In a recent decision, the Second Circuit Court of Appeals held that the Director of Human Resources of an organization may be held individually liable for Family and Medical Leave Act (“FMLA”) violations. In reaching its decision, the court examined the definition of “employer” under the FMLA and determined that the Director of Human Resources exercised sufficient control to meet the definition of employer and therefore subject to individual liability.
Plaintiff Cathleen Graziadio, an employee at the Culinary Institute of America (“CIA”), took FMLA leave to care for a son suffering from diabetes, then took additional leave a few weeks later when another son broke his leg. During Graziadio’s second absence, CIA took issue with the paperwork supporting Graziadio’s leave and refused to allow her to return until she provided new documentation. Communication between Graziadio and CIA broke down, and CIA ultimately fired Graziadio for abandoning her job. Graziadio sued CIA, as well as both her immediate supervisor and CIA’s Director of Human Resources, alleging interference and retaliation under the FMLA and discrimination under the Americans with Disabilities Act (“ADA”).
The Court’s Decision
The Court applied the “economic realities” test to determine whether an individual may be held liable under the FMLA as an “employer.” Under the economic realities test, the court considered “whether the alleged employer possessed the power to control the worker in question, with an eye to the ‘economic reality’ presented by the facts of [the] case.” In doing so the court considered various factors, including whether the alleged employer (1) had the power to hire and fire the employees; (2) supervised and controlled employee work schedules or conditions of employment; (3) determined the rate and method of payment; and (4) maintained employment records.
The Court determined that there was ample evidence that CIA’s Director of Human Resources controlled, in whole or in part, Graziadio’s rights under the FMLA. Although the Director did not formally hold termination authority, the ultimate decision was made at the recommendation of the Director and that the Director held substantial power over Graziadio’s termination. Additionally, the Director exercised control over Graziadio’s schedule and employment conditions, particularly after the Director took over the handling of Graziadio’s leave issues. The Director specifically instructed Graziadio’s supervisor that she was not to communicate with Graziadio because the Director alone would deal with the leave dispute and Graziadio’s return to work. In light of all the evidence, the Court determined that a reasonable jury could find the Director exercised sufficient control over Graziadio’s employment to be an “employer” under the FMLA, and therefore individually liable for FMLA violations.
Lesson for Employers
When it comes to FMLA violations, the “employer” subject to liability may not be limited to the organization itself, and may include individual employees, such as key human resources personnel. To determine who is liable for FMLA violations, federal courts are likely to follow the lead of the Second Circuit and consider whether each defendant qualifies as an “employer” under the economic realities test.
Employers should take care to provide their supervisors, managers, and human resources personnel with adequate training and oversight with respect to the employer’s statutory obligations to its employees. Especially in leave and disability related situations, adverse employment actions – such as terminations – should be carefully scrutinized by the employer and its legal counsel to ensure that potential exposure is minimized. Although delegating such matters to a single employee, such as a Human Resources Director, may give rise to that employee’s individual liability, it will not absolve the organization of fault. Therefore, the organization must remain closely involved in these situations.
Employers with questions or concerns regarding their obligations under the FMLA or the ADA should consult with qualified legal counsel.
Case: Graziadio v. Culinary Institute of America, 15-888-cv (2nd Cir. March 17, 2016).