Jottings By An Employer's Lawyer

Tuesday, July 17, 2007

The Progeny of Arbaugh - Coverage by Estoppel

Maybe it's just the law of unintended consequences, or perhaps more fairly for the Court, the law of unanticipated consequences, but when the Supreme Court held in Arbaugh v. Y & H Corp. that the 15 employee limit was not jurisdictional it barely got more than a ho-hum, at least from me.

Just to prove my point I quote myself from my initial post on Arbaugh:
"In a case that is of more importance to the technicalities of the legal process than to employment law, the Supreme Court yesterday held that the requirement of 15 employees for coverage of Title VII is an element of the plaintiff's case, not a jurisdictional prerequisite."
And I finished off with this —

"All in all a tidy summary of federal courts law and the principle that federal courts are courts of limited jurisdiction --- but not an employment law blockbuster."
— which could prove yet another faulty prediction on my part.

That will certainly be true if a trend that I first noted last month in Danger for the Small Employer: 'Estopping' yourself into coverage where the 6th Circuit held that there were circumstances where an employer with fewer than 20 employees could create coverage by its actions, continues.

It did continue on Friday the 13th, when Judge Mark Bennett of the Northern District of Iowa, in a 26 page opinion, based in part on Arbaugh, held it is possible that an employer with fewer than 50 employees within a 75 mile radius, could still find themselves "required" to grant FMLA leave, based on their conduct, even though not technically within the coverage of the statute. Myers v. Tursso Company Inc.

Many large companies have taken the position that they would treat all employees the same under the FMLA, even though some might not technically qualify because of the 50 employees within 75 mile requirement. Their lawyers have often gone along, thinking that in a pinch they could still use the requirement as a defense if an issue arose. That may still be viable in some cases, but the Arbaugh based estoppel decisions make clear it is not always a hands down winner.

Hat tip to the folks at Employment Law 360 for the tip to the Myers decision.


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