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The United States Seventh Circuit Court of Appeals in Peters v. Gilead Sciences, Inc., 2008 WL 2719579 (C.A. 7 (Ind.)), recently concluded that an employee may rely on language contained in an employee handbook to support his claim for family and medical leave benefits regardless of the employee’s actual ineligibility for such benefits under the Family and Medical Leave Act (“FMLA” or the “Act”). This decision highlights the importance of a carefully drafted employee handbook, as well as proper attention to detail when determining whether an employee is eligible for various company benefits.
There are several precautions to avoid potential pitfalls that can cost a company significant time and money:
1.The handbook – A well drafted employee handbook contains an introductory section explaining that nothing contained in the handbook shall create a contract, and that all provisions can be modified at the sole discretion of the employer, even without notice to employees. Despite this caveat, however, it is still good practice to make sure that all handbook provisions are properly drafted to meet the specific needs of your particular business and its employees. Remember that one size does not fit all! Obtaining standard boilerplate language that may not be suitable for your industry, or which is not tailored to your business, can lead to serious problems.
2. Record keeping – The Peters case also highlights the importance of accurate record keeping. When evaluating an employee’s request for company benefits, it is important to determine whether that employee is eligible. For example, has the employee worked for the company a sufficient amount of time? Is he or she otherwise qualified under other requirements such as the FMLA’s 50/75 Rule?
3.Take responsibility – When mistakes occur, take responsibility for the error and correct the problem going forward. In many instances, when it appears that an employer has not acted in good faith, the employer will be at a disadvantage in the lawsuit right from the beginning.
Robin Foret, 8/4/08
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