Employers Find Legal Support for Surveillance to Fight FMLA Abuse

In a recent ruling, the 7th U.S. Circuit Court of Appeals in Chicago upheld the termination of an Indiana auto parts factory worker for abusing her medical leave. An off-duty police officer hired by Raybestos Products had observed Diana Vail working for her husband’s lawn-mowing business while she was on leave and, the court said, the information obtained from the surveillance was sufficient to give Raybestos an “honest suspicion” that Vail was not using her leave “for the intended purpose.”

Vail had been taking intermittent Family and Medical Leave Act leave for migraine headaches. “As a result of this ‘honest suspicion,’ Raybestos did not violate Vail’s rights under the FMLA,” the 7th Circuit concluded.

Employment law experts say the July 21 published decision in Vail v. Raybestos Products is additional confirmation that the practice of spying on employees, routinely used to ferret out embezzlement, theft of trade secrets and workers’ compensation fraud, is also a valuable—and legal—tool for fighting FMLA fraud.

Employers have generally been successful in defending similar cases around the country, while plaintiffs have failed to gain traction with the argument that using private investigators is an excessive response to the fraud problem and only serves to intimidate employees into not taking leave. U.S. Department of Labor regulations specifically recognize that an employee “who fraudulently obtains FMLA leave from an employer is not protected by FMLA’s job restoration or maintenance of health benefits provisions.”

In June, however, an Ohio judge deviated somewhat from the norm in the case of an assembly-line worker who was fired after an investigator videotaped him building a front porch on his home while he was on FMLA leave. James Weimer sued Honda of America for interfering with his FMLA rights. In allowing the case to proceed to trial, U.S. District Judge Gregory L. Frost cited “a factual dispute as to whether Defendant honestly believed that Plaintiff exceeded the scope of his leave.”

In Illinois, meanwhile, five Illinois Bell employees are moving toward trial in their case, alleging the phone company has systematically interfered with their rights by, among other things, videotaping employees on FMLA leave “in an effort to oust them from their employment and/or discourage them from taking FMLA leave to which they were entitled.”

“They were telling people, ‘If you take FMLA leave, you’re going to be watched,’ ” says the plaintiffs’ attorney, Charles Siedlecki of Chicago. Employers, he admits, have a right to weed out malingerers, but a broad policy of surveillance is a “form of intimidation.” Illinois Bell has filed a motion for summary judgment.

FMLA experts agree that the cases involving Honda and Illinois Bell should remind employers to be cautious both in requesting surveillance of an employee in the first place and then in later taking action against an employee based on the results of the surveillance.

“Just because you can do something doesn’t mean you should do it every time,” says attorney Linda Walton of Perkins Coie in Seattle.

Those who don’t take the necessary precautions can be found liable for violating the FMLA, which protects “any eligible employee who takes leave … for the intended purpose of the leave.”

Under the FMLA, employees are entitled to 12 weeks of leave in a 12-month period. But since the law was passed in 1993, employers have become increasingly concerned about employee abuse, particularly of intermittent leave.

Workers who have doctor appointments or suffer unexpected flare-ups of a chronic health condition such as migraine headaches can take leave in small increments of as little as an hour. But for the less scrupulous, intermittent leave has turned into an opportunity to take a three- or four-day weekend, for example.

According to arecent survey by WorldatWork, an association of HR professionals, suspected employee abuse is the leading complaint about intermittent leave among its members. Forty-two percent report “extreme difficulty” in dealing with the potential for or suspicion of abuse.

“Intermittent leave is far and away more of a problem for employers than leave taken in a block,” notes attorney John Myers of Eckert Seamans in Pittsburgh. “It’s unpredictable and it’s unscheduled.”

In 2004, the Department of Labor offered employers some guidance on how to confront the problem. A Friday/Monday absence pattern can, in and of itself, constitute “information that casts doubt upon the employee’s stated reason for the absence,” it said in anopinion letter, thus allowing an employer to request medical recertification from the employee’s health care provider more frequently than every 30 days. The employer can also request a second and third medical opinion with the recertification.

But for employers who feel they need to go further, and have a “good faith, honest belief” that an employee is abusing leave, it may be appropriate to hire a private investigator.

“Given the right circumstances, it’s the right thing to do,” insists Christy Phanthavong, counsel in the Chicago office of Bryan Cave. “An employer might have a tough time selling surveillance as an across-the-board policy. But when they have some sort of reason to suspect fraud is going on … engaging a private investigator is going to be more acceptable to the courts.”

Volvo Parts North America, for one, wasted little time requesting surveillance of Ebony Stanley, an employee at its Columbus, Ohio, warehouse. After Stanley submitted her FMLA paperwork on February 3, 2006, so she could take intermittent leave for chronic anemia, she missed her 2:30-11 p.m. shift on February 14.

That night, starting at precisely 11:01 p.m., a private investigator followed her from her home to a nightclub, the Boulevard, where she was observed wearing a “one piece red thong bathing suit” and dancing “exotically” on the stage. After a second night of surveillance at the club, Volvo fired her for engaging in outside employment while on FMLA leave, which constituted a violation of its collective bargaining agreement with the United Auto Workers.

Stanley sued Volvo for interference and retaliating against her for taking leave, arguing, among other things, that she should not have been under surveillance outside her normal working hours. She also denied she was actually working at the club. But Volvo was able to defeat her claims by showing her termination was based on an “honest suspicion” that she was not using her leave for its intended purpose, and the investigator’s report was powerful evidence against her, as U.S. District Judge Michael H. Watson noted in granting Volvo’s motion for summary judgment.

The plaintiff has appealed the ruling. “The judge didn’t even address the issue that the surveillance happened after her shift,” says her attorney, Fazeel Khan of Blaugrund Herbert & Martin in Worthington, Ohio.

The Weimer case, however, suggests that the usefulness of evidence gathered during surveillance has its limits. Weimer, who worked at Honda’s Marysville, Ohio, plant, took FMLA leave after suffering an on-the-job industrial injury. A co-worker tipped Honda off that he was building his porch and the company put him under surveillance. After he returned to work, he was fired for taking leave under false pretenses.

In his decision, Judge Frost wrote that he could not “say as a matter of law that Plaintiff did not use his FMLA leave for its intended purpose,” in part because it was unclear whether Weimer’s ability to build a porch “informs his ability to perform the duties of his job.” Moreover, if Honda “knew that Plaintiff’s purported on-leave activities did not rise to the level of his job functions … the investigation’s conclusions cannot provide the honest belief on which Defendant relies.”

According to attorney Linda Walton, the case makes clear that employers have to be very cautious about taking action as a result of an investigation. An investigator’s report cannot say, for example, “whether an employee’s on-leave activities rise to the level of job functions. And the employer must honestly believe that what they were doing rises to the level of job duties.”

Plaintiffs’ attorney Charles Siedlecki believes any spying on an employee suspected of FMLA abuse is improper outside the hours the employee would normally be working.

“You shouldn’t be watched anytime you go to the doctor or the drugstore,” he argues. “When you’re on FMLA leave, you’re not a prisoner of your house.” He also says employers are interpreting “reasonable suspicion” too broadly in deciding to have an employee investigated.

“They’re playing games with some of the vagaries of the statute in an effort to stretch it as far as they can,” Siedlecki says.

But the overall trend in FMLA litigation appears to be favoring employers. In the case of Diana Vail, the 7th Circuit noted that while putting an employee under surveillance “may not be preferred employer behavior, employers have certainly gone further than Raybestos.”

Attorney Christy Phanthavong says that employers can have some confidence that “when you have a good reason for taking aggressive steps, you’re going to be OK.”