U.S. High Court Ruling Helps RMs

In a 5-4 decision, the court ruled that the department exceeded its authority by issuing a regulation penalizing employers for failing to provide timely notice. Under the department penalty rule companies could be compelled to provide an additional 12 weeks of leave.

The issue in the case?Ragsdale v. Wolverine World Wide?involves an FMLA mandate that employers grant qualifying employees 12 weeks of unpaid leave each year for specified health and family needs.

Wolverine, the employer, granted an employee, Tracy Ragsdale, 30 weeks of unpaid leave while she battled cancer. However, the company refused her request for additional leave, as well as a request to work part time, when the 30 weeks ran out.

However, the company did not notify Ms. Ragsdale that the 30 weeks of leave would count against her entitlement under FLMA.

Citing a Labor Department regulation, she filed a lawsuit against the company, demanding that it grant her an additional 12 weeks.

The regulation requires an employer to give employees written notice that an absence will be considered FMLA leave. One of the penalties for violating the regulation is any leave granted prior to the notice will not be counted against the FMLA mandate, even if the leave is more generous than the FMLA requirement.

Wolverine acknowledged that it failed to provide the required notice. However, it said that it had complied with the FMLA by granting Ms. Ragsdale 30 weeks of leave, more than twice the statutory requirement.

It asked for a summary judgment that penalty under the regulation exceeded the Labor Department's authority. Both the United States District Court for the Eastern District of Arkansas and the Eighth Circuit Court of Appeals agreed with Wolverine and nullified the penalty.

The Supreme Court narrowly affirmed the lower court rulings. In an opinion written by Justice Anthony M. Kennedy, the court said that the penalty is incompatible with the terms of FMLA.

Under FMLA, the court said, an employee must prove that the employer interfered with, restrained or denied the exercise of his or her FMLA entitlement in order to trigger the statute's remedial mechanisms.

There is no empirical or logical basis to believe that Ms. Ragsdale would have done anything differently had she received the notice, the court said.

In a dissent, Justice Sandra Day O'Connor said that the regulation should have been upheld based on agency law principles which say that decisions by regulatory agencies should be upheld by federal courts as long as the decisions are "reasonable."

In this case, Justice O'Connor said, the notice requirement and penalties represent a reasonable exercise of the authority with the FMLA grants to the Labor Department.

In a brief filed with the court supporting Wolverine, the Washington-based United States Chamber of Commerce said that Labor Department notice regulations actually discourage employers from granting leaves more generous than what is required under FMLA.

This is because employers can be punished for failing to comply with an administratively-created technical notice requirement.

"Thus, rather than providing additional leave, employers may choose simply to give employees only the federal entitlement, thereby eliminating the administrative obstacles to providing additional worthwhile benefits to employees," the Chamber said.