Upholds Employer’s “Honest Belief” That Employee Committed Disability Fraud

A federal appellate court recently upheld the dismissal of a lawsuit brought by an employee who claimed that he was terminated in retaliation for his use of protected leave under the Family and Medical Leave Act (FMLA). According to the Sixth Circuit Court of Appeals, the employee’s retaliation claim failed because the employer had an “honest belief” that the employee had committed disability fraud. Seeger v. Cincinnati Bell Telephone Co., No. 10-6148, Sixth Circuit Court of Appeals (May 8, 2012).

Factual Background

Tom Seeger was employed as a network technician by Cincinnati Bell Telephone Company (CBT). In August 2007, Seeger began experiencing pain and numbness in his left leg. On September 5, 2007, a physician confirmed that Seeger had a herniated lumbar disc, and Seeger commenced an approved FMLA leave of absence the same day.

On September 19, Seeger was examined by Dr. Michael Grainger, his primary care physician. Dr. Grainger observed that it was difficult for Seeger to change positions, get in and out of a chair, and walk. The following day, Dr. Grainger’s office left a message for CBT that Seeger was unable to perform any restricted work.

On September 23, Seeger attended an Oktoberfest festival in Cincinnati for approximately 90 minutes, during which time he admittedly walked a total of 10 blocks. While at the festival, Seeger encountered several co-workers. One co-worker observed that Seeger was able to walk, seemingly unimpaired, for approximately 50 to 75 feet through the crowd, and the co-worker reported his observations to CBT’s HR Manager. On October 15, 2007, Seeger reported to Dr. Grainger that he had been asymptomatic for two days, and Dr. Grainger authorized his return to work. Seeger resumed his full-time position on October 16, 2007.

Meanwhile, CBT investigated the matter by obtaining sworn statements from Seeger’s co-workers and by reviewing his medical records, disability file and employment history. Based on the inconsistency between Seeger’s reported medical condition and his behavior at Oktoberfest, CBT decided to suspend Seeger’s employment and scheduled a suspension meeting with him. At the meeting, Seeger defended his actions and denied committing disability fraud. CBT invited Seeger to submit any relevant information, and Seeger provided a letter from Dr. Grainger. The letter stated, in part, that “[w]alking for one and a half hours at one’s own pace doesn’t equal working for an eight hour day nor is it reasonable to assume that he could perform even limited duties for an eight hour day.”

Ultimately, CBT concluded that Seeger had “over reported” his symptoms and terminated his employment. Seeger filed a lawsuit alleging that he was fired in retaliation for taking protected leave. The trial judge dismissed the suit and Seeger appealed.

Legal Analysis

While the Sixth Circuit determined that Seeger established a prima facie case of retaliatory discharge due to the short amount of time between his return from FMLA leave and his termination, it also concluded that CBT articulated a legitimate, nondiscriminatory reason for discharging Seeger. In the court’s words, “Fraud and dishonesty constitute lawful, nonretaliatory bases for termination.”

The court then considered whether Seeger produced adequate evidence demonstrating that CBT’s professed reason was a pretext for discrimination. Essentially, Seeger attempted to show that there was no factual basis for CBT’s proffered reason for discharging him because CBT had ignored medical evidence in its possession that Seeger was responding to treatment, and his pain had improved before Oktoberfest.

Under the “honest belief rule,” the inference of pretext is not warranted where the employer can show an honest belief in the proffered reason. The court explained that an employer’s professed reason is deemed honestly held where the employer can show that it made a reasonably informed and considered decision before taking the adverse action. The court cautioned that an employer’s invocation of the honest belief rule does not automatically shield it from liability because the employee must be given a chance to produce evidence to the contrary.

The Sixth Circuit held that CBT demonstrated that it reasonably relied on specific facts in determining that Seeger had committed disability fraud, and Seeger failed to refute CBT’s honest belief. The court emphasized that Seeger’s argument and presentation of competing medical evidence were misdirected. “The determinative question [was] not whether Seeger actually committed fraud, but whether CBT reasonably and honestly believed that he did.”  Accordingly, the Sixth Circuit upheld the judgment in favor of CBT.

Practical Impact

According to Bruce Hearey, a shareholder in Ogletree Deakins’ Cleveland office: “The significance of this decision is that employers can protect themselves from employees who are exaggerating or misrepresenting a medical condition to get off work. To substantiate a ‘reasonably informed and considered’ belief of FMLA fraud, employers should conduct a thorough investigation, including whether the off-work activity is actually inconsistent with the medical restrictions, and give the employee an opportunity to defend his  or her actions. An employer cannot ‘jump the gun’ and act precipitously on a suspicion no matter how well founded. Here the quality of the employer’s investigation, and affording the employee an opportunity to explain his actions, were instrumental in upholding the discharge decision.”

Note: This article was published in the May/June 2012 issue of the Employment Law Authority.

Browse More Insights

Fountain pen signing a document, close view with center focus
Practice Group

Employment Law

Ogletree Deakins’ employment lawyers are experienced in all aspects of employment law, from day-to-day advice to complex employment litigation.

Learn more

Sign up to receive emails about new developments and upcoming programs.

Sign Up Now