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March 21, 2016

Second Circuit Ruling Finds Human Resources Director may be liable as Joint Employer for Family And Medical Leave Act Violations

On March 17, 2016, the United States Court of Appeals for the Second Circuit reversed a lower court and permitted a fired employee’s Family and Medical Leave Act (“FMLA”) claim to proceed against the Human Resources Director who instigated her discharge. In Gradziadio v. Culinary Inst. Of Am., No. 15-888-cv, 2016 WL 1055742 (2nd Cir. Mar. 17, 2016), the plaintiff was a payroll administrator at the Culinary Institute of America who was fired after taking leave to provide medical care for her two sons. She subsequently brought an action under the FMLA against both the Culinary Institute of America and her former Human Resources Director.

In the decision, the Second Circuit found that the “economic reality” test used under the Fair Labor Standards Act to decide whether an individual manager may be deemed an “employer” also applies under the FMLA. Under that test, an “employer” includes “any person” who “acts, directly or indirectly in the interest of an employer” toward an employee. The court determined that a jury applying the economic-reality test could find that the Human Resources Director qualified as an FMLA “employer” to the employee and therefore may be liable for violating her statutory rights. Although the Human Resources Director did not have the “ultimate authority” to terminate employees, the Second Circuit found that the evidence indicated that she “played an important role” in the decision to fire the employee. Therefore, the court concluded that “a rational jury could find, under the totality of the circumstances that [the Human Resources Director] exercised sufficient control over [the employee’s] employment to be subject to liability under the FMLA.”

Takeaway for Employers

This decision is troubling for employees who have decision-making authority regarding termination and other human resources decisions, who are now exposed to the risk of individual liability for FMLA violations. Human resources directors and others who play “an important role” in an employment decision will need to be particularly mindful about their obligations under the FMLA.

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If you have any questions regarding this decision or the Family and Medical Leave Act, please do not hesitate to contact us.