Economic Realities May Make HR Manager Liable for FMLA Violation

Darrell VanDeusen
Darrell VanDeusen

Addressing the issue for the first time, the Second Circuit has held that supervisors can be individually liable for violations of the Family and Medical Leave Act (FMLA), 29 U.S.C. §§ 2601 et seqGraziadio v. Culinary Inst. of America, 2016 U.S. App. LEXIS 4861 (2d Cir. March 17, 2016).  In so doing, the court joins other federal appellate courts that have applied the Fair Labor Standards Act’s (FLSA), “economic realities” test to determine who is an FMLA “employer,” and therefore liable for FMLA violations.

Cathleen Graziadio was fired as a payroll administrator at the Culinary Institute of America (CIA) after she took leave to provide medical care for her two sons.  She had just finished taking 10 days off to care for one son with previously undiagnosed diabetes, when her younger son broke his leg and she needed to stay home to care for him.  She supplied the appropriate FMLA certification form.  Graziadio told her immediate supervisor that she needed a (FMLA-permitted) reduced work schedule for a short period of time, but that she could return to work promptly if the schedule was approved.   She also asked whether she needed to submit any more medical documentation.

The supervisor referred the requests to the CIA’s HR manager who told Graziadio that her FMLA paperwork was insufficient; that her leave not FMLA covered; and that she could not return to work until they met.  Then Graziadio and the HR manager began what the court referred to as “an excruciating exchange,” in which the HR manager proceeded, “over any number of days, to email back and forth about scheduling a meeting without actually arranging it: [the HR manager] would ask for dates and times, Graziadio would respond that she was ‘available whenever,’ [the HR manager] would again ask for specific times, Graziadio would insist that she was ‘available any time or day,’ and so on.”  The HR manager never clarified how Graziadio’s paperwork was deficient and they never met.

Instead, Graziadio was fired.  She sued the CIA and the HR manager personally for alleged FMLA violations.  Reversing summary judgment for the defendants on the FMLA claim, the Second Circuit found sufficient disputes of fact to send the case to a jury, including whether the HR manager was Graziadio’s “employer” within the meaning of the FMLA.

The FMLA permits individual liability where the individual is an “employer,” which is defined as “any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer,” 29 U.S.C. § 2611(4)(A)(ii)(I); see also 29 C.F.R. § 825.104(d).  While a case of first impression in the Second Circuit, other federal appellate courts have looked to the definition of “employer” used in the FLSA, concluding those standards should apply.

The FLSA test asks whether the alleged employer possessed the power to control the worker in question, with an eye to the “economic reality” presented by the facts of each case.  The nonexclusive and overlapping set of factors used in this analysis include whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.  In the FMLA context, courts assessing the economic reality of an employment relationship have construed this test as asking essentially whether the putative employer “controlled in whole or in part plaintiff’s rights under the FMLA.” Noia v. Orthopedic Assocs. of Long Island, 93 F. Supp. 3d 13, 16 (E.D.N.Y. 2015).

Here, the Second Circuit found that there was substantial evidence from which a rational trier of fact could find that the HR manager was Graziadio’s “employer” in economic reality and under the FMLA.  The case was remanded for trial.

The take away from this decision?  The FMLA was enacted to establish a balance between workplace and family.  There are ways to appropriately challenge an employee’s request for use of FMLA leave.  But when managers appear to be playing fast and loose with an employee’s ability to care for herself or her family members, courts will often find against the employer.  Here, that employer may also be the HR manager, who may be found individually liable for behavior.

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