FMLA Basics: Family and Medical Leave Act Liability

The Family and Medical Leave Act (FMLA) is a cornerstone of federal labor law designed to help employees balance their work and family responsibilities by taking reasonable unpaid leave for certain reasons. From an Employment Practices Liability Insurance (EPLI) perspective, FMLA represents a significant source of litigation and administrative burden for employers. Missteps in identifying leave requests or improperly calculating eligibility can lead to costly lawsuits centered on interference and retaliation claims.

For those preparing for the complete EPLI exam guide, understanding the nuance of FMLA is critical because unlike some other labor laws, FMLA provides specific job-protection rights that cannot be easily waived or negotiated away. When an employer fails to provide required notices or denies a valid leave request, they open the door to statutory damages, back pay, and attorney fees—most of which are covered under standard EPLI policies, subject to specific exclusions.

In the realm of EPLI litigation, FMLA claims generally fall into two categories: Interference and Retaliation. Understanding the difference is vital for risk management and claims adjustment.

• Interference: This occurs when an employer denies, restrains, or interferes with an employee's attempt to exercise their FMLA rights. Common examples include failing to notify an employee of their eligibility, discouraging an employee from taking leave, or miscalculating the amount of leave available.
• Retaliation (Discrimination): This occurs when an employer takes an adverse employment action—such as termination, demotion, or a reduction in pay—because the employee requested or took FMLA leave. Retaliation claims often rely on temporal proximity, where the timing of the adverse action closely follows the leave request.

Employers must be cautious when discipline occurs shortly after an employee returns from leave. Even if the discipline is for a legitimate performance issue, the proximity to FMLA leave can create a prima facie case of retaliation that triggers an EPLI claim defense. You can test your knowledge on these distinctions with our practice EPLI questions.

One of the most complex areas of FMLA compliance is intermittent leave. This allows an employee to take leave in separate blocks of time or by reducing their weekly or daily work schedule. While intended to accommodate chronic conditions or ongoing treatments (like chemotherapy or physical therapy), it is often the primary source of employer frustration and administrative error.

Risk management professionals emphasize that employers cannot require employees to take more leave than necessary. However, the employer may require the employee to follow standard call-in procedures unless the medical emergency prevents it. Failure to track intermittent leave accurately often leads to "over-deducting" time, which constitutes interference, or "under-tracking," which leads to lost productivity and potential disability discrimination issues under the ADA.

When an FMLA lawsuit is filed, the EPLI policy typically responds by providing a defense. However, there are nuances in how these policies treat FMLA compared to other statutes like Title VII or the ADA. Many EPLI policies cover the defense costs for FMLA claims but may have limitations on the actual statutory damages or back pay awarded, depending on the specific policy language.

Furthermore, FMLA claims often overlap with other protected classes. For example, a request for FMLA leave for pregnancy may also trigger a Pregnancy Discrimination Act (PDA) claim. A request for leave due to a chronic back injury might trigger an Americans with Disabilities Act (ADA) claim for reasonable accommodation if the FMLA leave is exhausted. Integrated leave management is the best defense against these multi-statute claims.