Let’s say your company is not subject to the the Family and Medical Leave Act (FMLA) because you have fewer than 50 employees.  One of your employees tries to take FMLA leave anyway.  You deny the leave.  The employee sues.  You win, right?

Maybe not, if your employee handbook isn’t drafted carefully.  Earlier this week, a federal court refused to dismiss a case with facts similar to the above for one simple reason:  the company’s handbook stated that employees were eligible for FMLA leave.  (Peters v. Gilead Sciences Inc., No. 06-4290 (7th Cir. July 14, 2008)).

The Facts

Steven Peters was a sales rep for Gilead Sciences Inc. in Indianapolis, Indiana.  He injured his neck and shoulder and applied for FMLA leave.  The company approved his request even though the FMLA doesn’t apply because the company doesn’t have the requisite 50 employees within 75 miles of the worksite.

Unfortunately for the employer, its employee handbook quite plainly stated that employees were entitled to 12 weeks of family and medical leave if they worked at least 1,250 hours during the previous 12 months.  The company further compounded that error by sending Peters two letters approving his leave under the FMLA.

The company replaced Peters with another employee before his “leave” was over and then offered him another position.  When Peters declined, the company terminated him.

Peters sued.  The company sought to dismiss Peters’ claims because he wasn’t an “eligible employee” under the FMLA.

The Decision 

The court ruled that although Peters wasn’t eligible for FMLA leave, he could have a breach of contract or promissory estoppel claim based on the statements in the handbook and the letters.  The case was remanded back to the lower court to determine the validity of those claims.

The Lesson

Be very careful what you include in your employee handbook.  Courts are notoriously hard on companies that don’t comply with their own written policies (even if they were included by mistake).  Make sure to include language stating that nothing in the handbook creates an express or implied contract and that the company may change it from time to time at its sole discretion.

If you are unsure exactly which laws apply to your company, we hereby cordially invite you to our free July 30 webinar, entitled Every Employment Law in 60 Minutes or Less.  We’ll provide all attendees with handy summaries of every major employment law on the planet.  To register, just click on the button at the top left of the Blawg.

This entry was posted on Wednesday, July 16th, 2008 at 4:40 am and is filed under Employee Handbook, Employment Law News, FMLA. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.