NEW CHALLENGE TO REQUIRED USE OF PAID LEAVE DURING FMLA

Employers that require employees to use paid time off such as vacation, sick time and “PTO” during a leave pursuant to the Family and Medical Leave Act ("FMLA") should take note of a recent Seventh Circuit Court of Appeals case which found that Roadway Express, Inc. violated the FMLA when it required an employee on FMLA leave to use her paid sick and vacation time because the employee was already receiving disability benefits from a multi-employer sponsored plan.

Many employers require employees who take FMLA to exhaust all of the paid leave to which they are entitled during their FMLA leave. The reason for the requirement is generally to eliminate the possibility that employees will take FMLA leave and then either extend the leave or take paid time off later in the year, thereby further disrupting the employer's operations.

In March of this year, however, the practice of mandating employees to take paid time off concurrent with FMLA was challenged by an employee who was receiving disability benefits pursuant to a multi-employer sponsored plan. In Repa vs. Roadway Express, Inc., the employee, Alice Repa, suffered an injury that required medical attention and a six-week absence from work. Repa applied for and was granted disability benefits. She also requested and was granted FMLA leave by Roadway and, pursuant to Roadway’s policy, Roadway required her to use all of her accrued vacation and sick leave concurrently with her FMLA leave.

Repa claimed in Court that Roadway violated the FMLA by forcing her to use accrued sick and vacation time during her FMLA leave. Repa took the position that because she was receiving disability benefits from a multi-employer fund, the FMLA provision allowing the substitution of paid leave did not apply. Roadway, however, argued that the FMLA permitted employers to require employees to use paid leave during FMLA leave and that to the extent the Department of Labor regulation said otherwise, it was invalid because it contravened Congress’ intent in enacting the FMLA to provide twelve weeks of leave. Roadway argued that the Department of Labor should not be permitted to extend leave beyond the twelve weeks provided in the statute.

The Seventh Circuit Court of Appeals found that Repa’s leave was not unpaid leave and that the portion of the regulation dealing with the substitution of accrued paid leave for unpaid FMLA leave was inapplicable. Roadway, therefore, could not require her to take her paid vacation and sick time during her FMLA leave. The Seventh Circuit further declined to address Roadway’s further argument that the DOL regulation was invalid.

Not surprisingly, what this means is that the issue of whether an employer can compel the mandatory use of paid leave during FMLA leave while the employee is receiving benefits from a third party is unresolved. Employers should, therefore, review their policies and practices and make a decision, with the advice of counsel, as to whether to continue to insist that paid time off run concurrently with FMLA leave when employees are receiving paid benefits from a third party.
 

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