Federal Court Rules HR Director May Be Individually Liable Under FMLA

The Second Circuit Court of Appeals has ruled, in Graziadio v. Culinary Institute of America, that human resources personnel and supervisors who handle the administration of leave requests under the Family and Medical Leave Act ("FMLA") may be personally liable for FMLA interference and retaliation claims. In particular, the court held that a human resources ("HR") director may be liable, as a "person who acts, directly or indirectly, in the interest of an employer" toward an employee.

Background. In Graziadio, the plaintiff initially took two weeks of FMLA leave to care for her sick child, and then later took additional leave to care for another child who had broken his leg. The employer's HR director took issue with the plaintiff's FMLA paperwork, claiming it was insufficient to justify the absences, and refused to allow her to return to work until she provided new documentation.

The HR director never clarified what additional information was needed or why the original paperwork was deficient. Nevertheless, the plaintiff provided the HR director with updated medical information. Again, the HR director did not respond and ultimately terminated the employee for job abandonment.

The plaintiff responded by suing the employer and the HR director for interference and retaliation under FMLA.

Second Circuit's Decision. The court found that there was sufficient evidence for the plaintiff to advance her FMLA claim against the HR director individually as her "employer." Applying the "economic reality test" used in Fair Labor Standards Act cases, the court found that issues existed as to the HR director's authority, since she appeared to have played an important role in the decision to fire the employee and also controlled her rights under FMLA. 

NOTE: The key issue under the economic reality test is the power an individual has over the employee's terms and conditions of employment, including whether the individual has the power to hire and fire the employee, maintains employment records, determines the rate and method of pay, or sets and supervises the work schedule. In an FMLA case,, the most critical factor is whether or not the individual controlled the plaintiff's FMLA leave.

The authority to terminate an employee in this case rested with the employer's president. However, because the president did not conduct an independent investigation and instead agreed with the HR director's recommendation to terminate, the court found that the HR director played an important role in the plaintiff's termination. The court also concluded that the HR director exercised control over the employee's schedule and conditions of employment by handling the FMLA leave, including reviewing the paperwork and communicating with the employee. For the foregoing reasons, the court said the HR director could be individually liable for FMLA violations.

Takeaway for Employers. Employers should inform HR personnel and supervisors handling FMLA requests of their potential liability and ensure that they are regularly trained on compliance. Moreover, employers or HR personnel who choose to challenge an employee's FMLA paperwork must be prepared to provide specific reasons to justify their actions.