Second Circuit Outlines Test for Individual Liability of Human Resources Directors under the FMLA
Time 4 Minute Read

On March 17, 2016, the U.S. Court of Appeals for the Second Circuit decided Graziadio v. Culinary Institute of America, holding that sufficient evidence existed to find that the Culinary Institute of America’s (“CIA”) human resources director was an “employer” under the Family and Medical Leave Act (“FMLA”) and could therefore be held individually liable for violations of the FMLA. In reaching this decision, the court found that the economic-realities test used to analyze whether an individual is an “employer” under the Fair Labor Standards Act (“FLSA”) should also be used to determine whether an individual is an “employer” under the FMLA. The Second Circuit vacated and remanded the Southern District of New York’s summary judgment decision on the question of individual liability for further consideration under the economic-realities standard. The application of this test likely means an increased risk of individual liability for human resources directors, supervisors, and other members of management charged with violating an employee’s rights under the FMLA.

Cathleen Graziadio was an employee at the CIA who first took leave under the FMLA to care for her older son suffering from diabetes and later took leave to care for her younger son who broke his leg and required surgery. During Graziadio’s second leave of absence, the CIA’s human resources department found that the documentation supporting her necessity for leave was insufficient and refused to allow her to return to work until she provided new documentation. Although Graziadio made repeated attempts to determine when she could resume work and how she could remedy the deficiency in her paperwork, the human resources director merely reiterated the deficiencies in her documentation. Attempts to coordinate a meeting between the director and Graziadio to discuss Graziadio’s return to work also failed.

The CIA eventually discharged Graziadio for job abandonment. Graziadio sued the CIA, the director, and another supervisor, alleging interference and retaliation under the FMLA. The Southern District of New York granted summary judgment in favor of the two individuals, finding that neither constituted an “employer” under the FMLA, and therefore, neither could be held individually liable.

Graziadio appealed the dismissal of her claims against the director. On appeal, the Second Circuit ruled that the economic-realities test used to determine whether a business owner or individual supervisor may be considered an “employer” under the FLSA also applies under the FMLA. The central question under this test is whether the alleged employer possesses the power to control the worker’s FMLA rights. Graziadio v. Culinary Inst. of Am., No. 15-888-CV, 2016 WL 1055742, at *4 (2d Cir. Mar. 17, 2016). To answer this question, courts must consider the totality of the circumstances of the alleged employer’s responsibilities based on a set of “nonexclusive and overlapping” factors including “whether the alleged employer (1) ha[s] the power to hire and fire the employees, (2) supervise[s] and control[s] employee work schedules or conditions of employment, (3) determine[s] the rate and method of payment, and (4) maintain[s] employment records.” Id. The Second Circuit also made clear that it would permit consideration of any other relevant evidence, to avoid confining the test to a “narrow legalistic definition.” Id.

Applying these factors to the case at hand, the Second Circuit found that the director might constitute an “employer.” The court considered the fact that even though formal termination authority rested with the CIA’s Vice President, the director played an important role in the decision to fire Graziadio. For example, the Vice President admitted to directing the dispute to the director to handle, rather than conducting an independent investigation. Next, the court considered that the director exercised control over Graziadio’s schedule and conditions of employment with respect to her return from FMLA leave. Finally, the director sent Graziadio nearly every communication regarding her leave and employment, including her letter of termination, and the director instructed other human resources and payroll employees to refrain from communicating with Graziadio.

Cutting against the finding that the director may be an employer, the Court found the fact that routine administration of FMLA leave was handled by the payroll department. Furthermore, neither party put forth evidence about rate and method of payment. Nevertheless, the Court found that there was ample evidence to suggest that the director sufficiently controlled Graziadio’s rights under the FMLA.

The amount of control exerted by the director in this case was not disproportionate to the authority conferred upon a typical human resources director. Human resources directors, especially those subject to the jurisdiction of the Second Circuit, should be aware that their exposure to liability has likely increased. As such, it is all the more important that all human resources employees carefully comply with the requirements of the FMLA.

Tags: FLSA, FMLA
  • Partner

    Juan is managing partner of the firm’s Miami office. Juan regularly represents domestic and international clients in discrimination and harassment lawsuits, wage and hour collective actions and enforcement of ...

  • Partner

    Ryan’s labor and employment litigation experience is both broad and deep, and he is particularly skilled in defending employers against wage and hour class and collective actions. Ryan’s litigation experience also ...

Search

Subscribe Arrow

Recent Posts

Categories

Tags

Authors

Archives

Jump to Page