On May 16, 2017, the 4th Circuit issued an opinion in Waag v. Sotera Def. Solutions, Inc., 2017 U.S. App. LEXIS 8587, providing further guidance regarding an employer’s responsibilities to return an employee to work following FMLA leave.
Mr. Waag brought the action against his former employer, Sotera Defense Solutions, Inc., a federal defense contractor, alleging a violation of the Family Medical Leave Act by not restoring him to his position when he returned from a medical leave; by placing him in a job that was not equivalent to the one he held before the leave; and by terminating him from the new job because he took medical leave. The District Court for the Eastern District of Virginia granted summary judgment to the employer. The 4th Circuit affirmed.
Mr. Waag had been employed with Sotera and a predecessor company for a number of years. In early October 2012, Mr. Waag became the Program Manager of Sotera’s NexGen program. The NexGen program was created as result of Sotera being selected by the U.S. Army as a non-exclusive prime contractor for a software and systems engineering services next generation program. The program manager position was largely a marketing/business development role and was paid out of Sotera’s overhead costs, not directly billed to the government.
On Oct. 17, 2012, shortly after Mr. Waag’s selection for the program manager role, Mr. Waag fell off the roof of his house and severely injured his hand. He informed Sotera that he would likely be out of work until Dec. 31, 2012. Based on this information, Sotera filled the program manager role with another employee so that the project would not stall during Mr. Waag’s absence. Sotera informed Mr. Waag of this decision, but assured him that his employment was not in jeopardy.
Due to federal budget sequestration, the NexGen project was subsequently delayed, and the program manager role was less than a full-time position. The employee performing the role testified that only 10 to 20 percent of his time was spent on his NexGen duties. When Mr. Waag was released to return to work, he was assigned to a different supervisor and given a role helping to grow Sotera’s Electronic Warfare Program (EWP). The EWP was tasked with preparing to bid on a specific contract. Mr. Waag’s salary and benefits were exactly the same in the new position. Just as in the project manager role, Mr. Waag’s salary was paid out of overhead and he had no supervisory responsibilities.
As a result of continued federal budget cuts, Sotera began a series of employee layoffs. When it failed to win the specific contract at issue, the EWP program experienced significant layoffs, including Mr. Waag’s supervisor. Mr. Waag, an overhead employee, was included in the first round of significant layoffs. The employee who had replaced Mr. Waag as program manager for the NexGen program was not laid off. Sotera explained that while his NexGen duties were minimal, this employee was integral to a number of other important projects that provided significant revenue.
In affirming the district court’s decision to grant summary judgment for Sotera, the 4th Circuit found that Mr. Waag’s reassignment upon his return from FMLA was sufficient because the FMLA only requires that an employee be restored “to either the same position or an equivalent position.” The 4th Circuit, based on the language of 29 C.F.R. § 825.214, held that an employee returning from FMLA leave may be restored to an equivalent position even if the employee has been replaced in his original position. Mr. Waag did not have an absolute right to be reinstated to his original position, even though it still existed within the company.
Secondly, the 4th Circuit found that the EWP position was equivalent to the NexGen program manager position. In so ruling, the 4th Circuit considered that: (1) the salary was the same for both positions; (2) Mr. Waag was eligible for bonuses in both positions; (3) the benefits were the same for both positions; (4) the worksite was the same for both positions; (5) Mr. Waag’s position within the company hierarchy stayed the same in both positions—he maintained the title of “senior director” and he reported to a “vice president”; and, (5) the primary duty of both positions was business development. The 4th Circuit rejected Mr. Waag’s arguments regarding his daily to-do lists being different in the positions and that the prestige for the positions was different within the company. The 4th Circuit likewise declined his argument that the EWP position was a “sham” position created to mask Sotera’s plan to terminate Mr. Waag. The 4th Circuit found no support in the evidence for this allegation and thus determined the allegation alone could not create an issue of material fact.
Finally, the 4th Circuit affirmed summary judgment on Mr. Waag’s retaliation claim, finding that based on the budget cuts Sotera faced, Mr. Waag would have lost his position whether or not he would have taken leave. The fact that the individual who was placed in the NexGen program manager role did not lose his job was not determinative because he was involved in several other critical projects that did not involve Mr. Waag either before or after his leave.
This decision is important for both employer and employee counsel. FMLA remains a difficult situation for many employers and this guidance will aid those of us who advise employers regarding return to work situations, as well as employee counsel who may be advising employees regarding their rights upon returning to work.
Sabrina Presnell Rockoff is managing partner of McGuire, Wood & Bissette, P.A. in Asheville. She represents employers in all aspects of employment law, including general advice, drafting of policies and contracts, and representation before all related governmental agencies and in federal and state courts.