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Watch Out – Human Resources Personnel Might be Found Individually Liable under the FMLA

In a recent decision, Graziadio v. Culinary Institute of America, the Second Circuit held that a Director of Human Resources could potentially be individually liable to a former employee for Family Medical Leave Act (“FMLA”) violations.

In Graziadio, Cathleen Graziadio worked as a payroll administrator with the Culinary Institute of America (“CIA”).  Her son was hospitalized with complications from Type I diabetes, and she sought to have her leave of absence as well as additional leave covered by the FMLA.  On the day she submitted a medical certification for her son, her younger son broke his leg playing basketball and needed immediate care.  As a result, she requested additional FMLA paperwork from Human Resources.  She also indicated that she would need to work a part-time schedule for several weeks to care for her sons.  The Human Resources Director did not provide the paperwork and sent Graziadio a letter stating that the medical certification she submitted for her diabetic son did not warrant FMLA leave. Ultimately, CIA fired Graziadio.

Graziadio brought claims for FMLA interference and retaliation as well as an associational disability discrimination claim under the Americans With Disabilities Act (“ADA”).  Graziadio argued the Human Resources Director was an “employer” under the FMLA and thus individually liable for the FMLA claims.  The District Court granted the CIA’s motion for summary judgment and dismissed Graziadio’s claims in their entirety. The Second Circuit vacated the decision in part.

An individual may be held liable under the FMLA only if she is an “employer,” which is defined as encompassing ‘any person who acts, directly, or indirectly, in the interest of an employer to any of the employees of such employer.’ 29 U.S.C.  § 2611(4)(A)(ii)(I).  Under this test, Courts ask ‘whether the alleged employer possessed the power to control the worker in question, with an eye to the ‘economic reality’ presented by the facts of each case.’   To do so, they consider a “nonexclusive and overlapping set of factors,” intended to “encompass the totality of circumstances.”  These factors include whether the alleged employee (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.  No one of the four factors is dispositive.

The Second Circuit noted that in the FMLA context, courts assessing the economic realities test of an employment relationship have construed this test as asking whether the putative employer “controlled in whole or in part plaintiff’s rights under the FMLA.”

In the case at issue, the Second Circuit reasoned that while the Vice President of Administration and Shared Services testified that he had the ultimate authority to terminate Graziadio, the Human Resources Director made a recommendation for termination.  Additionally, the Vice President made no independent investigation of Graziadio’s leave claims, and the Human Resources Director had the sole authority to handle the requested FMLA leave.  Given all the evidence, the Second Circuit concluded that a “rational jury could find, under the totality of the circumstances” that the Human Resources Director exercised sufficient control over Graziadio’s employment to be subject to liability under the FMLA.  It therefore vacated the dismissal of Graziadio’s FMLA claims against the Human Resources Director.

At this stage, it is unclear whether a jury will find the Human Resources Director was in fact Graziadio’s employer for purposes of her FMLA claims.  However, for employers and human resources personnel, this decision serves as a reminder that individual employees may be held personally liable for FMLA claims.  It also puts employers on notice that they may want/need to indemnify human resources personnel for administering the Company’s FMLA leave as well as pay defense costs when the human resources personnel is individually named in a lawsuit.  As Human Resource personnel become more sophisticated, such coverage may be a key term to offer candidates in order to convince them to accept an offer of employment.  As we all know, the world continues to change!

Brody and Associates regularly provides counsel on the FMLA, as well as employment law issues in general.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.