Jottings By An Employer's Lawyer

Wednesday, December 15, 2004

10th Cir. - FMLA Regulation on "Worksite" Arbitrary, Capricious and Unenforceable


It seems it takes about a decade for a new employment statute to become widely known, cases to be filed and appellate decisions issued on a regular basis. Sure enough, the volume of appellate decisions seems to be increasing as we begin the 2nd decade of the FMLA. For the second time in a week, an appellate court has occasion to address one unusual aspect of the FMLA, the so called 50/75 rule.

In order to be an eligible employee (and thus eligible for FMLA leave) the employer must have 50 employees within a 75 mile range of the employee's worksite. As the 6th Circuit held last week, see my previous post, an employee ineligible because of the 50/75 rule can not bring a retaliation claim. In Harbert v. Healthcare Services Group, Inc. (10th Cir. 12/13/04), the issue was entitlement to FMLA leave itself. Harbert was an account manager for HSG which provided housekeeping and laundry services to long-term care institutions. She was assigned and worked on a daily basis at Sunset Manor in Brush, Colorado. She reported to a regional manager who was in Golden, Colorado. Under these facts the parties did not dispute that she was jointly employed by HSG and Sunset Manor. At issue was the DOL regulation defining "worksite" in cases of joint employment, 29 C.F.R. 825.111(a)(3):
For purposes of determining that employee's eligibility, when an employee is jointly employed by two or more employers (see 29 C.F.R. ยง825.106), the employee's worksite is the primary employer's office from which the employee is assigned or reports. The employee is also counted by the secondary employer to determine eligibility for the secondary employer's full-time or permanent employees.
The rub of course is that there were 50 employees within 75 miles of Golden, but not 50 employees within 75 miles of Brush. Under the regulation, Harpert was entitled to FMLA leave because she reported to Golden; HSG had denied her leave.

Since there was no argument for compliance under the regulation, HSG took another route and attempted to blow it up. Successfully as it turns out. Although the dissenting member of the panel, noted that it was "heavy medicine" to overturn a regulation, that is exactly what the Court found -- at least as applied in this circumstance, the regulation was "arbitrary, capricious, and manifestly contrary to the FMLA."

Although this exact fact pattern may not show up often, its significance may be that it is yet another FMLA regulation that an appellate court has refused to uphold. So far, the Clinton administration FMLA regulations have not fared all that well under Reagan/Bush (I and II) led courts. As more cases arise, stay tuned for more clashes.

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