Finance News & Insights

Heads up: Court says FMLA violations will likely end up costing double damages

Another reason to make sure your HR folks have airtight FMLA processes: If your company winds up guilty of an FMLA violation in court, you’ll most likely have to fork over double damages.  

That’s the takeaway from Crain v. Schlumberger Technology Co., an FMLA ruling that essentially said that if an employer is found guilty of violating the FMLA, it will have to pay the jury verdict as well as an additional amount equal to that figure in liquidated damages — aka, “double damages.”

Bad timing

In the case, an employee who had already been selected for a reduction in force (RIF) let the company know he needed to have surgery. Although he didn’t specifically mention the FMLA, he did ask about the availability of short-term disability.

The company had plan to terminate the employee in March, but expedited it to early February as a result of the surgery disclosure.

That prompted the employee to file an FMLA interference claim.

What the court said

A jury ruled that the employer had, in fact, interfered with the employee’s FMLA rights and awarded him double damages.

The company tried to argue that the court shoudn’t double the jury’s original verdict award of $77,000. But a court affirmed the jury’s verdict and liquidated damages award, and even noted that proof of unlawful intent isn’t needed to support an FMLA interference claim.

Three words basically sealed the company’s fate: No good faith. According to the court, employers bear a “substantial burden” to prove good faith and overcome the “presumption of entitlement to liquidated damages.”

To do this, an employer must prove it:

  • Acted with a subjective intent to comply with the FMLA, and
  • Acted objectively reasonable in its application of the FMLA.

The court said that even though the employer in this case had an FMLA policy in its handbook and reviewed the list of employees selected for the RIF hadn’t specifically requested FMLA, the employee here had mentioned short-term disability.

Therefore, the company’s failure to consider the potential application of FMLA was neither reasonable nor in good faith.

Result: double damages.

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