Recent Court of Appeals Decision Clarifies Important Points of the FMLA - Part 2

Continuing from our Part 1 article, in Waag v. Sotera Defense Sols. Inc., 2017 BL 163037, 4th Cir., No. 15-2521, 5/16/17), Waag also argues that Sotera interfered with his FMLA rights by terminating him a little more than one month after his return from medical leave. 

Waag claims that Sotera did not restore him to a real position. Rather, Waag believes that his post-leave job was, in fact, a sham position, created to make it appear that Waag had been restored to an equivalent position but that, in actuality, was slated for elimination. Basically, Waag thinks Sotera decided to fire him while he was on leave and then did so by placing him in a make-work job after he returned.

The district court rejected this argument, concluding that Waag would have been discharged regardless of whether or not he had taken leave. The district court noted that Waag's termination was inevitable in light of Sotera's dire financial circumstances as a result of sequestration, the lack of work under a particular government contract Waag was to be working on (the “NexGen” contract), and Waag's status as an indirect employee paid out of overhead.

On appeal, Waag contends that summary judgment was inappropriate because a triable question of fact exists as to whether his post-leave position was a sham, essentially scheduled to be eliminated after a few weeks. Waag relies on an FMLA regulation that fleshes out the limitations on the right to reinstatement recognized in the statute.

The regulation provides, in relevant part, that "[a]n employee has no greater right to reinstatement or to other benefits and conditions of employment than if the employee had been continuously employed during the FMLA leave period," meaning that an employer may deny restoration completely if the employer "show[s] that an employee would not otherwise have been employed at the time reinstatement is requested." 29 C.F.R. § 825.216(a). However, "[r]estoration to a job slated for lay-off when the employee's original position is not would not meet the requirements of an equivalent position." 29 C.F.R. § 825.216(a)(1).

Waag suggests that there is sufficient record evidence for a jury to conclude that (1) after he returned from leave, Waag was put in a "sham" job that was essentially slated for elimination, and (2) that Waag would not have been laid off if he had not taken leave because his original job was never eliminated, as demonstrated by the fact that another employee who took over Waag's position while he was on leave continued to serve as the NexGen Project Manager until October 2015. Were both of these assertions true, then Sotera's placement of Waag in the EWP job "would not meet the requirements of an equivalent position."

The Court of Appeals concluded, however, that no reasonable juror would believe, based on the record, that Waag was put in a short-term sham job to cover Sotera's decision to fire Waag when he returned from leave.

Waag argues that a jury could conclude that the job Sotera gave Waag following medical leave "was a fake or sham position" based largely on "temporal proximity"—that is, he was placed in a new business development job that was eliminated approximately six weeks later. Waag points out that obtaining government contract work involves a protracted bidding process, and he argues that his business development position was eliminated well before he had a chance to generate any revenue. Waag, however, points to no actual evidence in the record that would permit a jury to conclude—without speculating—that the post-leave job was a sham.

The Court of Appeals determined that the undisputed evidence shows that Waag's position was genuine and that it was not slated for lay-offs at the time that Waag returned from leave. The Vice President was assigned to the same division, which, at the time Waag joined, was working toward winning a contract worth 70 or 80 million dollars. Indeed, Waag worked on the proposal as well. Although Sotera's bid was ultimately unsuccessful, it was a real bid. And if it was a sham, it was an elaborate one that affected other people—notably, a vice president, also lost his job following the failed bid.

Therefore, the Court of Appeals concluded that Waag failed to adduce sufficient evidence to create a genuine issue of material fact such that a reasonable factfinder could conclude the adverse employment action was taken for an impermissible reason, i.e., retaliation.

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