Seventh Circuit Signs Off on Termination After FMLA Leave

Employment Law

An employer with documented evidence of performance issues before an employee took leave under the Family and Medical Leave Act (FMLA) did not run afoul of the statute when it terminated the employee upon her return, the Seventh Circuit Court of Appeals recently held.

Tracy Anderson began working as a mortgage auditor for Nations Lending Corp. (NLC) in January 2017. Her job entailed verifying mortgage documentation from the underwriter and ensuring that the loan met established requirements.

During her first year at NLC, Anderson exhibited performance deficiencies. Although she was never written up or formally disciplined, Anderson was provided with ongoing training. She also experienced multiple health problems during the same period of time. She used up all her sick days and took an extended leave for several months.

While Anderson was on leave, her supervisor learned of additional performance issues and requested that she complete additional training. When another error was uncovered, NLC created a spreadsheet to keep track of the problems with Anderson’s work.

Anderson experienced more health issues in March 2018. Her supervisor suggested she apply for FMLA leave, and she was on leave until June 18, 2018. Anderson also alleged that her supervisor made comments at the time about how she was “sick a lot” and that they needed “a full team there.”

Just a few days into Anderson’s FMLA leave, NLC flagged several more errors in her work. In May, the Department of Housing and Urban Development cited NLC for errors Anderson made in a loan.

Her supervisor recommended that she be terminated based on her poor performance, and NLC began an investigation. Anderson returned to work and was instructed—per NLC protocol—to catch up on training modules and review any updated lending guidelines before she could begin work on mortgages.

A few days later, when the investigation was complete, NLC terminated Anderson. She sued the company for interference and retaliation with her rights under the FMLA. The district court granted NLC’s motion for summary judgment, and Anderson appealed.

The Seventh Circuit affirmed.

Anderson argued that NLC interfered with her reinstatement after FMLA leave because she was tasked with reviewing directives issued during her absence and watching training material instead of working on loans and that her discharge was pretextual.

“[N]o rational finder of fact could conclude that asking a returning employee to catch up on missed emails and to catch up on directives and training missed during her absence amounts to the sort of ‘make-work’ that might indicate an intent to sideline or ‘warehouse’ an employee permanently,” the court wrote.

Nor was there evidence that Anderson was terminated because she took FMLA leave.

“An employee is not entitled to return to her prior position if she would have been terminated regardless of whether she took FMLA leave,” the court said.

Anderson did not dispute NLC’s estimation of the quality of her work and failed to present sufficient evidence that her discharge was pretextual. Although she contended that she could have been counseled about the loan deficiencies upon her return to work, the NLC employee handbook clearly stated that the company reserved the right to terminate employment without engaging in corrective counseling.

As for Anderson’s retaliation claim, the panel was not persuaded that NLC fired her only after she applied for FMLA leave.

“Here, Ms. Anderson was terminated after her work performance deficiencies came to light while she happened to be on leave,” the court wrote. “Notably, however, [NLC] began tracking Ms. Anderson’s mistakes in February 2018, before she requested FMLA leave in March. Shortly after her leave began, NLC learned of several additional mistakes Ms. Anderson had made.”

The Seventh Circuit did not find it suspicious that Anderson was not fired immediately when the errors were discovered, as the fact that NLC waited to terminate Anderson until the investigation was complete “only supports a finding that there was no discriminatory FMLA retaliation. Waiting to confirm the results of the investigation supports a finding that NLC terminated Ms. Anderson based on performance.”

While Anderson pointed to the comments allegedly made by her supervisor, the supervisor was not the final decision maker in Anderson’s termination, the court said.

“Ms. Anderson was unable to establish that she had a right to reinstatement despite the numerous work performance deficiencies discovered while she was on FMLA,” the court concluded. “She was also unable to demonstrate that NLC terminated her due to her taking FMLA leave rather than due to the deficiencies it discovered while she was out. We therefore affirm the district court’s determination that Ms. Anderson cannot establish an FMLA interference claim or an FMLA retaliation claim.”

To read the opinion in Anderson v. Nations Lending Corporation, click here.

Why it matters: The Seventh Circuit’s opinion provides a road map for employers when faced with a poor-performing employee who takes leave. By documenting the employee’s performance issues before and during leave, the employer may be able to avoid FMLA liability.



pursuant to New York DR 2-101(f)

© 2024 Manatt, Phelps & Phillips, LLP.

All rights reserved