Evidence of Misconduct Discovered During FMLA Leave May Support Employee Termination

An employee who takes leave under the Family and Medical Leave Act (FMLA) is entitled – in most instances – to be reinstated to his or her former position, with equivalent pay and benefits, upon expiration of that leave.  However, an employee is not entitled to a position or other benefit of employment to which he would not otherwise be entitled simply because he is on FMLA leave.  It is on that basis that the 7th U.S. Circuit Court of Appeals upheld the termination of a company’s Vice President of Information Technology, even though the termination occurred while that individual was on an FMLA leave.  Daugherty v. Wabash Center, Inc., 7th Cir., No. 08-3104, August 14, 2009.

During his work history with Wabash, a not-for-profit agency serving individuals with developmental disabilities, Michael Daugherty worked his way from maintenance assistant to VP of the agency’s IT group.  In 2006, Daugherty became involved in “e-mail wars” with a number of Wabash employees.  During the same time period, he was accused of poor management techniques by the employees of an affiliated company for whom he acted as Chief Information Officer.  At a meeting on June 19, Daugherty received a written reprimand for both issues.  Daugherty agreed with the substance of the discipline and volunteered to draft a corrective action plan for himself.  Daugherty was then told that permission for his upcoming month-long vacation was being revoked because of pressing company business.  At that, Daugherty left the meeting and went to visit his doctor.  He returned to Wabash to request FMLA leave, providing a note from his doctor that he was to be “off work for 2 weeks due to medical illness.”  Although his FMLA paperwork only stated that he had been “placed under a tremendous amount of stress” at work, Daugherty was granted two weeks of leave under the FMLA.

During Daugherty’s absence, Wabash discovered that Daugherty had used the company’s credit card without authorization to order items that were delivered to his home.  In addition, on June 30, Wabash’s VP of Finance discovered that certain e-mail correspondence with Daugherty was missing from his computer.  Based upon suspicions that Daugherty was remotely accessing (and possibly sabotaging) the company’s computer system, outside experts were brought in to investigate.  Upon initial investigation, it was determined that Daugherty had failed to back-up servers, and that the company’s IT infrastructure (Daugherty’s responsibility) was deficient. 

Upon his return on July 3, Daugherty informed the company that he was taking additional medical leave.  At that point, management asked him to sign a new corrective action plan and to return his keys and passwords.  Daugherty refused, saying that such action would be “working,” and he was not to be working during leave.  He also refused subsequent requests for the keys and information. 

On July 31, a forensic expert found that Daugherty had deleted over 5,000 files from his computer on June 19, the day of the original disciplinary meeting.  On August 9, Wabash terminated Daugherty’s employment, citing the missing files, violation of purchasing protocols, poor IT practices, failure to turn over keys, and poor management style.  Daugherty filed suit in September 2006, claiming that his termination was in violation of the FMLA.  The district court granted summary judgment in favor of the company.  That decision was affirmed on appeal by the Seventh Circuit.

Daugherty argued that Wabash was required to reinstate him after his FMLA leave and that he could not be fired before that reinstatement.  However, FMLA only entitles an employee to the same position to which he would have been entitled had he not gone on leave.  Because the information discovered by Wabash during Daugherty’s leave would have justified his termination had the leave not been taken, there was no reason to wait until Daugherty’s return in order to fire him.  Because Daugherty acknowledged the fact that he had violated company policies, there was no disputed fact that his actions factually supported the termination. 

Once again, a company’s complete investigation – here, involving an outside consultant – and full and contemporaneous documentation of the results form the basis of a successful legal defense.   Employers should recognize that in this atmosphere of layoffs, restructurings, and increased litigation, those two factors have continued to be the critical elements of an effective defense to an employee’s claims of discrimination and illegal treatment.