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Court Finds HR Director May Be Individually Liable for Violation Under FMLA

Published by and on May 10, 2016

Human resource professionals may assume that their risk of individual liability for labor law violations is generally limited when they act on behalf of their employer. A recent FMLA case suggests otherwise.

A recent case involving an FMLA claim demonstrates that human resource professionals acting in their official capacity can be found individually liable for labor law violations.

In Graziadio v. Culinary Institute of America, the United States Court of Appeals for the Second Circuit found that an employer’s Director of Human Resources could be individually liable for violation of the Family Medical Leave Act (“FMLA”).

In this case, the plaintiff was employed by the Culinary Institute of America when she took a leave of absence to provide medical care for her sons. For about one month, the plaintiff and the Culinary Institute’s Director of Human Resources exchanged e-mail communication regarding the validity of the plaintiff’s leave under the FMLA, the certification necessary for the plaintiff to return to work, and her anticipated return to work date.

The plaintiff’s attorney subsequently communicated with counsel for the Culinary Institute for another month regarding the plaintiff’s leave and return to work. The Culinary Institute then terminated the plaintiff’s employment for abandoning her position when her attorney did not respond to a letter sent by counsel for the Culinary Institute within 12 days. The plaintiff filed a complaint in the Southern District of New York, alleging interference with FMLA leave and FMLA retaliation, among other claims, against the Culinary Institute, the Director of Human Resources, and another employee. The trial court dismissed the claims against the HR Director and the other employee at the summary judgment stage, finding that neither qualified as an “employer” subject to liability under the FMLA.

The Second Circuit, however, reversed on appeal as to the HR Director, finding that under the FMLA, an individual may be held liable if the individual is considered an “employer,” which is defined as “any person who acts, directly or indirectly in the interest of an employer to any of the employees of such employer.” In applying this definition, the Second Circuit applied the economic realities test — the standard applied by court for determining “employers” under the Fair Labor Standards Act (FLSA).

Under this test, the Second Circuit looked at whether the individual “possessed the power to control the worker in question” by considering the following nonexclusive and overlapping factors: (1) whether the alleged employer had the power to hire and fire employees; (2) whether the alleged employer supervised and controlled employee work schedules or conditions of employment; (3) whether the alleged employer determined the rate and method of payment; and (4) whether the alleged employer maintained employment records. In the context of the FMLA, the Second Circuit stated that this test essentially asks whether the alleged employer “controlled in whole or in part plaintiff’s rights under the FMLA.”

In applying these factors, the Second Circuit found that although the plaintiff’s termination was not ultimately authorized by the HR Director, she did appear to have “played an important role in the decision” to terminate the plaintiff. The Second Circuit also found that the HR Director exercised control over the plaintiff’s schedule and conditions of employment, at least with respect to her FMLA leave, as Human Resources alone handled any employee’s return to work after FMLA leave or any leave that required an accommodation.

Neither party presented evidence regarding whether the HR Director determined the rate or method of pay, but the Court did find that the “maintenance of employment records” factor weighed in favor of the HR Director since the payroll department normally administered routine FMLA leaves.

Ultimately, the Second Circuit concluded that a rational jury could find, under the totality of the circumstances, that the HR Director exercised sufficient control over the plaintiff’s employment to be subject to liability under the FMLA, and therefore vacated the district court’s dismissal of the HR Director.

Welter Insight:

This case should serve as a serious reminder to Human Resources professionals involved in making decisions regarding FMLA leave that they may be found personally liable for violations of the FMLA. As a result, Human Resources professionals should proceed with caution and in good-faith in administrating leave under the FMLA and strictly comply with all FMLA requirements. Human Resources professionals should consult with counsel if they have any questions regarding the FMLA’s application to a specific employee.

Image Credit: Andrew Wippler (Flickr @ Creative Commons)

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