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Third Party FMLA Leave Administrator May Face Liability For FMLA Violation

Published by on March 28, 2013

In Arango v. Work & Well, Inc., Case No. 1:11-cv-01525 (ND Ill. March 15, 2013), a district court has recently ruled that a former employee’s claim against his employer’s third party leave administrator for tortious interference with employment relationship could proceed to trial and was not entitled to summary judgment.  More after the break. Plaintiff […]

In Arango v. Work & Well, Inc., Case No. 1:11-cv-01525 (ND Ill. March 15, 2013), a district court has recently ruled that a former employee’s claim against his employer’s third party leave administrator for tortious interference with employment relationship could proceed to trial and was not entitled to summary judgment.  More after the break.

Plaintiff was employed for Sysco Chicago, Inc. (“Sysco”).  Defendant Work & Well, Inc. (“Work & Well”) was Sysco’s third-party administrator for leave under the Family Medical Leave Act (“FMLA”).  In 2010, Plaintiff requested an eight-week leave pursuant to the FMLA.  In connection with his request, Plaintiff submitted medical certification demonstrating the need for leave from November 22, 2010, through January 15, 2011.  Work & Well accepted the certification and approved the request in part, but granted Plaintiff only four weeks of leave from November 22 to December 18.  Work & Well told Plaintiff that his leave would not be extended past December 18, unless his doctor submitted additional information by December 25.  Plaintiff’s doctor did not submit additional information to Work & Well until January 17, by which time Sysco had already decided to terminate Plaintiff’s employment.  Plaintiff’s termination was effective January 17.  Plaintiff alleged that Work & Well wrongly told Sysco that he was not entitled to the last four weeks of leave that he requested.

Plaintiff initially plead the matter as a proposed class action of current and former Sysco employees who claimed that Sysco (through Work & Well) violated the FMLA by insisting that employees provide more medical information than is legally required by the FMLA.  Earlier in the matter, the district court dismissed all FMLA claims against Work & Well pursuant to FMLA regulations that exclude third party administrators from being liable for FMLA violations where the third party administrator simply performed administrative functions as part of the leave process.  The district court also struck all class allegations.  Plaintiff, however, argued that Work & Well should still be liable because it tortuously interfered with his employment relationship with Sysco by denying a portion of his FMLA leave even though it was supported by medical certification.  In response, Work & Well moved for summary judgment on Plaintiff’s tortious interference with employment relationship claim.

The district court denied Work & Well’s motion for summary judgment.  First, the district court held that Plaintiff’s claim for tortious interference with employment relationship under State law was not preempted by the FMLA as it did not conflict with the FMLA’s goals of balancing employees’ personal demands with accommodating employers’ legitimate interests.  The district court acknowledged that other courts have held that FMLA-based tort claims were preempted.  The district court, however, distinguished those claims as being asserted against the FMLA employer, rather than a party that is exempt from FMLA liability.

The district court also held that Plaintiff presented a genuine issue of fact as to whether Work & Well abused, and thus waived, its “consultant’s privilege” from tortious interference claims under Illinois law.  The district court relied upon Work & Well’s promise to Sysco that it would “ensure” complete FMLA compliance to infer that Work & Well knew what kind of information the FMLA permitted it to obtain from an employee and when it was permitted to obtain such information.  Despite this knowledge of the law, Work & Well implemented a “two-step certification process” whereby employees were only approved for leave in increments of four to six weeks, regardless of the amount supported by the medical certification to “reduce STD/FMLA usage” by employees.  As a result, Plaintiff alleged that Work & Well accepted Plaintiff’s medical certification for eight weeks of leave, but only approved plaintiff for four weeks of leave in violation of the FMLA.  The district court found these allegations sufficient to raise a genuine issue of material fact as to whether Work & Well was entitled to the consultant’s privilege as the evidence suggested that Work & Well intentionally denied Plaintiff’s meritorious FMLA leave request to enhance its reputation as a third party leave administrator and “increase its book of business.”

To view the district court’s memorandum opinion and order, click here.

Employers and third party leave administrators should view this decision as an opportunity to review their FMLA policies and procedures to ensure that their leave request form elicits the necessary information to evaluate a leave request, as well as make sure that they are not requesting more information than is allowed by the FMLA’s regulations.  Employers should keep in mind that they are generally liable for their third party leave administrator’s actions.

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