Employer’s Honest Belief That Employee Could Not Perform Job Due to Medical Condition Justified Termination
Written by: Philip B. Phillips
An employer was justified in terminating an employee based on its honest belief that the employee could not perform his job due to his medical condition. In Degraw v. Exide Technologies (10th Circuit February 20, 2012), the employee worked as a material handler and had a history of back problems predating his employment. He took FMLA leave on a number of occasions due to his non-work-related back problems.
After returning to work from FMLA leave on one occasion, the employee complained that working mandatory overtime was aggravating his back pain, resulting in him taking more FMLA leave. The company advised him not to return to work until he received medical clearance. Several months later, the employee’s own doctor lifted his restrictions, clearing him to return to work. The company’s doctor, however, refused to release him to return to work due to his restrictions. After the company could not find another job that satisfied his restrictions, his employment was terminated.
The employee filed a lawsuit claiming 1) that he was discharged in retaliation for reporting a work-related injury (the aggravation of his back pain) in violation of Kansas workers’ compensation law, and 2) that the company retaliated against him for taking FMLA leave, interfered with his FMLA rights, and failed to restore him to his position. In seeking dismissal of the case, the company asserted it terminated the employee in reliance on its doctor’s medical opinion that the employee could not safety perform his job.
With respect to his workers’ compensation claim, the Court rejected the employee’s argument that, at the time of his discharge, his personal doctors stated he could perform the job. The Court, in affirming the dismissal of his workers’ compensation claim, stated that the operative question was not whether he could in fact have performed the material handler job, but whether his employer “honestly believed” he could not perform the job. The Court also affirmed the dismissal of the employee’s FMLA claim, concluding that a disagreement as to whether the employee could perform his job does not demonstrate pretext for terminating him in retaliation for taking FMLA leave. The Court further stated that although the FMLA entitles a person returning from FMLA leave to resume his previous position, the employee had exhausted his FMLA leave long before he was terminated. The FMLA permits an employer to terminate an employee who cannot return to work after the 12 weeks of FMLA leave have expired.
Although a disability claim was not alleged in the above case, employers should keep in mind the potential interplay between the FMLA and the ADA. The FMLA permits an employer to terminate an employee who is unable to return to work after exhausting FMLA leave, but an extended leave of absence (beyond the 12 weeks of FMLA leave) may be considered a reasonable accommodation under the ADA if the employee has a disability. Employers should evaluate potential ADA implications before proceeding to terminate an employee who has not returned to work after exhausting FMLA leave.
Employee Handbook Arbitration Agreements: Don’t Bury the Lead
Written by: Connor A. Sabatino
Arbitration agreements continue to receive growing attention after last year’s United States Supreme Court decision in AT&T Mobility v. Concepcion and this year’s countervailing NLRB decisions (Legal News: Employment Law Update (Week of January 17, 2012)). Easily lost amongst the legal disputes are some very basic guidelines for employers seeking to utilize mandatory arbitration agreements. Namely, how can an employer integrate a mandatory arbitration agreement into their employee handbook that withstands judicial scrutiny?
The primary goal is awareness and understanding — showing an employee knew what they were agreeing to, and that they agreed to it. While standalone arbitration agreements accomplish this, many employers seek to integrate the agreement into their employee handbook. Complicating matters is the wish to enforce mandatory arbitration agreements as a contract, while maintaining the common practice that an employee handbook is not in fact a contract. A few simple steps can increase the likelihood a court will enforce the arbitration agreement.
First, when working a mandatory arbitration agreement into an employee handbook, it should be clear the section at hand constitutes the actual agreement. While this may seem obvious, courts have rejected such agreements when the handbook section makes reference to “an arbitration agreement.” Courts reason that such a reference to an external document or agreement — “an arbitration agreement” — clearly implies that the alleged agreement contained within the handbook is not the actual agreement, thus the employee never actually agreed to it.
Second, when obtaining signatures on an employee handbook “receipt” or “acknowledgement” form, the form should contain its own separate section clearly identifying that the employee handbook contains an arbitration agreement and that the employee agrees to its terms (and has had ample time to review it before signing such acknowledgement). Third, a change in title to the form to use the word “arbitration,” such as an “Employee Handbook and Arbitration Agreement Receipt and Acknowledgment” form, will further support the agreement.
Fourth, to ensure the arbitration agreement does not turn the entire employee handbook into a contract, additional language in the agreement section itself, and the acknowledgment signature page, should further disclaim any intent, express or implied, for the mandatory arbitration agreement to modify the employment-at-will relationship.
Fifth and finally, just as an employer wishes to disclaim any employment contract, it does not want to go so far as to render the agreement illusory — something that can occur under various state laws if the agreement contains a provision allowing the employer to make totally unrestricted changes to the agreement at any time and for any reason. Such language is generally acceptable in an employee handbook not intended to serve as a contract; but, it is best to carve-out an exception for the arbitration agreement that limits retroactive modification, and requires notice to employees of any change, thus bringing the agreement more firmly outside the realm of an illusory contract.
Ultimately, disputes over arbitration agreements turn on the various and specific state contract laws. Employers seeking to modify their employee handbooks and arbitration agreements should seek legal counsel to ensure compliance with each state’s laws. [Note: This article does not touch on the issue of arbitration agreements applicable to class or collective actions, an area of law currently undergoing rapid change and development.]
Legal News is part of our ongoing commitment to providing legal insight to our clients and colleagues. If you have any questions about or would like to discuss these topics further, please contact your Foley attorney or the authors of this week’s issue.
