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Guidance On Reassigning Employees To Equivalent Positions During FMLA Leave

Published by on August 25, 2017

The decision in Waag v. Sotera shows employers how to properly reassign employees to new positions during medical leave when short-term staffing solutions are inadequate.

The decision in Waag v. Sotera shows employers how to properly reassign employees to new positions during medical leave when short-term staffing solutions are inadequate.

Congress enacted the Family and Medical Leave Act (“FMLA”) with the intention of balancing the needs of families with the needs of the workplace. 29 U.S.C. § 2601(b)(1). When an employee requires leave to tend to their or their family’s medical care, their absence may cause a disruption to their employer. In some professions, other employees in the same position may be happy to take on the additional work shifts or the duties could be temporarily reassigned; in others professions, a temporary employment agency made be able to sufficiently staff the position for the duration. But what if a critical employee, in a key role to the business, takes leave and short-term solutions are inadequate? Can the employee’s position be permanently filled during their leave under the FMLA?

The FMLA provides eligible employees with up to twelve weeks of unpaid leave per year. 29 U.S.C. § 2612(a)(1). In other words, an employee’s job is protected for up to twelve weeks. The FMLA explicitly states that, upon returning from leave, the employee must be restored “to the position of employment held by the employee when the leave commenced; or . . . be restored to an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment.” 29 U.S.C. § 2614(a)(1). Thus, upon return from FMLA leave, an employee must be given either their old job back, or one that is deemed equivalent.

In the situation of a critical employee taking leave, where short-term options simply would not be sufficient for the business, employers may fill the position, so long as a plan is in place for providing the returning employee an equivalent position upon return. The issue was recently the focus of a case before the U.S. Court of Appeals for the Fourth Circuit, which sided with the employer’s decision to fill a position of importance to the company and provide the injured employee a different position. The case, Waag v. Sotera Def. Sols., Inc., 857 F.3d 179 (4th Cir. 2017), provides further guidance to employers on what is sufficient to qualify as an “equivalent position.”

The facts of the case are fairly straightforward. Sotera was a defense contractor and was selected in September 2012 by the U.S. Army as one of the non-exclusive prime contractors for the “SSES NexGen” program to develop software solutions and support to the Army. As a prime contractor, Sotera was able to bid on software and analytic projects budgeted up to $7 billion. Thus, being awarded task orders under this project had great financial potential for Sotera.

In October 2012, Plaintiff was named Sotera’s Program Manager for NexGen work. In this position, his role was marketing business development to win task orders and cultivate relationships with the customer. His salary was not tied specifically to projects or billed to the government but was paid directly by Sotera.

On October 17, 2012, just after being named NexGen Program manager, Plaintiff severely injured his hand at home. His physician advised that he would be out of work until December 31, 2012. Plaintiff never actually had the opportunity to work on any NexGen task orders due to an injury and medical leave. It was determined, based on the length of Plaintiff’s absence, that a new NexGen Program Manager would be necessary, and soon thereafter, a new Program Manager was assigned.

Upon his return from medical leave, Plaintiff was placed in a new position to help developed Sotera’s new Electronic Warfare Program (“EWP”), which involved business development and modeling and simulation work that Plaintiff was well experienced. Plaintiff’s salary remained unchanged and not billable to the government.

Occurring at roughly the same time, Congress failed to pass a budget and the sequestration took effect, which greatly impacted defense contractors like Sotera. Sotera saw a drastic decrease in work, and came up significantly short of its 2012 budget revenue goal, resulting in a layoff of employees. In conducting the reduction in force, it was determined to focus on employees assigned to lower priority projects and whose salaries were not directly billable to the government. EWP was determined to be a lower priority project, and Plaintiff’s salary was not directly billable to the government. Therefore, Plaintiff was included in the initial round of layoffs in February 2013. The NexGen Program Manager that replaced Plaintiff during his leave was not laid off.

Plaintiff brought suit against Sotera in the U.S. District Court for the Eastern District of Virginia, alleging in part that his reassignment was not to an equivalent position and in violation of the FMLA. Judge T.S. Ellis III granted Sotera’s Motion for Summary Judgment in its entirety, holding that the position was equivalent, and Plaintiff appealed.

On appeal, the Fourth Circuit began the equivalent position analysis by looking at the relevant federal regulations: first, an “equivalent position” is “one that is virtually identical to the employee’s former position,” in pay, benefits, and “working conditions, including privileges, perquisites and status.” 29 C.F.R. § 825.215(a). Second, the position “must involve the same or substantially similar duties and responsibilities, which must entail substantially equivalent skill, effort, responsibility, and authority.” Id. Third, the employee must be reinstated to “the same or a geographically proximate worksite.” 29 C.F.R. § 825.215(e)(1). Finally, differences in the original and new position will not be enough to make the new position nonequivalent where the differences relate to “de minimis, intangible, or unmeasurable aspects of the job.” 29 C.F.R. § 825.215(f).

It was undisputed that Plaintiff’s salary and benefits remained unchanged. Further, the terms and conditions of employment remained unchanged: the worksite was the same, his title remained the same, and he continued to report directly to a Sotera Vice President. Finally, Plaintiff’s duties and responsibilities in both positions were “substantially similar” because the focus of both positions was on business development. Plaintiff unsuccessfully argued the responsibilities were not similar, including that he had been a member of the business unit’s “core management” group while NexGen PM but not after. The Court held that Plaintiff failed to explain “the purpose and function of this group or how the tangible or measurable aspects of his employment were affected by exclusion from this group,” and therefore the loss of prestige was a de minimis difference. Finding the positions to be equivalent, the Court affirmed the decision of the district court to award summary judgment in favor of Sotera.

Welter Insight

While the FMLA prohibits terminating an eligible employee for taking twelve weeks of medical leave, employers are not necessarily required to keep the position open to the detriment of the business for the duration of the medical leave. Employers should be aware that employees taking medical leave do not have an absolute right to return to the same position as prior to the leave, and that return to an equivalent position is permitted under the FMLA. An equivalent position will have the same pay, benefits, terms and conditions of employment, and substantially similar duties and responsibilities. Transfer to a different worksite is permissible if “geographically proximate.” Due to the fact-intensive nature of the determination, however, employers should be cautious in making such a decision and consult employment counsel.

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