When Are You a “Successor in Interest” Under the FMLA?
by Christi R. Adams
When is a new employer a successor in interest to a former employer under the FMLA? This was the question in front of a federal appellate court covering Washington and California, among other Western states (http://tinyurl.com/25xznp8).
Christina Sullivan sued Dollar Tree Stores, Inc. under the FMLA. To be eligible for the protections of the FMLA, Ms. Sullivan must have worked for Dollar Tree for at least 12 months; however, Ms. Sullivan had only been employed by Dollar Tree for approximately nine months. Prior to Dollar Tree, she was employed by Factory 2-U. The only way Ms. Sullivan could meet the 12-month requirement at the time of her original claim was if Dollar Tree were a successor in interest to Factory 2-U under the FMLA. If so, then Ms. Sullivan could count the time she had worked for Factory 2-U with the time she had worked for Dollar Tree.
Ms. Sullivan argued that Dollar Tree was a successor in interest because after Factory 2-U filed for bankruptcy it sold its interest in the lease of a building to Dollar Tree. Dollar Tree opened for business at the same location, and Ms. Sullivan applied for and was hired as an assistant manager for Dollar Tree. Ms. Sullivan was therefore never out of work.
Dollar Tree granted Ms. Sullivan unpaid leave after she missed work due to her mother’s health problems, but due to the absences, Ms. Sullivan ultimately either quit or was fired. Ms. Sullivan contacted the U.S. Department of Labor (DOL) and, after an investigation, the DOL concluded that Dollar Tree’s actions had violated the FMLA. Ms. Sullivan then filed her FMLA claim against Dollar Tree in court.
The FMLA does not define the term “successor in interest.” The court also did not have a lot of guidance from other courts; only one other federal appellate court in the nation (the 6th Circuit) had analyzed the successorship inquiry under the FMLA (http://tinyurl.com/23854ha). That court, like the Sullivan court, first looked to the DOL’s definition contained in the regulations, which includes a list of factors to be considered: (1) substantial continuity of the same business operations; (2) use of the same plant; (3) continuity of the work force; (4) similarity of jobs and working conditions; (5) similarity of supervisory personnel; (6) similarity in machinery, equipment, and production methods; (7) similarity of products or services; and (8) the ability of the predecessor to provide relief. Both courts focused on “balancing the equities” to determine successorship. This inquiry is intensely fact-specific in nature and much broader than is the inquiry in a strict corporate-law sense of the term. After applying the eight factors, the court concluded that Dollar Tree was not a successor in interest to Factory 2-U.
We now know that the only two federal appellate courts that have addressed the issue of successorship have adopted a broad approach. Thus, for purposes of the FMLA, your business may be a successor in interest to an employee’s former employer, whether or not you intended to be. The factors discussed above may assist you in analyzing the possibility that the company will be deemed a successor in interest to an employee’s prior employer, but the ultimate determination will be based upon a case-by-case factual determination.
For additional information on the FMLA, see the DOL’s Web page at http://tinyurl.com/2bhfrnz.
Navigating the Bermuda Triangle of Employment Leave
by Daniel A. Kaplan
One of the most difficult challenges an employer regularly faces is managing employee leaves in compliance with the ADA, FMLA (http://www.dol.gov/whd/fmla/index.htm), and workers’ compensation (WC) laws (http://www.dol.gov/dol/topic/workcomp/). The following is a simple outline for dealing with the interplay between the ADA, FMLA, and the WC laws. While it may not apply to all situations, and various state laws may affect the analysis (for example, in some states you may be required to hold an injured employee’s job for his return), it provides a good basis for approaching employee leave involving injuries or illness.
Work-Related Injuries and Illnesses
- If the condition is temporary, then it is not likely to be an ADA issue.
- Is the condition a “serious health condition”? If it is, provide FMLA leave and give FMLA notice if the employee is eligible for FMLA. Request medical certification.
If FMLA leave is not exhausted before the employee is able to return to work, then the employee is entitled to return to his/her old job upon his/her return from leave. If FMLA leave has been exhausted before the employee is able to return, then the employee is entitled to his/her old job back unless it has been filled due to business necessity (in most states). If the position has been filled, then employee is entitled to any open job for which he/she is then qualified by skills and physical condition.
If FMLA leave has been exhausted before the employee is able to return, his/her old job has been filled, and there are no open jobs for which the employee is qualified, then (in most states) the employee must be offered any newly opened jobs for which he/she is qualified until there is evidence that the employee is no longer interested in employment with the company. Many times, an employer can simply advise the employee that he/she may apply for any opening for which he/she is qualified as soon as he/she can return to work. - If the condition is permanent, same approach as above, plus accommodation issues under the ADA. The employee must be able to perform the essential functions of the position, and the employer must engage in the interactive process to explore reasonable accommodations. Remember, the employee is not necessarily entitled to his/her requested or “best” accommodation. In addition, a leave of absence may be a reasonable accommodation (where it is for a limited duration, and results in the employee returning at the end of leave to perform the essential functions of the job).
Non-Work-Related Injury or Illness
- If the condition is temporary, then it is not likely to be an ADA issue.
- Is the condition a “serious health condition”? If yes, provide FMLA leave and give FMLA notice if the employee is eligible for FMLA. Request medical certification.
Ask the employee to provide regular updates as to his/her ability to return and request that he/she check-in on a weekly/semi-weekly basis with his/her supervisor. If the employee is able to return to work before exhausting FMLA leave, and if his/her position was not eliminated while he/she was on leave, the employee is entitled to his/her old job. If the employee does not return to work before FMLA leave has been exhausted, the employee may be terminated and is not entitled to his/her old job.
- If the condition is permanent, same approach as above, plus accommodation issues. The employee should not be terminated until the employer engages in the interactive process to explore reasonable accommodations.
The employee must be able to perform essential functions of the position, and the employer must engage in the interactive process. Remember, the employee is not necessarily entitled to requested or best accommodation. In addition, a leave of absence may be a reasonable accommodation (where it is for a limited duration, and results in the employee returning at the end of leave to perform the essential functions of the job).
While the above approach will not work in all circumstance, navigating the Bermuda Triangle of employment leaves does not have to be a difficult process. Remember to approach each law separately, as if the employee is on three separate train tracks: the WC track, the FMLA track, and the ADA track. Perform all of the steps along each track and you will normally reach your station at the end.