Because The Handbook Says So: Employers May be Equitably Estopped from Arguing Employees are Ineligible for FMLA Leave

Late last month, the Sixth Circuit Court of Appeals – which encompasses the states of Kentucky, Michigan, Ohio, and Tennessee – found that there was a genuine issue of material fact as to whether an employee – who was not eligible for leave under the Family and Medical Leave Act (“FMLA”) – was nevertheless eligible for FMLA leave (and all of the rights and privileges that come with such leave) under a theory of equitable estoppel when the employee handbook contained a broader definition of FMLA eligibility than what the law required.

The trial court had initially dismissed the employee's FMLA claims because the employer had fewer than 50 employees within 75 miles. As a result, the employee was not eligible for FMLA leave under the statute. The appellate court, however, found that there was a question of material fact as to whether the employer was equitably estopped from denying eligibility for FMLA leave based on the handbook, which specifically provided:

Employees covered under the Family and Medical Leave Act are full-time employees who have worked for the (employer) and accumulated 1,250 work hours in the previous 12 months.

There was no mention in the handbook of the FMLA eligibility requirement that the employee work at a location which has 50 employees within 75 miles.

The appellate court determined that the company's “unqualified statement” defining who was eligible for leave under the FMLA, satisfied the misrepresentation element of equitable estoppel. The court further found that the employee's affidavit, in which he specifically stated that he reasonably relied on the handbook statement, was sufficient to create an issue of material fact as to whether the employer was equitably estopped from denying his eligibility for FMLA leave.

This case is a cautionary tale to all employers to ensure that their handbooks do not inadvertently omit (or include) legally significant language that could result in litigation down the road.

Please contact your Elarbee Thompson attorney or respond to this email for assistance with reviewing your handbook to ensure accuracy and consistency with the FMLA, as well as other applicable federal and state laws.