Scary reminder: HR directors may face liability for FMLA violations

Managing FMLA leave and the FMLA certification process is typically one of the most challenging assignments for HR professionals. Now imagine facing individual liability under the FMLA for your company’s FMLA violations. In the Eighth Circuit Court of Appeals (the federal court of appeals that covers Iowa), that idea has been a reality for several years, but a recent decision from the Second Circuit provides a good reminder to employers that the job of HR professionals is much more challenging than others can even imagine.

In Graziadio v. Culinary Institute of America, et al., 15-888-cv (2^nd Cir. March 17, 2016), the Second Circuit found that a human resources professional can be held personally liable for her company’s FMLA violations. The Plaintiff, Cathleen Graziadio, was a payroll administrator at the Culinary Institute of America (“CIA”).  Her dispute with CIA began after she took FMLA leave to care for her diabetic son. After she returned to work, she then took additional leave to care for her second son who broke his leg. During this leave, the HR Director questioned the validity of her leave and would not allow the Plaintiff to return to work until she provided new FMLA documentation.

The parties then engaged in what the court labeled an “excruciating exchange” – the  Plaintiff repeatedly attempted to determine what additional paperwork was necessary and the HR Director continued to request unspecified “documentation” and “certifications.” Ultimately, the parties stopped communicating and the Plaintiff was terminated for abandoning her job. The Plaintiff then filed a lawsuit against CIA and the HR Director, in her individual capacity.

The question of whether the HR Director could be held individually liable under the FMLA boiled down to the meaning of the word “employer.” Under the FMLA, “employer” is defined as encompassing “any person who acts directly or indirectly, in the interest of an employer to any of the employees of such employer.” In determining whether the HR Director met this definition, the Second Circuit applied the “economic-reality test,” which is used to analyze whether an individual is considered an “employer” under the FLSA and requires courts to evaluate whether the alleged employer had the power to control the worker in question, while keeping an eye to the “economic reality” presented by the facts.

The Second Circuit found that the HR Director did meet this definition because she “played an important role in the decision to fire” the Plaintiff, she exercised control over the Plaintiff’s schedule and conditions of employment with respect to her return from FMLA, she reviewed and determined the adequacy of the Plaintiff’s FMLA paperwork, and she was in exclusive communication with the Plaintiff regarding the FMLA issues. As a result, the Second Circuit determined that a jury could find that the HR Director was an “employer” under the FMLA.

Takeaways: While the threat of individual liability is not new to Iowa employers (individual supervisors can also be held liable for employment discrimination under Iowa’s Civil Right Act), this case is a good reminder that employers should ensure that their HR professionals: (1) are aware of their potential exposure to liability; (2) are regularly trained on FMLA compliance; and (3) are encouraged to work with experienced legal counsel on sticky and complex FMLA issues. In addition, employers should consider whether it will indemnify an HR professional who is sued individually, and to what extent.

If you have any questions regarding the FMLA or the FMLA training provided by Dickinson Law, please contact a member of Dickinson’s employment law group.

The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.