HR director may be individually liable for FMLA and wage violations

A human resources director named, individually, as a defendant in a FMLA and wage lawsuit by an employee fired upon returning from medical leave, will remain on the hook in the lawsuit, a federal district court in Pennsylvania ruled. Denying the defendants’ motion to dismiss, the court concluded that the plaintiff sufficiently alleged that the individual defendant had supervisory authority over her and was responsible in part for the alleged FMLA violation. She also sufficiently alleged a claim for remedy under the state’s Wage Payment and Collection Law.

Requested leave.

During her first year of employment with the defendant, a company that held federal contracts, the plaintiff advised senior executives that she believed the employer was not in compliance with those contracts or federal law. A few months later she learned that she would need knee surgery. She contacted the Senior Director of HR, who confirmed that the leave time she required would include short-term disability and FMLA leave. She and her physician completed and returned the required paperwork and her benefits and leave requests were approved.

Given specific return date, then fired.

She underwent surgery and approximately two months later informed the HR director, who was also her immediate supervisor, that she could return to work, so long as she could be given an accommodation limiting travel for the following month. She was contacted regarding work-related tasks, but she did not receive an answer regarding her multiple requests to return to work over the following weeks. Eventually she was told to take additional time and given a date to return. When she returned, however, she was immediately fired. She alleged that the defendants informed her that she could be fired without violating the FMLA because she had exceeded 12 weeks of leave.

Dismissal and amended complaint.

She filed suit, naming both the HR director and the entity as defendants. The defendants moved to dismiss two of the counts against both defendants and one count against the individually named HR director. The court granted that motion, but also granted the employee leave to file an amended complaint, again alleging interference and retaliation under the FMLA and violation of the state wage law. She filed an amended complaint and the defendants moved, again, to dismiss.

Individual liability sufficiently alleged.

This time around, the defendants were unsuccessful. First, the court found that the employee stated a claim for individual liability under the FMLA against the HR director. The FMLA contemplates individual liability, defining an “employer” to include “any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer.” FMLA regulations and Third Circuit precedent also support the conclusion that an individual supervisor could be liable. And in the employee’s complaint she included enough factual allegations to support the argument that the HR director had supervisory authority over her and was responsible in part for the violations alleged. The director clearly could fire her and, in fact, did just that. The employee also alleged sufficient facts to support a conclusion that the director supervised and controlled her work schedule. She alleged that the supervisor directed her on taking leave and controlled when she could return.
The other factors considered as part of the “economic reality” test applied in the Third Circuit, including whether the HR director determined rate and method of payment and maintained employment records, while not supported by facts specifically alleged by the employee, were at least plausible. The fact that the defendant was the Senior Director of Human Resources made it “facially plausible” that she met the “requisite level of control.” No one factor, moreover, was “dispositive” and what the employee had alleged was sufficient.

Statutory remedy.

Second, the court concluded that the employee stated a claim for a violation of the state wage law. Contrary to the defendants’ assertions, the employee did not plead that she was contractually entitled to the expense reimbursement and bonuses she alleged she was denied. Instead, she alleged that an implied oral contract existed. A plaintiff can bring a claim under the state law with such allegations, the court explained. The employee alleged that at the time of her departure, she had entered into oral contracts with her employer under which she was entitled to over $10,000 in reimbursements and commission payments of nearly $6,000. She did not assert a breach of contract claim, but instead asserted a claim for a statutory remedy.

Expenses and commissions.

With regard to the reimbursement-related claim, she alleged that the employer had a policy, pattern, and/or practice of reimbursing such expenses and had previously reimbursed her. She alleged that she submitted documentation of the unpaid expenses after her termination and was told that the documentation was “in order” and that she would be reimbursed. She alleged that the very next day, however, she was told that she would not be reimbursed unless she signed a release for all claims and causes of action against the employer. This, the court explained, provided “further support” for the employee’s argument that she had a “‘reasonable expectation’ of compensation” by the defendant and that the HR director had done something from which a promise to pay could be inferred.
The defendants did not dispute that the employee was entitled to commissions while employed. Instead, they argued that under the employer’s incentive compensation plan former employees are not entitled to commissions. However, the employee argued that she did not execute that plan and, instead, alleged that commissions had been paid based on an oral contract. Accepting those allegations as true, the court concluded that she stated a claim for relief.

SOURCE: Edelman v. Source Healthcare Analytics, LLC, (E.D. Pa.), No. 16-6280, July 18, 2017.
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