Calculating whether an employee has worked 1,250 hours in the past year to qualify for leave under the Family and Medical Leave Act (FMLA) seems like a straightforward enough task. But is it really? With flextime arrangements and employees working overtime or putting in for “comp” time, calculating the 1,250-hour requirement can be tricky business. A recent decision from the Third U.S. Circuit Court of Appeal, is a stark reminder of how important it is to be clear with your employees about overtime and comp-time rules in order to make the FMLA calculation much easier.
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Background
Brenda Erdman was hired by Nationwide Insurance Company in 1980 and held various full-time jobs at the company until 1998, when she asked to work part-time so she could care for her daughter, who was born with Down syndrome. Nationwide granted her request. During their part-time employment arrangement, she often worked extra hours outside the office, and her extra hours were paid at overtime rates or counted as comp time.
In early 2002, Erdman asked to switch to a four-day workweek, and Nationwide allowed her to do so. Shortly after the switch, her supervisor instructed her to “put in the hours that . . . you’re supposed to put in and nothing more than that.” She was then assigned to a new supervisor, and she asked that supervisor for clarification about whether she was allowed to receive comp time. There’s no record of the supervisor’s response to her question.
In early 2003, however, the new supervisor disciplined Erdman for various performance issues, including failing to get approval for overtime and working in the field without authorization. On February 10, Erdman’s supervisor advised her that she could no longer use extra hours for comp time.
Soon after she was disciplined, Nationwide informed Erdman that her part- time position would be eliminated but she could work full-time instead, and she accepted the offer. On April 14, she began working full-time. Nationwide claimed that she became angry and erratic in the full-time position, presumably because she was unhappy with the setup. Specifically, the company claimed that she encouraged other employees to work slowly and be unproductive and made malicious accusations against her boss.
After she accepted the full-time position, Erdman asked whether her previously granted request to take vacation for the entire month of August would still stand. She wanted the time off to prepare her daughter for school. The company informed her that she likely wouldn’t be allowed to take the vacation because of the pressing need for full-time employees in light of the unusually large number of workers requesting vacation that month. Erdman announced that if she couldn’t use the vacation time in August, she would request FMLA leave instead.
In April 2003, a week after she began working full-time, Erdman submitted paperwork requesting FMLA leave from July 7 to August 29. An HR representative responded, “[A]s far as the FMLA, I probably don’t see any problems with this.”
On May 8, Erdman used profanity during a phone conversation that was monitored for quality-control purposes. Specifically, she prefaced a personal call with the profane disclaimer, “This is a personal call and should not be reviewed for quality purposes, a__holes.” She was terminated the next day.
Erdman sued the company under the Americans with Disabilities Act (ADA) and the FMLA. She argued that she was fired because of her request to take FMLA leave and because of her association with a disabled family member (i.e. , her daughter with Down syndrome). The district court dismissed both claims.
In dismissing the FMLA claim, the court found that Erdman hadn’t worked the requisite 1,250 hours during the previous 12-month period. Erdman maintained that she had worked 1,298.25 hours in the past year, including time worked at home. However, the district court didn’t count 57 hours she worked at home after her old supervisor told her to put in only for scheduled time and before her e-mail in September 2002 asking whether she was allowed to work extra hours for comp time. The court also discounted 20 hours she worked from home after she was admonished for unauthorized fieldwork. The court’s calculations left Erdman 28.75 hours short of the FMLA’s 1,250-hour threshold.
Third Circuit’s analysis
On appeal, the Third Circuit reviewed Erdman’s FMLA and ADA claims. It began by noting that an employee is eligible for FMLA leave if she has worked “at least 1,250 hours of service with [her] employer during the previous 12[-]month period.” Part of the inquiry into whether an employee has the requisite number of hours is whether the employer had actual or constructive notice that she worked at least 1,250 hours and was therefore FMLA-eligible. “For FMLA purposes, all work that ‘the employer knows or has reason to believe . . . is being performed’ counts toward the threshold requirement.” Thus, extra hours worked off-site or beyond the employee’s regular schedule count if the employer “knows or has reason to believe that an employee is continuing to work extra hours.”
Nationwide argued that Erdman shouldn’t be able to count the hours that were unauthorized — that is, all the hours she worked at home after she was told to “put in the hours that . . . you’re supposed to put in and nothing more than that.” However, the Third Circuit held that statement wasn’t clear enough to communicate the company’s mandate that she not put in for comp time. A reasonable jury could find that the statement might merely mean that she wasn’t authorized to work overtime but she could still put in for comp time.
Furthermore, Erdman’s new supervisor’s communications with and discipline of her didn’t support the company’s position. Her history of putting in for comp time over the years, coupled with Nationwide’s unclear communications, led the court to believe that the company had actual or constructive notice that she was accruing work hours.
The court therefore counted all of Erdman’s hours worked at home and put in as comp time in 2002 through February 10, 2003, when her new supervisor definitively told her that she couldn’t use extra hours for comp time. The court also discussed other minor FMLA issues and upheld the dismissal of the ADA association claim for lack of evidence.
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Bottom line
This case serves as a general reminder that rules prohibiting overtime, flextime, comp time, or any time spent working outside the office must be clearly defined and communicated to individual employees. Failing to be diligent about employees’ work hours could lead to liability under the FMLA, the Fair Labor Standards Act (FLSA), and state wage and hour laws at the very least. In addition, being clear about your comp time and overtime requirements will make it apparent to both you and the employee whether she has enough hours behind her to qualify for FMLA leave.