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The Labor & Employment Report

FMLA Fraud Investigations: Employers Must Be Careful

Posted in Employee Leave (FMLA and ADA)

Here are the facts: An employer suspected an employee of fraudulent misuse of FMLA leave.  It hired a private investigator to watch the employee over a six-day period when the employee was taking FMLA leave for severe back pain.  The investigator reported that the employee went hunting several times – one time for ten hours.  The employer terminated the employee for fraud and dishonesty in relation to his use of FMLA.  Seems pretty clear cut, doesn’t it?

In Turner v. Parker-Hannifin Corp., the U.S. District Court for the Western District of Michigan disagreed.  The Court questioned whether it was reasonable for the employer to terminate the employee based solely on the investigator’s report.  The Court noted that the employer did not typically conduct surveillance on employees taking FMLA leave, and that its “lack of experience in this area appears to reflected in the quality of the Report it requested and received.”  The Court found that the report did not address whether the employee’s hunting activities were inconsistent with his doctor-imposed restrictions, and did not indicate whether the employee had engaged in specific actions (like bending, twisting, heavy lifting, etc.) that were inconsistent with his assertion that he could not work.

The Court further stated that the employer failed to consider the employee’s actual medical condition or limitations.  Significantly, the Court was troubled by the employer’s failure to give the employee an opportunity to explain his activities.

What is the lesson here?  As I mentioned in my earlier five-part blog series on managing potential FMLA fraud, employers can conduct surveillance of employees suspected of FMLA fraud.  This case serves as a warning that the information sought through the surveillance must be focused on the employee’s actual physical actions during the surveillance period, and the employer must consider whether those actions are inconsistent with the doctor-specified limitations for the employee.

In addition, before taking action against the employee, it is important to give the employee the chance to explain.  This plays into a factfinder’s (whether a court, jury, or government agency) basic sense of fairness.  Plus, you never know – there might actually be a reasonable explanation for the perceived discrepancy.