Employer Can't Force Paid Leave Substitution under FMLA

March 7, 2007 (PLANSPONSOR.com) - A freight hauling company mistakenly required an employee on medical leave to also burn up paid sick and vacation leave, a federal appellate court has ruled.

The 7 th U.S. Circuit Court of Appeals ruled that Roadway Express violated a U.S. Department of Labor (DoL) regulation precluding forcing an employee to substitute paid leave for leave under the Family and Medical Leave Act (FMLA).

The DoL regulation, 29 C.F.R. § 825.207(d)(1), bars such a move when the employee is receiving disability benefits – in the case of plaintiff Alice Repa from the Wisconsin Health Fund (WHF), a multiemployer health and welfare plan, the appellate court asserted.

The 7 th Circuit ruling written by Circuit Judge Daniel Manion upheld a decision in favor of Repa by U.S. District Judge Charles Clevert, Jr. of the U.S. District Court for the Eastern District of Wisconsin.

According to the case history in Manion’s opinion, Repa suffered a non-work-related injury that required surgery and a six-week absence from work. She was granted a disability benefit of $300 per week for six weeks from the WHF.

At the same time, Repa was granted FMLA leave by Roadway, which notified her that she was required to substitute any accrued paid leave for any unpaid FMLA leave. When she came back to work, Roadway paid Repa for five days of sick leave and two weeks of vacation.

Repa sued to challenge Roadway’s requirement that she use paid sick and vacation leave when she was receiving disability benefits, contending that the DoL regulation made inapplicable the FMLA provision allowing for such a move under other circumstances. The company contended that FMLA actually permitted such a policy.

The court rejected Roadway’s argument that the regulation only applied to benefits paid by an employer’s temporary disability plan, not a third-party plan. The appellate court found no language in the regulation making such a limitation.

The decision in Repa v. Roadway Express, Inc, 7th Cir., No. 06-2360, 2/26/07 is  here .