RIF’ed Employee May Take FMLA Retaliation Claim To Jury

February 17, 2010 By Bill Pokorny

A recent ruling by the U.S. Court of Appeals for the Sixth Circuit serves as a useful reminder of some of the common pitfalls employers encounter when conducting reductions in force while employees are on FMLA-protected leave. Susan Cutcher worked at a Kmart store in Port Huron, Michigan. In the fall of 2005, Cutcher informed Kmart that she would need six weeks of FMLA leave while recovering from surgery. She submitted the necessary leave request forms, and Kmart approved her leave request.

While Cutcher was on leave, Kmart announced a nation-wide reduction in force. To select employees for the RIF, managers at the Port Huron store completed evaluation forms, rating employees in the same performance categories as their annual evaluations. The evaluation forms also considered employees’ most recent annual performance evaluation scores. Employees were ranked according to their scores on these forms. The six lowest-rated employees were selected for the RIF. While Cutcher had always received positive performance reviews, including an “exceeds expectations” rating on her most recent annual review just 20 days earlier, her managers graded her poorly on the RIF evaluation form. Because her score placed Cutcher in the bottom six employees at the store, her employment was terminated.

Cutcher subsequently sued Kmart in U.S. District Court, alleging that Kmart interfered with her right to reinstatement following her FMLA leave, and that she was fired in retaliation for exercising her FMLA rights. Ordinarily, an employee returning from FMLA leave must be restored to the same position that she held before the leave, or to an equivalent position. However, an employer need not restore an employee whose employment would have been terminated even if she had not taken FMLA leave.

Responding to her lawsuit, Kmart argued that Cutcher would have been included in the RIF even if she had not taken FMLA leave, and that the RIF constituted a legitimate, non-retaliatory reason for her termination. The District Court agreed, granting the company’s motion for summary judgment and dismissing Cutcher’s claims.

Cutcher appealed. Reversing the District Court’s ruling, the Sixth Circuit Court of Appeals found that Cutcher presented sufficient evidence to take her interference and retaliation claims to a jury. The Court observed that the evaluations of Cutcher’s performance for purposes of the RIF selection sharply diverged from her earlier, positive performance reviews, and that there was no documentation of any performance or conduct issues to explain this change. Moreover, the court noted that the notation “LOA” was written next to Cutcher’s name in the comment section of RIF evaluation form. While Kmart argued that this was merely meant as a reminder that Cutcher’s termination procedures would differ from other associates’, the Court found that a reasonable juror could conclude that this notation was evidence that store management considered Cutcher’s FMLA leave as a factor in selecting her for the RIF.

While this case does not establish new law, its lessons are worth reviewing. First, employers should obviously act with caution when contemplating termination of an employee who is on, has requested or has recently completed FMLA leave. While FMLA leave does not exempt an employee from a RIF, employers should always be prepared to explain why an employee was selected for a RIF. If performance is a relevant factor, employers should ensure that its reasoning is consistent with prior performance reviews, and that any performance problems or conduct issues are well-documented. Further, when preparing evaluations or other documents identifying the reasons for a RIF, employers should be cautious about any reference to an employee’s leave status, as such references can be easily misconstrued as evidence of retaliatory intent.

For more information about the FMLA, including an executive summary of the 2008 FMLA amendments and the Department of Labor’s revised regulations, please visit our FMLA website, www.FMLARegs.com. There, you can also listen and subscribe to our monthly FMLA Insights Podcast.