Excerpted from Tennessee Employment Law Letter, which is written by attorneys at the law firms of Miller & Martin
by Daniel B. Gilmore

If an employee is admittedly ineligible for leave under the Family and Medical Leave Act (FMLA) but his employer mistakenly informs him that he is eligible before he takes leave, should the employer be prevented from denying his request? The Sixth U.S. Circuit Court of Appeals recently addressed that question and held that "lack of eligibility" is a valid defense when the employee is unable to show that he relied on his employer's statement to his detriment.

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Termination follows approved FMLA leave
Daniel Dobrowski was hired by Jay Dee Contractors, Inc., in September 2003. He was assigned to a joint venture project with the city of Detroit, overseeing certain functions at the Detroit Wastewater Treatment Plant. He had been diagnosed with epilepsy as a child and had recently decided to undergo surgery to control his seizures. His surgery was scheduled for October 15, 2004.

Before his surgery, Dobrowski discussed his need for a "leave of absence" with both his supervisor and Jay Dee's president. In response, he was sent a letter from the president stating that "[p]ursuant to the Family and Medical Leave Act, Jay Dee Contractors, Inc. will leave [your] position open for at least twelve (12) weeks from October 18, 2004." The letter included a federal form that confirmed he was being provided with FMLA leave.

Following his surgery, Dobrowski arranged with the president to return to work December 13. When he reported to work that day, the president informed him that he was being terminated because the company's work at the wastewater plant was winding down and his services were no longer needed.

Following his termination, Dobrowski filed suit against Jay Dee under the FMLA. The company asked the court to dismiss the case, asserting that Dobrowski wasn't eligible for FMLA leave because the company employed fewer than 50 employees within 75 miles of his work site. Dobrowski argued that the doctrine of equitable estoppel prevented Jay Dee from denying his eligibility because it informed him before both his surgery and leave of absence that he was eligible. The doctrine of equitable estoppel states that if you represent something to someone (orally or through silence), you are precluded from making certain arguments in your defense. The district court rejected Dobrowski's argument and dismissed the case. Dobrowski appealed to the Sixth Circuit.

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Sixth Circuit's new standard
The Sixth Circuit began by recognizing that it was undisputed that Dobrowski wasn't eligible for FMLA leave because the company didn't employ the necessary number of employees at his work site. Thus, the question before the court was whether he should be treated as entitled to the FMLA's protections based on Jay Dee's previous acknowledgment of his eligibility.

There is no clear precedent within the Sixth Circuit regarding which situations merit the application of equitable estoppel. As a result, the court looked to cases from other circuits that had relied on the U.S. Supreme Court's decision in Heckler v. Community Health Services of Crawford County, Inc. In that case, the Supreme Court clarified that to prevail on a claim of equitable estoppel, there must be:

1. definite misrepresentation of a significant fact;
2. reasonable reliance on the misrepresentation; and
3. resulting detriment to the party reasonably relying on the misrepresentation.

More specifically, the Supreme Court found that "the party claiming the estoppel must have relied on its adversary's conduct in such a manner as to change his position for the worse, and that reliance must have been reasonable in that the party claiming the estoppel did not know nor should it have known that its adversary's conduct was misleading." The Sixth Circuit clarified that Dobrowski "need not show that his employer either was aware of the true facts or intended for the statement to be relied upon."

The court noted that Jay Dee's actions qualified as a misrepresentation of Dobrowski's eligibility. However, it further found that Dobrowski had failed to show that he detrimentally relied on the misrepresentation. Although he had complied with the requirements of the FMLA, there was no evidence that he changed his behavior based on the company's misinformation.

Simply put, Dobrowski decided to have the surgery before the company informed him of his eligibility for FMLA leave, and there was no indication that the scheduling of his surgery was dependent on his eligibility. Based on his lack of reliance on Jay Dee's misrepresentation, the court affirmed the lower court's decision and dismissed the case. Daniel Dobrowski v. Jay Dee Contractors, Inc. (6th Cir., 7/8/09).

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Bottom line
Jay Dee Contractors won this case despite making a significant misrepresentation to Dobrowski and because of his lack of reliance -- something over which it had absolutely no control. In fact, in its decision, the court even provided guidance to employees on how to offer sufficient evidence to survive dismissal when making a similar claim. Employers must carefully evaluate situations in which FMLA protections may apply before agreeing to or acknowledging an employee's eligibility. Otherwise, it could find itself in the same precarious position that Jay Dee did in this case.