Court Upholds Employee Termination on FMLA

In a rare ruling in support of employers, the 7th Circuit Court of Appeals recently found that employers can discipline and even terminate an employee based on problems discovered while the employee is on unpaid leave under FMLA, the federal Family and Medical Leave Act.

The U.S. Department of Labor has long held that an employee on FMLA leave must be returned to his or her job, when the leave ends. However, the department has also repeatedly ruled that an employer can take any action against an employee, that the employer would have taken anyway, had the employee not be on FMLA leave. For example, the employer can terminate an employee for gross misconduct even if the employee happens to be on FMLA leave at the time the investigation is concluded.

In short, the employer cannot take any negative job action against an employee solely because the employee uses FMLA leave. However, simply taking FMLA leave does not make the employee immune from lay offs, or from being fired for just cause. This is true, even if the employer discovers the misconduct because the employee is on FMLA.

That decision was upheld in the case of Cracco v. Vitran Express, Inc. In this case, Kevin Cracco was a service center manager for Vitran Express, a trucking company in Markham, Illinois.

Vitran Express trades on Nasdaq as VTNC and offers a full range of freight distribution services in the U.S. and Canada.

While Cracco was on FMLA leave for a serious health condition, the Vitran hired a number of temp employees to handle his responsibilities. During the course of their work, the temps uncovered a number of performance problems that Cracco had hidden during his employment, including undelivered or damaged freight, unresolved customer complaints. They also discovered that Cracco was creating liability for the company by not properly handing overtime payments.

As a result of the problems uncovered by the temps, Vitran launched an investigation. When the investigation concluded, Cracco was terminated for poor performance on the day he would have returned to work under FMLA.

Cracco filed a suit, alleging that the company was retaliating against him for using FMLA leave. The company contended – and the court agreed – that Cracco was terminated for performance problems uncovered while he was on FMLA.