Use Caution Before Terminating Employees

Some states’ workers’ compensation laws allow an employer to replace an employee who is out on workers’ compensation leave if business necessities require the position to be filled. However, before terminating an injured worker, employers should consider whether any federal anti-discrimination laws are implicated.

For example, under the Family and Medical Leave Act (FMLA), an employee is entitled to up to 12 weeks per year of unpaid, job-protected leave for a serious health condition. The FMLA defines a serious health condition as an illness, injury, impairment, or physical or mental condition that involves inpatient care in a hospital, hospice, or residential medical care facility, or continuing treatment by a health care provider. At the end of an employee’s FMLA leave, the employee is entitled to be returned to the same or an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment.

Although the FMLA does not require an employer to keep the employee’s position open beyond the twelve week FMLA entitlement, the EEOC has recently taken a tough stance against inflexible leave of absence policies that call for automatic termination of employment when an employee cannot return to work upon expiration of the employee’s medical leave. In particular, the EEOC has taken the position that such automatic termination policies may violate the Americans with Disabilities Act (ADA) requirement that a request for medical leave, including extended leave, be assessed individually in a case-by-case basis. Notably, in September 2009, Sears agreed to pay $6.2 million to resolve an EEOC claim that Sears maintained an inflexible leave policy which called for an employee’s immediate termination if the employee was unable to return to work after exhausting workers’ compensation leave.

The ADA prohibits discrimination against an employee with a disability, i.e. a physical or mental impairment that substantially limits a major life activity. The ADA Amendments Act (ADAA), which took effect on January 1, 2009, adopts a broad construction of the definition of disability, and it has become increasingly more difficult for employers to argue that an injured worker is not “disabled” within the meaning of the statute. Instead the focus is on whether the employer offered reasonable accommodations. Reasonable accommodations can include job restructuring or part-time/modified work schedules, as well as leave time. Although an employer is not required to provide an accommodation if doing so would cause an undue hardship, if an employee’s medical condition or work-related injury could arguably rise to the level of a disability under the ADA, employers should analyze all available options before terminating the employee or taking any other adverse employment action.

Practice Pointers:

  • Avoid inflexible application of automatic termination policies
  • If an injured worker is unable to return to work at the expiration of his FMLA or workers’ compensation leave, explore whether extended leave may be appropriate.
  • Train managers, supervisors, and human resources personnel in the application of FMLA and ADA requirements
  • Update ADA, FMLA, and other leave policies in employee handbooks, and ensure that these policies are applied consistently in all instances.