The Seventh Circuit Confirms that Protected Leave under the FMLA is Not an Absolute Right Prohibiting Termination of Employment

By Jordan Brickman

On March 9, 2022, the Seventh Circuit[1] affirmed the District Court’s finding that termination of employment based on discovery of the employee’s performance issues while she is on protected leave under the Family Medical Leave Act (“FMLA”) 29 U.S.C. § 2601 et seq. does not constitute FMLA interference[2] or FMLA retaliation.[3]

On January 4, 2017, Anderson began working as a Pre-Fund Underwriting Auditor for Nations Lending Corp. (“NLC”), a residential mortgage lender. In reviewing loan applications, she ensured that the loan met established requirements. Soon after her employment began, however, Anderson began experiencing multiple health issues, and exhausted her available sick leave. Additionally, Anderson’s supervisor noticed several errors in her work, uncharacteristic of a 20-year veteran in the field and began an informal record of these errors beginning in January 2018.

On March 19, 2018, Anderson experienced increased health concerns, and began an extended leave of absence provided under the FMLA. Four days after she began her leave, the employer’s internal audit system flagged several errors in her work. Shortly thereafter, the U.S. Department of Housing and Urban Development notified the employer of two additional errors that Anderson made in the year prior. In May of 2018, with Anderson still on FMLA leave, the employer opened an internal investigation into Anderson’s performance. Anderson returned from her protected leave on June 11, 2018 and was terminated on June 15, 2018, following completion of the investigation which found a number of performance errors.

Seventh Circuit’s Analysis

Under the FMLA, upon an employee’s return from protected leave, the employee is entitled to restoration to the same or an equivalent position that she held before she took the leave.[4] Interfering with the employee’s restoration is a violation of the employee’s rights. However, this is not an absolute right.[5] The Seventh Circuit rejected the plaintiff’s FMLA claims of interference and retaliation, holding that “[a]n employee is not entitled to return to her prior position if she would have been terminated regardless of whether she took FMLA leave.”[6] The employee in Anderson, had a pattern of poor performance prior to her FMLA leave, which became apparent through an investigation triggered by the company’s audit system, and conducted while the employee was on FMLA leave.[7] The Seventh Circuit determined that even without a formal record of poor performance, the internal audit system would have discovered the employee’s mistakes regardless of whether she was in office, or on leave.[8] As such, the court confirmed that FMLA leave does not provide unlimited protection for employees and does not overcome an employer’s decision to terminate an employee based upon a pattern of poor performance.[9]

Takeaway

In finding for the employer, the Seventh Circuit heavily relied on (1) the company’s well-documented record of Anderson’s poor performance prior to her leave, and (2) that the decision to terminate Anderson was made after the performance investigation was completed, ultimately concluding that the employee’s termination did not violate her rights under the FMLA. Please contact our firm to help provide assistance in determining the best way for your company to address these claims.

[1] Anderson v. Nations Lending Corp., 27 F.4th 1300 (7th Cir. 2022).

[2] To prevail on an FMLA interference claim, she must establish that: (1) she was eligible for the FMLA, (2) her employer was covered by the FMLA, (3) she was entitled to leave under the FMLA, (4) she provided notice of her intent to take leave, and (5) her employer denied her FMLA benefits to which she was entitled. See Anderson, 27 F.4th at *3, citing Lutes v. United Trailers, Inc., 950 F.3d 359, 363 (7th Cir. 2020).

[3] Retaliation claims under the FMLA require three familiar elements: (1) the employee engaged in statutorily protected activity; (2) the employer took adverse action against the employee; and (3) the protected activity caused the adverse action. See Anderson, 27 F4th at *5, citing Freelain v. Vill. of Oak Park, 888 F.3d 895, 901 (7th Cir. 2018).

[4] 29 U.S.C. § 2614(a)(1)(A)–(B).

[5] Anderson, 27 F4th at *1.

[6] See Breneisen v. Motorola, Inc., 512 F.3d 972, 978 (7th Cir. 2008).

[7] Anderson, 27 F4th at *4-5.

[8] Id. at *4.

[9] Id.