Employee Demoted Upon Return From Maternity Leave Cannot Raise an FMLA Claim

Originally published May 5, 2010

Can an employer take disciplinary action against an employee as a result of performance issues uncovered while the employee was on FMLA leave? Yes, according to a federal appellate court.  The appellate court held that a drug company did not violate the Family and Medical Leave Act (FMLA) when it demoted a top-level executive upon return from maternity leave for performance deficiencies unrelated to her FMLA leave. Schaaf v. SmithKline Beecham Corp. d/b/a GlaxoSmithKline, No. 09-10806 (11^th Cir. Apr. 6, 2010). 

Schaaf served as a regional vice president for GlaxoSmithKline (GSK) after several earlier promotions.  After several years in this position, Schaaf's subordinates complained about her "antagonistic and inflexible" management style, poor communication skills, "tendency to play favorites," failure to provide written feedback and a practice of sharing confidential performance evaluation information with other employees.  After investigating these claims, GSK placed Schaaf on a Performance Improvement Plan (PIP), requiring her to finalize incomplete performance reviews, attend management-training programs and complete team-building exercises with her subordinates. 

At the time the PIP was issued, Schaaf informed GSK that she was pregnant and would take maternity leave several months later.  She also expressed doubt that she could satisfy the conditions of the PIP prior to her maternity leave.  True to her word, Schaaf failed to meet several requirements before her target date and the PIP was extended multiple times prior to her maternity leave.  As a result, GSK extended the completion of the PIP until after Schaaf returned from FMLA leave.

While Schaaf was on leave, an interim vice president assumed Schaaf's region and, by all accounts, the region functioned significantly better—productivity increased, communication improved and employee morale was markedly higher.  Moreover, the interim vice president also discovered several notable administrative problems that had occurred under Schaaf's watch, including ignored expense reports and unpaid invoices from outside creditors.  Shortly before Schaaf was to return from FMLA leave, several of her subordinates requested a meeting with Schaaf's supervisor to warn him that the region's increased morale and productivity would end if Schaaf resumed her position upon her return.

When Schaaf returned to work, her supervisor gave her the choice of either accepting a demotion to a district sales manager or leaving GSK.  Schaaf accepted the demotion, but later filed an FMLA lawsuit, alleging that GSK interfered with her FMLA rights and retaliated against her because she exercised those rights.  The district court rejected her claims and dismissed the lawsuit.  Schaaf appealed.

Under the FMLA, an employer must reinstate an employee to the position she held prior to taking FMLA leave or to an equivalent position.  However, this reinstatement right is not absolute, since an employer may deny reinstatement if it can establish that it demoted or terminated the employee even if she had not been on FMLA leave. 

Schaaf claimed that because GSK learned of her performance issues while she was on FMLA leave, her legally protected leave caused the demotion.  In other words, according to Schaaf, but for the FMLA leave, GSK would have no reason to find out about her performance issues and demote her.  The Court rejected this argument as "legally incorrect" and "logically unsound."  The Court reasoned that Schaaf's reading of the FMLA would "effectively protect deficient employees from adverse employment actions, such that those workers could actually attain job security by seeking leave under the FMLA."  Such a result is "laughable," according to the Court, and not supported by policy, common sense or the FMLA itself.  Here, the evidence proved that Schaaf was demoted because of her performance deficiencies, not the leave itself.  Accordingly, the Court affirmed dismissal of Schaaf's FMLA interference and retaliation claims.

This decision is a clear win for employers.  The case itself is a great example of an employer taking immediate action to discipline an employee for performance deficiencies, a response which was supported by a thorough investigation into the employee's conduct, written documentation and use of a PIP.  Here, the employer was able to establish quite clearly that it would have issued discipline regardless of Schaaf's maternity leave and her exercise of FMLA rights.  Employers should follow GSK's lead in the manner they approach their own employees' performance problems.  However, given the risk of liability, employers should consult with their employment attorney before taking an adverse employment action against an employee returning from FMLA leave.

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