Terminating an Employee on Medical Leave: Timing is Everything

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April 16, 2018
Author: Lorman Education

To avoid a claim that the employer discriminated against the employee, or that the employer interfered with the individual’s rights under the FMLA, the employer must be able to show that the employee would have been terminated even if that individual had not taken medical leave.  Generally, the reason for the termination should occur relatively close in time to the decision to terminate the employee.  Often, the longer the time period between those two events, the less reasonable the termination decision will appear, and the more likely it will be viewed as retaliation for taking leave or interference with an individual’s FMLA rights, both of which are prohibited conduct under the FMLA.

Performance Related Problems

Companies sometimes terminate an employee who has requested leave or who has been out on medical leave based on that person’s poor job performance prior to taking FMLA leave.  In many instances, termination of a poor performer only after medical leave has been requested will be viewed as retaliation under the FMLA and/or as interference with that individual’s statutory FMLA rights.  The problem is that the employer was already aware of the employee’s shortcomings before leave was requested, but failed to take any action to correct those issues.  Very often, poor performers receive good performance reviews, which makes it even more difficult to assert that he or she would have been terminated had leave not been requested.  At that point, it is too late to try and correct the record, and the employee should probably be allowed to return to his or her job.

Nevertheless, major company violations, fraud or acts of dishonesty discovered only after the employee begins medical leave may be relied upon to support an argument that the employee would have been terminated regardless of the medical leave.  An example of evidence sufficient to support termination during leave was presented in the recent 7th Circuit court opinion in Cracco v. Vitran Expess, Inc.  Briefly, Kevin Cracco was a service manager for a trucking company, Vitran Express, Inc.  Several employees hired to replace Mr. Cracco while he was out on medical leave discovered that Mr. Cracco had falsified records to cover up that freight deliveries were damaged, incomplete or had been delivered late.  In addition, safety concerns and customer complaints were discovered, and overtime was not being handled properly.  The 7th Circuit agreed that although Mr. Cracco’s performance reviews had been good, the newly discovered evidence was sufficient to justify the company’s decision to terminate him.

Other Valid Reasons for Termination

In addition to newly discovered evidence of serious performance issues, employers may lay-off employees out on medical leave without violating the FMLA if a reduction in force results in that employee’s entire department or division being eliminated, or the employer can show that all similarly situated employees are being eliminated.  Otherwise, the fact that an employee on medical leave is chosen to be included in the lay-off may be viewed as retaliation.  Companies must also take steps to send all required notices (including those who are out on leave but remain on the payroll) if the federal Worker Adjustment and Retraining Notification Act (WARN) (and/or similar state provision) applies to the reduction in force.

Individuals unable to return to work after the expiration of the medical leave period may be terminated.  An employer must make sure that other forms of leave and/or statutory protections do not apply.  In addition, the employer must evaluate whether an employee who requests leave because of his or her own serious health condition is not entitled to a reasonable accommodation under the Americans with Disabilities Act (ADA), which would allow the employee to perform the essential functions of his or her job.

Suggestions for compliance

If you are considering terminating an employee who has requested medical leave or who is out on medical leave, make sure your reasons are justified.  Consult with a professional to make sure you follow the correct procedures and that the evidence will support the conclusion that the employee would have been terminated regardless of whether medical leave was requested.  Some other practice tips are as follow

  • Perform honest performance evaluations.  Avoid glowing reviews despite known performance problems.
  • Take action to address performance problems when they occur.  Do not wait until an employee requests leave to get serious about taking corrective action.
  • Include handbook provisions that provide for immediate termination for serious policy violations, acts of dishonesty, fraud and the falsification of documents.
  • Apply company rules consistently so that all employees are subject to the same disciplinary procedures for similar

The information contained in this article is not designed to address specific situations, and does not include rules and regulations that apply to all states.  If you have questions concerning this topic, you should consult with legal counsel of your choice to obtain advice on various fact specific matters.

Robin Foret practices in the areas of employment law, commercial litigation and specialty insurance defense claims. She handles a variety of employment matters such as theft of trade secrets, breach of employment agreements, non-competition agreements, wage and hour issues under the Fair Labor Standards Act (FLSA), discrimination and harassment issues under Title VII of the Civil Rights Act of 1964 (Title VII) and the Texas Commission on Human Rights Act (TCHRA), the Americans with Disabilities Act (ADA), Family Medical Leave Act (FMLA) issues, and the Sarbanes-Oxley Act (SOX). Robin has handled a wide variety of employment law matters for employers, as well as for executive-level employees, before agencies, and state and federal courts.

Lorman Education Services is a leading provider of continuing education seminars, live webinars and ondemand courses.  If you would like to receive more information on training events in your area, visit www.lorman.com today.

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