Professional Service Agreement

Employee Placed in Different Job Upon Return from Leave, Laid Off Weeks Later is Denied FMLA Claims

May 30, 2017

Observing that the plain language of the FMLA does not require an employer to restore an employee returning from leave to his previous position no matter what, the Fourth Circuit, in agreement with the court below, rejected the contention of an employee—who was restored to a different position after leave and then laid off several weeks later—that his employer interfered with his FMLA rights by not restoring him to his pre-leave job.

Nor could a reasonable factfinder conclude that the company failed to place him in an equivalent position or that the differences between the two jobs were more than merely de minimis. The employer was also entitled to summary judgment on the employee’s claim that it interfered with his FMLA rights by reinstating him to a sham position and then firing him at the first opportunity. Finally, the court affirmed summary judgment against his FMLA retaliation claim.

Employed as a senior director of operations by Potomac Fusion, the employee maintained that title when Sotera, a defense contractor, acquired the company. Several months later, the army selected Sotera as one of the nonexclusive prime contractors for its "NexGen" software program and the employee became the project manager (PM) of the NexGen work. Sotera, however, had to outbid other contractors for the work, and during the employee’s brief tenure as PM, he had no staff or employees reporting to him on NexGen projects and his salary was paid out of Sotera’s overhead costs.

Budget sequestration. Not long after he was appointed PM, the employee severely hurt his hand and was unable to return to work for several weeks. While on FMLA leave, Sotera appointed a new PM for the NexGen project. Also shortly after he began his leave, the federal budget sequestration went into effect, resulting in substantial cuts to federal spending and a delay in the NexGen program. When the employee returned to work, he was placed under a different supervisor and tasked with helping to grow Sotera’s new Electronic Warfare Program (EWP).

Laid off. As a result of the sequestration, however, there was a drastic decrease in work and the employee was laid off. The worker who replaced him in the NexGen project, however, retained his job. The employee then sued, asserting interference and retaliation claims under the FMLA. The district court granted summary judgment in favor of Sotera on all his claims.

Failure to restore. On appeal, the employee argued that Sotera interfered with his FMLA rights by failing to restore him after he returned from leave to his former position. Disagreeing, the court pointed out that an employee who takes FMLA leave has the right to be restored either to his original position or to an equivalent position. Further, the restoration provision does not indicate a preference for restoring covered employees to their pre-leave jobs over "equivalent" positions and does not require an employer to hold open an employee’s original position while that employee is on leave. Nor was his reliance on 29 C.F.R. Sec. 825.214 helpful, as the regulation simply clarifies that an employee returning from FMLA leave may be restored to an equivalent position even if he has been replaced in his original position.

Equivalent position. As to his contention that Sotera interfered with his FMLA rights by failing to restore him to an equivalent position, the court found it undisputed his salary was identical for both jobs, he was eligible for bonuses in both positions, the employment benefits were exactly the same for both jobs, the worksite was the same before and after leave, this title remained the same, and his new duties and responsibilities were substantially similar to those of his original position. In the court’s view, "no reasonable factfinder could conclude that Sotera failed to place" the employee in an equivalent position or that the differences between the jobs were more than merely de minimis.

Termination. Also rejected was the employee’s contention that a triable question of fact existed as to whether his post-leave position was a sham, essentially scheduled to be eliminated after a few weeks. The employee could point to no actual record evidence that would permit a jury to conclude—without speculating—that the new job was a sham. Rather, the undisputed evidence showed his position was genuine and was not slated for layoffs at the time he returned from leave. Not only did he work toward winning a contract worth $70 million, a company VP was also assigned to that project and he also lost his job following the failed bid.

Retaliation. Finally, the employee argued that Sotera terminated him in retaliation for exercising his rights under the FMLA to take medical leave. Even assuming he established a prima facie case of retaliation based on the close temporal proximity between his return from leave and his termination, Sotera offered evidence that the government sequestration had a disastrous effect on the defense contracting industry, cutting federal spending on programs such as NexGen.

Further, the company missed its projected revenue during the relevant time period by $110 million and determined that drastic cuts in spending were required. To effectuate the cuts, it began laying off employees, focusing initially on workers who were not performing important strategic work that could be billed directly to the government, and thus the employee was among the first to be included in the layoffs.

While he argued that Sotera’s claim about the need to save money made no rational sense because it paid the employee who replaced him in his NexGen position more, and that employee was not terminated, this did not show pretext as he did not fit the criteria for the initial layoffs. Specifically, unlike the employee here, he was responsible for numerous additional contracts and projects, including some work that was directly billable to the government.