Lessons Learned Series - Part One - No-fault Attendance Policies

This is the first article in a three-part series called Lessons Learned. Each post will discuss the mistakes of other employers, so you can avoid the same messes.

Today, we are going to review an employer’s no-fault attendance policy that violated the Family and Medical Leave Act (FMLA). I know you are thinking that a no-fault policy violating FMLA is nothing new. Well, true enough. However, read on because there is a twist in Dyer v Ventra Sandusky, LLC, a recent published opinion by the U.S. Court of Appeals for the Sixth Circuit. 

As is typical for no-fault policies, the Ohio automotive supplier didn’t require employees to produce a note from a doctor or other evidence to justify an absence. The employee just got between .5 and 1.5 points assessed depending on whether the employee called in, was late or missed an entire shift, etc. Discipline was imposed along the way and 11 points resulted in discharge.

But, unlike the no-fault systems you are familiar with, this one did not assess any points, at all, when the absence was protected under FMLA or another leave law. So, how did they run afoul of FMLA?  Glad you asked. 

The system provided for the reduction of one point if the employee had perfect attendance for a rolling 30 day period. What a nightmare for tracking, right? I’m guessing this had to be the brainchild of someone in operations, not human resources, because there is plenty enough to track already.

If an employee took time off for vacation, bereavement, jury duty, military duty, union leave or holidays, the company treated it as a day worked and kept the employee on track towards achieving the 30-day one point reduction. If an employee used a vacation day for a day off under FMLA, it also kept the employee on track for the reduction. So far, so good.

But employees were not required to use paid time off while taking FMLA leave. That turned out to be the rub (and no good deed ever goes unpunished). Most of my clients require the use of paid time off for FMLA leave either until it is exhausted or until the employee is down to a certain number of vacation days left. Of course even if the company required employees to drop vacation in during FMLA leave, it is unlikely any employee would have enough time to cover 12 weeks’ worth of days off. Eventually, the employees exhaust their time and the system would still run afoul of FMLA.

Because it was optional, the plaintiff decided not to use his vacation time when he missed work for migraines which he had approved as intermittent leave under FMLA. Thus, every time he missed work for this reason, the “forgiveness” clock started over with “day one” of the requisite 30-day period needed to drop a point.

Eventually, the plaintiff was fired for having 11 points. So, while the no-fault system did not add points for FMLA time, it classified the unpaid leave as a missed day that reset the 30-day point dropping forgiveness clock.

The company argued that unpaid FMLA was treated the same as all other non-FMLA leave for purposes of the point reduction and, therefore, was permissible. If the day off was paid, it counted as being worked. If it wasn’t paid, it didn’t.

The appellate court wasn’t buying it. Every time the plaintiff returned from a FMLA absence and had the no-fault clock reset to day one, he was denied the flexibility of the company’s no-fault system that others enjoyed. While the policy did not “formally hinge point reduction on not taking FMLA leave, the practical result is the same for someone like [plaintiff] who must take frequent intermittent FMLA leave.”

The problem was that “an employee benefit, the accrual of which, like the accrual of other benefits or seniority, must be available to an employee upon return from leave. … [B]enefits accrued at the time leave began…must be available to an employee upon return from leave.” Wiping out an attendance point is an employee benefit that affords employees the ability and flexibility to manage their absences. The plaintiff was denied this benefit when he returned from FMLA and started over with day one of the 30-day clock. Thus, the policy violated FMLA.

One lesson is this: keep it simple. It amazes me sometimes just how convoluted a client’s attendance system can become. But more importantly, review your system very carefully when you create it to ensure that there aren’t any negative effects on FMLA leave (or now the Michigan Paid Medical Leave Act).

Speaking of the Michigan Paid Medical Leave Act, we are still waiting for the Michigan Supreme Court’s decision on the constitutional challenge to that law. If you are contemplating changing your attendance or paid time off benefit systems, its best to wait for the court’s decision or you may need to change it again when the opinion comes out…hopefully soon. We of course will let you know when it does.

Check back soon for the next installment in our Lessons Learned series!

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