Firms use private eyes to track FMLA abuse

A growing number of employers are turning to surveillance to catch employees suspected of abusing the Family Medical Leave Act, some observers say.

The trend may be encouraged by a recent federal appeals court decision in Vail vs. Raybestos, which said that evidence provided by employer-paid surveillance established that a worker was working at another job while on intermittent FMLA leave (see story, page 28).

Surveillance of individuals in public places is legal, although state laws vary on allowing non-law enforcement personnel to record audio or video. Observers stress that surveillance should always be a last resort, and employers should first use other ways to catch abusers, such as medical certification.

Pitfalls to be avoided in conducting surveillance are similar to those in workers compensation cases.

Under FMLA, employees at organizations with at least 50 workers can take up to 12 weeks of unpaid, job-protected leave annually to care for a newborn, a newly adopted child or a seriously ill family member or to recover from a medical condition.

Observers note that even though it is unpaid, FMLA leave does attract abusers, in some cases because they are holding down other jobs and in others because the appeal of time off outweighs a paycheck.

These are "the same people who call in to take off Friday or a Monday, because they want the three-day weekend," said David B. Ritter, an attorney with Neal Gerber & Eisenberg L.L.P. in Chicago.

"Even if someone's taking leave on a purely unpaid basis, (there) obviously are real costs associated with employee absenteeism," said Nicholas Anaclerio, an attorney with Ungaretti & Harris L.L.P. in Chicago.

Among those saying they have seen increased employer surveillance of employees is Matthew S. Effland, an attorney with Ogletree, Deakins, Nash, Smoak & Stewart P.C. in Indianapolis who successfully represented the employer in the Vail case.

Surveillance of employees is "becoming more prevalent, particularly as more courts are addressing the issue" and approving its use when it is "done within reasonable limits and upon a reasonable basis," Mr. Effland said.

"It is something that we are seeing with increasing frequency and something that causes us concern on behalf of our clients," said plaintiff attorney Patricia A. Barasch of Schall & Barasch L.L.C. in Moorestown, N.J. "We don't think that is what the FMLA envisioned, and think it is at odds with the rights that are provided for by the FMLA."

Carl C. Bosland, managing director of the Denver-based Bosland Consulting Group, expects employers to resort to surveillance of suspect employees "more frequently than perhaps they have in the past, just as a means to try to hold down costs."

The Vail decision also may encourage employers to use surveillance more often, said Merrily S. Archer, an attorney with Fisher & Phillips L.L.P. in Denver.

However, some observers say there has not been an increase in the amount of surveillance by employers.

"I haven't seen a spike in employers using surveillance," with employers focusing instead on validity of the FMLA claim or request, said Ken Cope, Fort Lauderdale, Fla.-based practice leader for absence management delivery programs at Hewitt Associates Inc.

"I think what employers are really waiting for is the finalization of the provisions to the FMLA regulations that the (Department of Labor) has been promising," said Mary Tavarozzi, Tampa, Fla.-based principal and national practice leader in the absence and disability consulting practice of Towers Perrin. The regulations are expected to add a "lot more clarity" concerning issues that include what is considered a serious medical condition under FMLA, she said (BI, Feb. 11).

When using surveillance of employees, observers say it should be used only after other approaches less prone to liability issues are taken first.

"There are options within the (FMLA) process that employers have to be able to identify" the validity of the FMLA leave, including employers' ability to call for second and third medical opinions, said Kevin Curry, San Francisco-based senior associate for Mercer Inc.

It is also important that employers have well-grounded suspicions before launching an investigation, observers say.

"The employer should be able to easily articulate the suspicion that it has as to why...this employee (is) being surveilled," Mr. Effland said.

"Is it because of comments from other employees, who are tired of doing this person's work and have seen this person out enjoying themselves when they're supposedly out on leave? Is it because of a Friday-Monday migraine, where someone seems to get sick to utilize their FMLA, always around a weekend or holiday?" Or, said Mr. Effland, is it a case where the reason for taking FMLA suddenly disappears after the person runs out of FMLA leave?

Among anti-retaliatory provisions in current FMLA regulations is a prohibition against using aggressive surveillance or treating an employee on FMLA leave differently than other employees said David S. Mohl, an Atlanta-based senior consultant with Willis National Employee Benefits Practice. Employers cannot "use surveillance to try to discourage people from taking FMLA leave," he said.

Francis P. Alvarez, an employment attorney with Jackson Lewis L.L.P. in White Plains, N.Y., said he advises employers "to be mindful they walk a fine line between exercising their rights and being overzealous and overreaching in their invasion of an employee's privacy."

"You would never want a camera peering into someone's house," Mr. Ritter said.

To avoid violating the law, Mr. Effland recommends that employers hire trained private investigators or off-duty police offers rather than sending out someone from the security department with a video camera.

Interpreting the results of surveillance is another matter.

Mr. Bosland said employees are eligible for FMLA leave if they are unable to perform a particular essential job function. This means they may still meet FMLA's technical requirement even if they are seen engaging in activities that make it "look like they're just malingering," he said.

In addition, surveillance may not provide conclusive evidence of fraud.

"It's rare that surveillance actually will yield evidence that someone is lying about their functional limitations, because most doctors and employees will say the employees have 'good and bad moments,"' Mr. Alvarez said.

Another factor to bear in mind in surveillance is that FMLA leave often runs concurrently with other laws, including workers compensation and the Americans with Disabilities Act, which have their own anti-retaliation provisions that could lead to liability charges against the employer.

"There's a lot of different moving parts and a lot of different layers," Mr. Mohl said.

For reprints of this story, please contact Lauren Melesio at 212-210-0707 or email lmelesio@crain.com