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The 6th U.S. Circuit Court of Appeals affirmed a district court’s dismissal of Family and Medical Leave Act interference and retaliation claims by a terminated injured worker, but reversed the dismissal of his claims that his firing violated the Employee Retirement Income Security Act.
Robert Stein’s son Jordan, who suffers from a rare neurological condition, nearly died and Mr. Stein tore his meniscus at work less than a month later – an injury that required surgery, so Mr. Stein took medical leave to have an operation and recover, according to the decision published Monday in Robert Stein v. Atlas Industries Inc.
About 10 weeks into his recovery, Mr. Stein went in for a checkup and said he was told he would not be released to work until Aug. 10, 2014, according to court documents. However, Mr. Stein conceded he was given a release slip from the doctor’s office that released him to work as of July 20, 2014, but to perform only office work until Aug. 10, 2014. Mr. Stein gave that release slip to Atlas Industries’ workers compensation office. After that visit, the doctor’s office notified Atlas that Mr. Stein could return to work with light duty restrictions in just two days.
Atlas expected Mr. Stein to return to work the following Monday, but Mr. Stein thought he was on leave for several more weeks so he didn’t show up for work or call in for three consecutive workdays and was fired, per company policy that employees who missed three workdays without notification were subject to automatic termination.
Mr. Stein argued that his termination violated FMLA regulations that prohibit an employer from firing an employee who fails to provide notice due to “unusual circumstances,” with Mr. Stein claiming he had no idea he was released for light-duty work and that Atlas’ handbook did not require him to call in. But the appeals court rejected that argument, stating that his own confusion about his return-to-work date does not constitute an unusual circumstance.
“People make mistakes – there is nothing unusual about that,” the appeals court said in its ruling. “And for Stein, this was indeed an unfortunate misunderstanding. But it is not one that federal law can fix.”
The Atlas handbook was “unequivocal” in outlining the employee’s obligation to advise the company of any reason for being unable to work and that Atlas would terminate any employee who failed to come to work or provide notice for three consecutive workday, the appeals court added.
However, the appeals court also found that Mr. Stein provided sufficient evidence to establish pretext for his termination at the summary judgment stage, namely that his son’s medical treatments were costly for Atlas, a self-insured employer, and that several employees allegedly made comments about the impact of such costs, including the lack of raises.
Atlas said it “terminated Stein for one reason: his failure to report or call in for three consecutive days after his doctor released him for light-duty work,” the appeals court said. “But while this rationale does not run afoul of the FMLA, a reasonable juror could find that it masks Atlas’ intent to violate Stein’s rights under ERISA. Stein had worked at Atlas for nearly twenty years, had won at least one perfect attendance award and had worked overtime when asked. He seems to have been a satisfactory employee. But as the three days after his release to light duty rolled by, Atlas reached out only to Stein’s doctor and Atlas’ third-party administrator for workers compensation claims — just to double-check that Stein had really been released.”
“Although Atlas was not required to reach out to Stein … the fact that it did not do so could still raise a juror’s suspicions about Atlas’ motives,” the court continued.
In addition, Mr. Stein pointed to evidence suggesting his superiors selectively enforced the absenteeism policy by calling some employees to “ask what’s up” when they failed to show up for work, but not others.
“In combination with Atlas’ documented concerns about skyrocketing health-care costs and its managers’ purported comments about (son) Jordan’s claims, this evidence permits an inference that Atlas was motivated at least in part by its desire to be free from a medical-cost albatross,” the court said. “At trial, Stein could paint a picture suggesting that Atlas, concerned about Jordan’s medical expenses, simply bided its time and waited – Gotcha! Style – for Stein to make a mistake. And then, when he did, the company jumped at the chance to cut him loose. This is a story that, in view of the evidence, a reasonable jury could believe. So Stein should have the chance to tell it.”
One of the three judges concurred with the decision on the FMLA claims, but dissented from the majority opinion on the ERISA claims and argued that the district court’s dismissal should have been affirmed in its entirety. The judge argued that Mr. Stein did not produce evidence from which a juror could reasonably find that the supervisor who fired him knew or believed that Jordan Stein’s specific medical costs were detrimental to Atlas or that such perception motivated Mr. Stein’s firing.
A company spokesperson declined to comment.
When faced with an Employee Retirement Income Security Act class action, an employer's decision to fight or settle must be based on robust analysis and preparation. Joel Feldman, global co-leader of Sidley Austin L.L.P.'s financial services/consumer class action practice team, details the process.