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Second Circuit Sets Standards for FMLA Individual Liability and ADA Associational Discrimination
Practical Law Legal Update w-001-6443 (Approx. 7 pages)
Second Circuit Sets Standards for FMLA Individual Liability and ADA Associational Discrimination
by Practical Law Labor & Employment
| Published on 22 Mar 2016 • USA (National/Federal) |
In Graziadio v. Culinary Institute of America, the US Court of Appeals for the Second Circuit held, in matters of first impression for the court, that the economic realities test used to evaluate employers under the Fair Labor Standards Act (FLSA) should be used for evaluating employers under the Family and Medical Leave Act (FMLA). The Second Circuit also validated associational discrimination claims under the Americans with Disabilities Act (ADA) and adopted the burden of proof analysis of other circuit courts in those types of cases.
On March 17, 2016, in Graziadio v. Culinary Institute of America, the US Court of Appeals for the Second Circuit held, in matters of first impression for the court, that the economic realities test used to evaluate who is an employer under the FLSA should be used for evaluating who is an employer under the FMLA. The Second Circuit also validated associational discrimination claims under the ADA and adopted the burden of proof analysis used by other circuit courts in those types of cases. The court affirmed summary judgment for the employer on ADA claim, but vacated the grant of summary judgment for the FMLA interference and retaliation claims against individuals. ( (2d Cir. Mar. 17, 2016).)
Background
Graziadio, a payroll administrator at the Culinary Institute of America (CIA), took medical leave to care for her son who was hospitalized. She informed her supervisor of the absence and requested the necessary forms to file for FMLA leave. She submitted the completed forms and shortly after returning to work, submitted a medical certification form. That same day, Graziadio notified her employer that her other son suffered an injury and that she needed to take leave again. She stated that she would return two weeks later, "at least part-time."
Graziadio asked if a temporary part-time schedule could be approved and inquired about any papers that she needed to complete. After a week without a direct reply, CIA responded to Graziadio that her FMLA paperwork did not justify her absences and that updated paperwork was required. In later weeks, Graziadio attempted to cure the deficiencies, repeatedly reminding CIA of her intention to return to work and requesting that CIA provide the forms that she must complete. The exchanges between Graziadio and CIA failed to remedy the situation and the employer cut off communication and eventually terminated Graziadio's employment, claiming that Graziadio had not filed the proper FMLA forms and that she abandoned her position.
Graziadio brought claims against CIA as well as her superior and a human resources director as individuals, alleging interference and retaliation under the FMLA, and associational discrimination under the ADA. The district court granted summary judgment to CIA and the individuals on all claims, holding that:
- Graziadio's colleagues were not employers under the FMLA.
- CIA had not interfered with Graziadio's entitled FMLA leave.
- The FMLA retaliation and ADA associational discrimination claims against CIA failed because CIA had provided legitimate reasons for termination.
Graziadio appealed to the Second Circuit.
Outcome
The Second Circuit held, in matters of first impression for the court, that:
- The economic realities test used to evaluate who is an employer under the FLSA should also be used for evaluating who is an employer under the FMLA.
- Associational discrimination claims under the ADA are sustainable in certain circumstances.
- The burden of proof standard for ADA associational discrimination used by several sister circuit courts should be adopted.
The Second Circuit:
- Affirmed the district court's grant of summary judgment to CIA on Graziadio's ADA associational disability claim.
- Vacated the district court's grant of summary judgment to CIA on Graziadio's FMLA claims.
The Second Circuit noted that:
- An individual may be liable under the FMLA if she meets the definition of "employer."
- Several sister circuit courts and district courts have held that the economic realities test used to evaluate who is an employer under the FLSA should be applied to govern who is an employer under the FMLA (see Hayberger v. Lawrence Cty. Adult Prob. & Parole, 667 F.3d 408, 417-18 (3d Cir. 2012); Modica v. Taylor, 465 F.3d 174, 186 (5th Cir. 2006); Wascura v. Carver, 169 F.3d 683, 685–86 (11th Cir.1999); see also Legal Update, Supervisor at Public Agency Can Be Held Individually Liable Under FMLA: Third Circuit).
- Courts have considered a nonexclusive set of factors to test the economic realities, including whether the employer:
- had power to hire and fire employees;
- supervised and controlled work schedules or conditions of employment;
- determined rates and methods of payment; or
- maintained employment records.
- To prevail on an FMLA interference claim, a plaintiff must establish:
- that she is an eligible employee under the FMLA;
- that the defendant is an employer under the FMLA;
- that she was entitled to take leave under the FMLA;
- that she gave notice to the defendant of her intention to take leave; and
- that she was denied benefits to which she was entitled under the FMLA.
- To sustain an associational discrimination claim under the ADA, a plaintiff must make out a prima facie case, establishing that:
- she was qualified for the job;
- she was subjected to adverse employment action;
- she was known to have a relative or associate with a disability; and
- the adverse employment action occurred under circumstances raising a reasonable inference that the disability was a determining factor in the employer decision.
(see Stansberry v. Air Wisconsin Airlines Corp., 651 F.3d 482, 487 (6th Cir. 2011); Hilburn v. Murata Elecs. N. Am., Inc., 181 F.3d 1220, 1230–31 (11th Cir. 1999); Den Hartog v. Wasatch Acad., 129 F.3d 1076, 1085 (10th Cir. 1997); see also Legal Update, Sixth Circuit Rules on Associational Disability Discrimination Claim).) - The Seventh Circuit's Larimer v. International Business Machines Corp. case outlined the following situations that could give rise to associational discrimination claims:
- an employee suffers adverse action because of his association with a disabled individual covered by the employer's potentially costly insurance;
- an employer fears that the employee may develop the disability of the person with whom he is associated; and
- the employer fears that the employee will be inattentive at work due to the disability of the disabled person.
The Second Circuit ruled that:
- Graziadio presented genuine disputes of material fact concerning her FMLA interference and retaliation claims, because:
- a rational jury could find that the human resources director exercised sufficient control over Graziadio's employment to be subject to FMLA liability;
- Graziadio provided evidence that she was entitled to take leave, that she attempted to take leave, and that CIA refused to approve that leave.
- Graziadio might be able to establish that CIA had denied her leave to care for her first son;
- Graziadio might have fulfilled her obligation to provide adequate medical certification, entitling her to take leave for her second son;
- Graziadio might be able to show that it was unreasonable for defendants to believe that she abandoned her position, thus eliminating that as a motivation for CIA's termination of her employment; and
- given Graziadio's repeated communications concerning her intentions to return to work and her attempts to acquire the necessary leave paperwork, a jury might reject CIA's claims of Graziadio's abandonment as implausible.
- Graziadio failed to provide evidence of ADA discrimination because:
- she failed to show that her firing resulted from CIA suspecting that she would be distracted at work;
- proffered evidence that CIA's termination of her employment was based on its feeling that she had taken too much time away from work for childcare was inapposite; and
- the ADA does not require an employer to provide a reasonable accommodation for an employee to care for a disabled relative.
Practical Implications
In Graziadio, the Second Circuit resolved two matters of first impression for the court and furthered the national jurisprudence on both FMLA individual liability and ADA associational discrimination. Supervisory or managerial employees in the Second Circuit who may be considered employers under the economic realities test should reassess their FMLA liability risks. Employers in the Second Circuit should recognize that employees who have relatives or associates with disabilities are protected against discrimination and prepare for claims when taking adverse actions against these individuals.