Opinion ID: 774361
Heading Depth: 2
Heading Rank: 2

Heading: FMLA Coverage of Bachelder's 1996 Leave

Text: 38 Construing the statutory language and the Department of Labor's regulations, the district court held that Bachelder's February 1996 absences were not protected by the FMLA. We conclude that the district court's understanding of the statutory and regulatory scheme was erroneous. 39 The leave year regulation, 29 C.F.R. §§ 825.200, allows employers, at their option, to calculate the twelve-month period in which an employee is limited to twelve weeks of protected leave by one of four methods. Under the two fixed-year methods, the employee could use up to twelve weeks of leave at any time during the twelve-month period selected by the employer. 29 C.F.R. §§ 825.200(c). 12 For example, an employee whose employer had adopted the calendar year method could, consistently with the Act, take 12 weeks of leave at the end of the year and 12 weeks at the beginning of the following year. Id. On January 1, this employee would be entitled to a full bank of FMLA-protected leave, no matter how recently, or how much, she had exercised her entitlement to protected leave the previous year. 40 Under the rolling method, each time an employee takes FMLA leave the remaining leave entitlement would be any balance of the 12 weeks which has not been used during the immediately preceding 12 months. Id. Thus, if an employee used her full allotment of twelve weeks of FMLA leave starting on February 1, she would be entitled to no additional days of FMLA leave until February 1 of the following year. 41 The FMLA leave year regulation, while allowing employers flexibility in deciding how to comply with the Act, also includes various safeguards for employees. First, the employer must apply its chosen calculating method consistently to all employees. 29 C.F.R. §§ 825.200(d)(1). Second, if the employer has failed to select a calculating method, the regulations state that the method that provides the most beneficial outcome for the employee will be used. 29 C.F.R. §§ 825.200(e). By preventing employers from calculating FMLA leave eligibility in their own favor on an ad hoc, employee-by-employee basis, the leave year regulation encourages the employer to choose its calculating method prospectively. By doing so, the regulation not only prevents unfairness to employees through retroactive manipulation of the leave year, but also encourages a system under which both employees and employers can plan for future leaves in an orderly fashion. 13
42 The regulations allow employers to choose among four methods for calculating their employees' eligibility for FMLA leave, but they do not specifically state how an employer indicates its choice. America West contends, correctly, that the FMLA's implementing regulations do not expressly embody a requirement that employers inform their employees of their chosen method for calculating leave eligibility. The regulations nonetheless plainly contemplate that the employer's selection of one of the four calculation methods will be an open one, not a secret kept from the employees, the affected individuals. 43 First, the regulations require covered employers who provide any written guidance to employees concerning employee benefits or leave rights, such as in an employee handbook, to incorporate information on FMLA rights and responsibilities and the employer's policies regarding the FMLA therein. 29 C.F.R. §§ 825.301(a)(1) (emphasis added). 14 Because America West has an employee handbook, it is bound by §§ 825.301(a)(1). 44 Scattered throughout the Act and the regulations are choices for employers in how to comply with the statute. See, e.g., 29 U.S.C. §§ 2612(d)(2) (permitting employers to require employees to use their accrued paid leave time for FMLA-qualifying purposes); 29 C.F.R. §§ 825.207(b) (same); 29 U.S.C. §§ 2613(a)(4) (permitting employers to require employees to provide medical certification that the employee can return to work after FMLA-qualifying leave); 29 C.F.R. §§ 825.310 (same). Section 825.301(a)(1), by its terms, requires employers to notify employees of the choices they have made. As the Department of Labor explained in announcing §§ 825.301(a)(1): 45 The purpose of this provision is to provide employees the opportunity to learn from their employers of the manner in which that employer intends to implement FMLA and what company policies and procedures are applicable so that employees may make FMLA plans fully aware of their rights and obligations. It was anticipated that to some large degree these policies would be peculiar to that employer. 60 Fed. Reg. at 2219. 46 The rule allowing employers a choice of calculating methods is one example of the flexibility afforded to employers in complying with the FMLA. Section 825.301(a)(1) requires employers to notify their employees of this choice, just as it requires employers to notify their employees of other policies adopted to comply with the Act. 15 47 Moreover, the leave year rule expressly requires notice in particular situations. Although these notice requirements do not explicitly require that employees be informed of the initial selection, they would be meaningless if the regulations as a whole allowed employers to conceal the initial selection from their employees. 48 For example, the leave year regulation provides that [a]n employer wishing to change to another alternative [for calculating employees' FMLA leave eligibility] is required to give at least 60 days notice to all employees, and the transition must take place in such a way that the employees retain the full benefit of 12 weeks of leave under whichever method affords the greatest benefit to the employee. 29 C.F.R. §§ 825.200(d)(1) (emphasis added). The 60-day rule demonstrates that employees are entitled to act in reliance on their employer's choice of a calculating method in, for example, scheduling elective surgery or deciding which spouse will stay home to care for a seriously ill family member. Employees cannot reasonably act in reliance on an employer's initial policy choice if that choice was kept secret from them. Moreover, notifying employees of a change of methods is only meaningful if they are aware that another method was previously in use. For both these reasons, the regulations clearly contemplate that the employees not be kept in the dark concerning their employer's initial selection. 49 By the same token, [i]f an employer fails to select one of the options, . . . [t]he employer may subsequently select an option only by providing the 60-day notice to all employees of the option the employer intends to implement.  29 C.F.R. §§ 825.200(e). Employees would not realize that their employer had fail[ed] to select a calculating method, such that they would be entitled to notice of a belated selection, unless the employer had a duty to provide timely information initially regarding its selection. Rather, the employer's failure to select a method is best understood to include the failure to inform employees of its selection. 50 The only sensible reading of the regulations taken as a whole, therefore, is that an employer's selection of a calculating method must be an open rather than a secret act, necessarily carrying with it an obligation to inform its employees thereof. 16 That the Labor Department so understood its own regulations is confirmed by the Department's statement, when announcing the regulations, that [e]mployers must inform employees of the applicable method for determining FMLA leave entitlement when informing employees of their FMLA rights. 60 Fed. Reg. at 2200. 51 Further, as to any leave request made before the employer has thus selected a calculating method, the employer may properly be held to the rule that the option that provides the most beneficial outcome for the employee shall be used. 29 C.F.R. §§ 825.200(e). To hold otherwise would force employees to bear the risk of their employer's failure properly to inform them of the calculating method that will be used. 52 We therefore conclude that an initial selection of a method for calculating the leave year must be an open--not a secret-one before it can be applied to an employee's disadvantage.
53 The question remains whether America West adequately notified its employees that it had chosen the retroactive rolling leave year calculation method. America West contends, and the district court agreed, that, because its employee handbook states that employees are entitled to up to twelve calendar weeks of unpaid [FMLA] leave within any twelve month period, it provided sufficient notice to its employees that it uses the rolling method for calculating leave eligibility. We disagree. 54 This statement from the America West handbook does nothing more than parrot the language of the Act. See 29 U.S.C. §§ 2612(a)(1) (providing that an eligible employee shall be entitled to a total of 12 workweeks of leave during any 12-month period). Pursuant to the authority granted to it by Congress, however, the Labor Department determined that the rolling method is not the only system permitted by the statute; the Department interpreted the statutory language to allow for three other calculating methods as well. So, the Department construed the statute's reference toany 12-month period to include a variety of differently-calculated 12-month periods, as chosen by the employer, thereby promoting employer flexibility. The Department then proceeded to enumerate four methods of determining FMLA leave eligibility, each of which, it necessarily determined, was consistent with the statute's any 12-month period language. 17 55 True, in the preamble to its final rule, the Labor Department noted that the rolling method most literally tracks the Act's language. See 60 Fed. Reg. at 2200 (While many comments were received opposing [the rolling] method, it has been retained as one of the available options because it is the one method that most literally tracks the statutory language.). But the very fact that the regulation permits employers to use any of four calculating methods is fatal to America West's argument: Because the statute can reasonably be read to allow the four different methods spelled out, merely parroting the statutory language cannot possibly inform employees of the method the employer has chosen. By paraphrasing the statutory language, in other words, America West has done no more than announce its intention to comply with the Act. 56 Because choosing a calculating method carries with it an obligation to inform employees of that choice and America West has failed to fulfill this obligation, it hasfail[ed] to select a calculating method. 29 C.F.R. §§ 825.200(e). Thus, the option that provides the most beneficial outcome for the employee must be used to determine whether Bachelder's 1996 absences were covered by the FMLA. Id. 57 The calendar year method provides the most favorable outcome to Bachelder. 29 C.F.R. §§ 825.200(b)(1). Under this approach, it is immaterial that Bachelder had utilized her full allotment of FMLA-protected leave between April and June 1995 (and it is unnecessary for us to resolve the dispute whether she used every single day of FMLA leave to which she was entitled in 1995). Because she began 1996 with a fresh bank of FMLA-protected leave, Bachelder's February 1996 absences were covered by the Act. 18