMLA itself is ambiguous," Lynch wrote, arguing that the 12-month tenure requirement "can be read either to refer to only the most recent period of employment by the relevant employer or to all periods of employment by that employer."

Allan Townsend of Portland, Maine, Rucker's attorney, hailed the ruling as "a correct decision" but disagreed that the law is ambiguous.

"The court didn't need to go as far into the analysis as it did," Townsend said. "When the law is clear, it's best to leave it that way."

The regulatory preamble does state that while employers have urged various limitations on the provision that the 12 months need not be consecutive, there exists "no basis under the statute or its legislative history to adopt these suggestions."

Yet the DOL brief emphasized concern over limitless breaks--suggesting, among other things, that the provision can cause recordkeeping dilemmas. The agency noted that an employer may not be "able to confirm with its own records an employee's prior employment if the gap between the two periods of employment were too lengthy." Under the FMLA, employers are required to keep employment records for only three years.

"This case was a challenge for the DOL and the First Circuit because of the five-year gap," said Portland-based Elizabeth Ernst, the attorney for Lee Auto. "The court clearly saw both sides of the argument, but despite the DOL saying that this is on the border of reasonableness, the court refused to resolve the issue and said it was the DOL's responsibility."

Ernst said she expects that the DOL will work toward changing the open-ended provision, which she argues "puts employers in a difficult position to verify employment that goes way back."

"I don't think it's going to be as onerous on employers as they think it's going to be," Townsend said. "When employers hire employees, they ask for employment history. In the DOL's amicus brief, they suggested that the limit should be five years, but there's no basis in that statute for that limit. You either count the previous period of employment or you don't."

The DOL has since issued a 23-page notice requesting public comment on various FMLA issues, including "whether and how to address the treatment of combining nonconsecutive periods of service for purposes of meeting the 12 months requirement in [section] 825.110." The comment period ended February 2.

Sen. Christopher Dodd (D-Conn.) was among those who voiced apprehension about changing the law.

"As the author of the Family and Medical Leave Act, I am concerned about the Department of Labor's 'Request for Information,'" be wrote in a statement. "Any attempt to scale back the protections of FMLA would be a step in the wrong direction for America's families and for America's businesses."

Another possible effect of the ruling, said Ernst, has to do with damages. "The statute says that if an act or omission was in good faith and the employer acted in good faith, there are no liquidated damages," she said, noting that FMLA cases don't typically involve compensatory damages. "Now employers may be subject to liquidated damages for unknowingly disregarding the law."

According to DOL statistics, the number of FMLA complaint investigations has gradually decreased--down to 2,784 in 2005 from 3,565 in 2003--after a slight surge at the turn of the century. Termination of employment continues to be the primary reason that employees file a complaint--comprising at least 40 percent of cases.

Ernst anticipates that the First Circuit ruling will lead to an increase in FMLA suits. Townsend predicts the opposite. "An opinion like this should actually lead to less litigation because the law is clear now," he said.

Trial in the case is set to begin on October 1.