Considerations Before Terminating An Employee On Medical Leave

Among the most frequent calls we management-side employment lawyers receive are from clients asking whether they may lawfully terminate an employee who has been on an extended leave for medical reasons. Usually, the call comes just after the client has received a doctor’s note from the employee advising that he is unable to return to work by the previously-planned return-to-work date, and requires several more weeks off. The client’s frustration is palpable; in an exasperated tone, she often notes that the employee is a marginal performer anyway, and clearly implies that she wants to hear only five words from us -- “It is okay to terminate.”

Not so fast. Whether an employer can safely terminate an employee on medical leave depends on the answers to several critical questions.

An obvious, but sometimes overlooked, issue is has the employee exhausted his leave allotment under the federal Family and Medical Leave Act (“FMLA”), and any parallel state or local leave law, and under the employer’s policies?  Under the FMLA, an employee is entitled up to twelve weeks of unpaid leave annually for (among other reasons) his own serious health condition. Some states’ laws and some companies’ policies provide for more leave.  If the employee has not exhausted his leave entitlement under each, the employer generally should not terminate.

Another critical question is, has the employer correctly handled the employee’s leave up to now? At the start of the leave, the FMLA requires that the employer expressly tell the employee that it is designating the employee’s absence as FMLA leave and is counting each day or week of absence against the employee’s twelve-week allotment. Further, where the employee has provided at least an estimated length of his leave, the employer must also tell the employee the amount of leave it will designate as FMLA leave, how much of the leave allotment will remain at the leave’s expected conclusion, and the date by which it expects the employee to return. If the employer has not documented its compliance with each of these notice requirements, the employer probably should not terminate.

Assuming the employee has exhausted each of his leave entitlements and the employer has provided all required notices, the next question is, has the employer asked the employee whether he requires a workplace accommodation? Under the federal Americans With Disabilities Act (“ADA”) and its parallel state disability laws, an employer must engage in a dialog (known as the “interactive process”) with any employee it has reason to know may be disabled and who may need a workplace accommodation. Through this process, the employer must determine whether the employee wants an accommodation, and if so, whether there exists some reasonable accommodation that would enable the employee to perform the essential functions of his job. Where, as in the above scenario, an employee has been absent for his own medical condition for a significant period, the employer should initiate this interactive process. If the employer has not done so, it should probably not terminate.

And even if the employer has engaged in the interactive process, it should only terminate if it has concluded, after having consulted with counsel, that no reasonable accommodation is possible. Note that in the scenario presented here, where the employee’s doctor has advised that the employee requires a few more weeks off work, the client may have to grant the extended leave, because a leave extension beyond the FMLA’s twelve-weeks is often considered a reasonable accommodation.

So if the client can’t terminate the employee now, what can it do? First, it should continue to carefully track and document the employee’s absences, and keep the employee apprised of any amount of leave remaining. Second, it should consider asking the employee for a re-certification of his FMLA leave, which it is permitted to do every thirty days. Third, the client should engage in the interactive process to determine possible accommodations which would allow the employee to return to work. Only if the employee is still unable to return to work after having been given or offered a reasonable accommodation should the client consider terminating the employment. Because the reasonableness of a requested accommodation – including a leave extension -- depends on the circumstances, the client should consult with counsel before taking this step.