New England Biz Law Update
The 1st U.S. Circuit Court of Appeals will be asked to clear up ambiguity over the appropriate causation standard that should be applied to retaliation claims under the Family and Medical Leave Act.
At least that’s the hope of amici in the case: the Massachusetts Employment Lawyers Association, on one side, and the New England Legal Foundation and Associated Industries of Massachusetts, on the other.
But even if the 1st Circuit focuses solely on the issue a U.S. District Court judge deemed dispositive, its decision could cure — or cement — what attorneys siding with the plaintiff say is the creation of a perverse incentive for employers.
Freak accident
The case, Chase v. United States Postal Service, et al., involves a now-former Brookline postal worker who suffered a shoulder injury in a freak on-the-job accident on July 21, 2010.
A letter carrier since 1997 with a clean employment record, plaintiff Robert Chase was eating lunch while parked on the side of the road when a car driven by an elderly woman who had fallen asleep at the wheel crashed into his mail truck. Among those who responded to the scene was his supervisor, Michael King.
According to trial testimony, King had a habit of airing his frustrations on the post office’s public-address system, broadcasting a reference to Chase as “the injury fraud specialist” after he hurt his knee in 2006 while at work.
After the car accident, King used the office bulletin board to post an “injury compensation specialist” job opportunity and announced to the office that Chase would be perfect for it “since you’re the biggest fraud when it comes to injuries.”
On other occasions, according to a co-worker, King requested “the carrier … who is faking an injury” come to his office.
King denied having any bias against employees who take injury leave, but U.S. District Court Judge Douglas P. Woodlock found that King “was predisposed to view those on leave for injuries as putative malingerers who made his staffing work more challenging.”
A unique — and in Woodlock’s estimation, key — fact is that Chase somewhat inexplicably applied for his 12 weeks of unpaid FMLA leave immediately after the accident, even though he was entitled to workers’ compensation and other paid leave. Technically, for those 12 weeks, Chase was on both categories of leave concurrently.
But the stated reason for Chase’s eventual firing was not his leave but rather an arrest at his brother’s apartment on Sept. 18, 2010. Police sent to investigate unrelated allegations of domestic violence against Chase’s brother observed in plain view a baggie of what they believed to be cocaine. An ensuing search discovered additional drugs. Chase was charged with possession of cocaine with intent to distribute and conspiracy to violate the drug laws.
Four months later, King initiated the process to terminate Chase’s employment due to the arrest, which prompted Chase to file a grievance through his union. While the grievance was pending, the criminal charges all but went away: The conspiracy charge was dismissed, and the intent-to-distribute charge was reduced to simple possession, which would be dismissed if Chase successfully completed a year of pre-trial probation. The arbitrator was unmoved, however.
The arrest, Woodlock concluded, exacerbated King’s “animus over what he perceived to be Chase’s abuse of workers’ compensation leave.”
But he distinguished that type of leave from FMLA leave. Because King was “unaware” that Chase had taken leave under the FMLA, he could not be said to have retaliated against him for doing so, Woodlock concluded.
Causation and ‘Chevron’ deference
In pursuing an appeal, Chase and his Boston counsel, Lori A. Jodoin, are in somewhat of an odd position. They would like, of course, to undo the victory for the defense. But in the process, they also hope not to disturb a favorable finding on the issue that drew MELA, AIM and the New England Legal Foundation into the case: the causation standard.
Woodlock noted that there is “some uncertainty” regarding the causation standard in light of the U.S. Supreme Court’s 2013 decision in University of Tex. Sw. Med. Ctr. v. Nassar.
On one side is the more employer-friendly “but-for” standard, which asserts that a plaintiff establishes his claim only if he can show that the adverse action would not have been taken absent the illegal discrimination or retaliation.
On the other side is the “negative factor” standard, under which a plaintiff merely needs to show that the employer’s unlawful practice was among the reasons he was fired or disciplined.
Nassar, in which the “but-for” standard was adopted, involved retaliation under Title VII, but the defendants in Chase argued that the reasoning could be extended to the FMLA, which adopted its framework for analyzing retaliation claims from the Title VII “arena.”
Woodlock, who had kicked the causation can down the road while weighing a motion for summary judgment earlier in the case, decided he had to grapple with it post-trial.
While an open issue, Woodlock found at least some judges — albeit in cases that pre-dated Nassar — had decided not to extend but-for causation to the FMLA. In a related case, Gross v. FBL Financial Services, Inc., the Supreme Court required but-for causation for Age Discrimination in Employment Act claims but did not extend the standard to the FMLA.
To reach his decision, Woodlock applied a doctrine the Supreme Court announced in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., under which agency regulations interpreting a law, so long as they are “promulgated … with the force of law pursuant to an explicit statutory grant of rulemaking authority,” should be given deference if a statute is otherwise ambiguous.
Thus, Woodlock gave persuasive weight to the Department of Labor’s regulations, adopting a “negative factor” test for FMLA retaliation.
“The relaxed causation standard provided by the Department of Labor is precisely the sort of ‘legitimate policy choice’ that Chevron empowers a properly delegated agency to make,” he wrote.
Now, the 1st Circuit will have to decide whether Woodlock got it right.
“The few courts to actually have decided this FMLA issue post-Nassar have not provided much guidance in the way of reasoning and analysis. Hopefully, the 1st Circuit will fill this analytical void.”
— John Pagliaro, New England Legal Foundation
What hangs in the balance
Chase and the Massachusetts Employment Lawyers Association believe he did.
MELA’s brief goes to great lengths to distinguish Chase from Nassar and Gross. Among its arguments is that “but-for” is linked to the word “because,” which appears in Title VII and the ADEA, where the causation standard has been adopted, but not in the FMLA.
“The use of differing language within the FMLA’s interference clause should be viewed as a conscious choice intended [by Congress] to create a different meaning,” MELA argues.
The defendants, AIM and the New England Legal Foundation disagree.
In a reply to MELA’s brief, U.S. Attorney Carmen M. Ortiz’s office argues that, in Nassar, the Supreme Court actually “issued a new rule of statutory construction to discern the appropriate causation standard in a federal employment statute.” Absent any ambiguity, Chevron deference never comes into play, the U.S. attorney argues.
Such a position is even more “logical,” the U.S. attorney contends, given that Title VII expressly prohibits retaliation, while the FMLA does not.
“It is illogical that Congress would have intended to make it more difficult for an employee to prove a Title VII retaliation claim than an FMLA retaliation claim,” the brief states.
Similarly, the joint AIM-New England Legal Foundation brief characterizes but-for causation as a default that “need not be signaled by any special words — silence is sufficient.”
Any exception would need to be made plain in the statute, they argue.
The author of that brief, New England Legal Foundation staff attorney John Pagliaro, said he hopes the 1st Circuit “will be equally attentive in their reading of Nassar” as it was in the 2012 decision Palmquist v. Shinseki, in which an analysis of the text of the Rehabilitation Act of 1973 led it to decide that the default “but for” was the causation standard for a retaliation claim, absent language to the contrary.
One thing both sides agree on, however, is that the 1st Circuit has the chance to provide some clarity where it is lacking.
“The few courts to actually have decided this FMLA issue post-Nassar have not provided much guidance in the way of reasoning and analysis,” Pagliaro said. “Hopefully, the 1st Circuit will fill this analytical void.”
The two sides also agree that the causation standard, in Pagliaro’s words, “can make or break a case.”
However, the author of MELA’s brief, Boston attorney David Conforto, said that if the 1st Circuit settles on a “but-for” standard for FMLA retaliation claims, it will not be the end of the world for plaintiffs, just as it was not when, on the state level, the Supreme Judicial Court adopted the standard in the context of the state’s discrimination statute, G.L.c. 151B, in the 2001 case Lipchitz v. Raytheon Company.
Still, the higher hurdle, Conforto said, could embolden employers to argue that the “but-for” standard is actually a “sole cause” standard, a view that the SJC took pains to reject.
But Boston lawyer Catherine E. Reuben believes the issue may be more straightforward than it first appears.
Here, the adverse action against Chase came long after his 12 weeks of FMLA leave had expired. In such a case, Reuben said, an employer should be within its rights to consider the employee’s absence as a whole — including the time spent on FMLA leave — in making employment decisions, rather than exempting it from the calculus indefinitely, particularly as an employee’s absence persists and its impact on the business grows.
“If at that point an employee remains wholly unable to work, and there is no reasonable prospect of their returning in the foreseeable future, the employer can usually proceed with lawfully ending the relationship,” she said.
That lessens the impact of granting the DOL’s regulations Chevron deference, she argued.
“The DOL says that, when making employment decisions, employers must take the exercise of rights under the FMLA out of the equation,” she said. “That does not necessarily mean they have to take the fact of leave — particularly leave beyond the scope of the FMLA — out of the equation.”
Given the egregiousness of King’s conduct, Conforto believes if Woodlock’s decision is reversed and the case remanded, Chase will prevail under anything other than a sole-cause standard.
But to get to that point, the 1st Circuit also will have to agree with Jodoin, Chase’s attorney, on the other key issue in the case.
Ignorance as a shield?
“This case will decide whether a line manager’s ignorance of the FMLA shields the employer from liability for FMLA retaliation,” Jodoin said. “The 1st Circuit will have the opportunity to decide whether employers should be rewarded for failing to instruct their managers about their obligations under the FMLA.”
Conforto agrees that upholding Woodlock’s decision could create a perverse incentive for managers to remain willfully ignorant of whether their employees are out on FMLA leave. Employee-side lawyers, meanwhile, would be forced to urge their clients that they need to make it explicitly clear to their supervisors that they are taking FMLA leave, as opposed to some other kind.
Woodlock, however, took great pains to stress how “unusual” and “idiosyncratic” he believed Chase’s case was.
An employer who is “simply unaware of the FMLA’s protection … could still remain liable under theories of inquiry notice,” the judge wrote.
Woodlock found that King was troubled by Chase’s workers’ compensation leave, rather than his concurrent FMLA leave, which he “effectively, if incorrectly, believed that Chase had declined.”
