Court Opinion

ID: 2971289
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:32:25.443762+00
Date Added: 2024-06-11T11:43:35.036635
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                Pursuant to Sixth Circuit Rule 206                       2    Ricco v. Potter, et al.                      No. 03-3294
        ELECTRONIC CITATION: 2004 FED App. 0242P (6th Cir.)
                    File Name: 04a0242p.06                                                   _________________
                                                                                                  COUNSEL
UNITED STATES COURT OF APPEALS
                                                                         ARGUED:         Jonathan T. Hyman, REMINGER &
                  FOR THE SIXTH CIRCUIT                                  REMINGER CO., Cleveland, Ohio, for Appellant. Annette
                    _________________                                    G. Butler, ASSISTANT UNITED STATES ATTORNEY,
                                                                         Cleveland, Ohio, for Appellees. ON BRIEF: Jonathan T.
 DOREEN RICCO,                    X                                      Hyman, Richard C. Haber, REMINGER & REMINGER CO.,
          Plaintiff-Appellant,     -                                     Cleveland, Ohio, for Appellant. Annette G. Butler,
                                   -                                     ASSISTANT UNITED STATES ATTORNEY, Cleveland,
                                   -  No. 03-3294                        Ohio, for Appellees.
            v.                     -
                                    >                                       MOORE, J., delivered the opinion of the court, in which
                                   ,                                     DUGGAN, D. J., joined. MERRITT, J. (pp. 14-15), delivered
 JOHN E. POTTER , Postmaster       -
 General, et al.,                                                        a separate concurring opinion.
                                   -
        Defendants-Appellees. -                                                              _________________
                                   -
                                  N                                                              OPINION
      Appeal from the United States District Court                                           _________________
     for the Northern District of Ohio at Cleveland.
    No. 02-00496—Donald C. Nugent, District Judge.                          KAREN NELSON MOORE, Circuit Judge. This appeal
                                                                         from the dismissal of a claim under the Family and Medical
                     Argued: April 23, 2004                              Leave Act of 1993 (“FMLA”) raises an important issue of
                                                                         statutory construction. Specifically, this appeal requires us to
               Decided and Filed: July 27, 2004                          interpret the phrase “hours of service” as it is used in the
                                                                         FMLA. We hold that make-whole relief awarded to an
        Before: MERRITT and MOORE, Circuit Judges;                       unlawfully terminated employee may include credit towards
                 DUGGAN, District Judge.*                                the hours-of-service requirement contained in the FMLA’s
                                                                         definition of “eligible employee.”
                                                                           Plaintiff-Appellant, Doreen Ricco (“Ricco”), appeals the
                                                                         district court’s dismissal under Federal Rule of Civil
                                                                         Procedure 12(b)(6) of her claim pursuant to the FMLA
                                                                         against her former employer, Defendant-Appellee, John E.
                                                                         Potter, Postmaster General (“Postmaster”). On appeal, Ricco
                                                                         argues that the district court erred by adopting the reasoning
    *
     The Honorable Patrick J. Duggan, United States District Judge for   of Plumley v. Southern Container, Inc., 303 F.3d 364, 367
the Eastern District of Michigan, sitting by designation.

                                  1
No. 03-3294                              Ricco v. Potter, et al.         3    4       Ricco v. Potter, et al.                          No. 03-3294

(1st Cir. 2002), in which the First Circuit held that the hours-              full credit for years of service for seniority and pension
of-service requirement contained in the FMLA’s definition of                  purposes.” J.A. at 26-27 (Am. Compl. ¶ 10).
“eligible employee” includes only hours during which an
employee performed actual work, not hours for which an                          After Ricco returned to work, from May through July 1999,
employee was compensated pursuant to an arbitration award.                    she suffered from depression and migraines after the death of
Ricco further argues on appeal that the district court did not                her husband, and consequently she required intermittent
adequately balance the competing interests of employers and                   leaves of absence. Due to this serious health condition, Ricco
employees and created an incentive for employers unlawfully                   requested FMLA leave in early May 1999. According to
to terminate employees to prevent employees from satisfying                   Ricco, the Postal Service denied her request for FMLA leave
the hours-of-service requirement.                                             because it concluded that she had not met the hours-of-service
                                                                              requirement.2 Ricco alleges that she “had not ‘worked’ 1250
  For the following reasons, we REVERSE the district                          hours in the preceding 12 months solely because she had been
court’s judgment granting the Postmaster’s motion to dismiss                  unlawfully terminated in December 1997 and in violation of
under Rule 12(b)(6) and REMAND this case for further                          the Collective Bargaining Agreement.”3 J.A. at 27 (Am.
proceedings consistent with this opinion.                                     Compl. ¶ 15). Ricco further alleges that the Postal Service
                                                                              has previously recognized “that ‘[w]hen an[] employee is
                        I. BACKGROUND                                         awarded back pay, accompanied by equitable remedies (i.e.
                                                                              full back pay with seniority and benefits, or a ‘make whole’
A. Factual Background                                                         remedy), the hours the employee would have worked if not
                                                                              for the action which resulted in the back pay period, are
   In July 1993, the United States Postal Service (“Postal                    counted as work hours for the 1250 work hour eligibility
Service”) hired Ricco to work at its general mail facility in                 requirement under the Family Medical Leave Act (FMLA).’”
Cleveland, Ohio.1 In December 1997, the Postal Service                        J.A. at 29 (Am. Compl. ¶ 27).
issued Ricco “a notice of removal, effectively terminating her
employment.” Joint Appendix (“J.A.”) at 26 (Am. Compl.                          On October 15, 1999, the Postal Service issued Ricco
¶ 7). Ricco timely grieved her December 1997 termination                      another notice of removal “due to a failure to maintain a
and ultimately proceeded to an arbitration hearing on January                 regular work schedule.” J.A. at 27 (Am. Compl. ¶ 14). Ricco
19, 1999. In a February 8, 1999 award, the arbitrator ordered
that Ricco’s termination be converted to a thirty-work-day
suspension and that Ricco “be reinstated subject to passing a
                                                                                  2
fitness-for-duty examination and be made whole.” J.A. at 26                          To be an “eligible employee” under the Family and Med ical Leave
(Am. Compl. ¶¶ 9, 10). Subsequently, Ricco “passed the                        Act of 1993 (“FMLA”) an employee must have worked for her employer
fitness-for[-]duty examination and was returned to work with                  for at least twelve months and must have completed “at least 1,250 hours
                                                                              of service with such employer during the pervious 12-month period.” 29
                                                                              U.S.C. § 261 1(2)(A).

                                                                                  3
                                                                                    In her amended complaint, Ricco avers that her December 1997
    1
                                                                              termination was “unlawful.” B ecause this is an appe al from the district
      Because this is an appeal from the district court’s judgment granting   court’s judgment granting the Postmaster’s motion to dismiss under Rule
the Postmaster’s motion to dismiss under Rule 12(b)(6), we recite the         12(b)(6), we must assume that the arbitrator did, in fact, determine that
facts as they are rec ounted in Ricco’s amended com plaint.                   Ricco’s Decem ber 1 997 termina tion was unlawful.
No. 03-3294                        Ricco v. Potter, et al.    5    6      Ricco v. Potter, et al.                       No. 03-3294

timely grieved her October 1999 termination and proceeded          444, 451 (6th Cir. 2003). “In deciding whether to grant a
to another arbitration hearing. In a November 19, 2001             Rule 12(b)(6) motion, we ‘must construe the complaint in the
award, the arbitrator affirmed Ricco’s dismissal “on the basis     light most favorable to the plaintiff, accept all factual
that [Ricco] was absent from work [and further] stated that        allegations [of the plaintiff] as true, and determine whether
‘this is not the proper forum to litigate any alleged violations   the plaintiff undoubtedly can prove no set of facts in support
of the FMLA’ and therefore refused to consider whether the         of his claims that would entitle him to relief.’” Id. at 451-52
FMLA had been violated.” J.A. at 28 (Am. Compl. ¶ 19).             (quoting Allard v. Weitzman (In re DeLorean Motor Co.), 991
Thereafter, Ricco commenced this action in federal court.          F.2d 1236, 1240 (6th Cir. 1993)). Moreover, a Rule 12(b)(6)
                                                                   “motion should not be granted ‘unless it appears beyond
B. Procedural Background and Jurisdiction                          doubt that the plaintiff can prove no set of facts in support of
                                                                   his claim which would entitle him to relief.’” Id. at 425
   On March 14, 2002, Ricco filed a two-count complaint in         (quoting Cameron v. Seitz, 38 F.3d 264, 270 (6th Cir. 1994)
the district court alleging that the Postmaster terminated her     (quotation omitted)). The Postmaster points out that he
in violation of the FMLA and Ohio public policy. On                timely raised in his answer as an affirmative defense the
September 6, 2002, Ricco filed a motion to dismiss Count II        expiration of the FMLA’s two-year statute of limitations, but
of her complaint, which asserted a claim based upon Ohio           that the district court did not rule upon this issue in its
public policy, because that claim had been foreclosed by Ohio      opinion. The FMLA provides:
Supreme Court precedent. At a status conference on October
2, 2002, the Postmaster raised the potential applicability of          (1) In general
the Plumley decision, and the parties agreed that Ricco would
file an amended complaint supplementing her factual                    Except as provided in paragraph (2), an action may be
allegations and that the Postmaster would then file a motion           brought under this section not later than 2 years after the
to dismiss. Ricco filed her first amended complaint on                 date of the last event constituting the alleged violation for
October 17, 2002, and thereafter the Postmaster filed his              which the action is brought.
motion to dismiss on October 21, 2002. The district court
granted the Postmaster’s motion to dismiss on February 7,              (2) Willful violation
2003. Ricco filed a timely notice of appeal.
                                                                       In the case of such action brought for a willful violation
  The district court had jurisdiction pursuant to 28 U.S.C.            of section 2615 of this title, such action may be brought
§ 1331, as Ricco’s FMLA claim presented a federal question.            within 3 years of the date of the last event constituting
This court has jurisdiction over the appeal pursuant to                the alleged violation for which such action is brought.
28 U.S.C. § 1291.
                                                                   29 U.S.C. § 2617(c). The Postal Service terminated Ricco,
                       II. ANALYSIS                                allegedly in violation of the FMLA, on October 15, 1999, and
                                                                   Ricco filed her complaint approximately two and one-half
A. Standard of Review and Statute of Limitations                   years later. Therefore, Ricco’s FMLA claim is time-barred
                                                                   unless she proves that the Postmaster’s violation was willful.
  We review de novo a district court’s dismissal under Rule
12(b)(6). Marks v. Newcourt Credit Group, Inc., 342 F.3d
No. 03-3294                        Ricco v. Potter, et al.    7    8     Ricco v. Potter, et al.                   No. 03-3294

   Ricco, in both her initial complaint and her first amended      interpretation of the hours-of-service requirement adopted in
complaint, averred that the Postmaster and the Postal Service      Plumley. Ricco argues that the FLSA merely defines “regular
acted negligently, willfully, and maliciously when they            rate,” and that although the definition of “regular rate”
violated her rights under the FMLA. An employer commits            excludes payment for occasional periods where no work is
a willful violation of the FMLA when it acts with knowledge        performed due to certain causes, unlawful termination should
that its conduct is prohibited by the FMLA or with reckless        not be so excluded. Because the FMLA and FLSA do not
disregard of the FMLA’s requirements; therefore, the               define the term “hours of service,” Ricco urges this court to
determination of willfulness involves a factual question. See      define the term to include those hours that an employee is
Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 125-         deemed to have worked pursuant to a make-whole award
130 (1985) (defining the standard for a willful violation of the   issued by an arbitrator in order to effectuate the FMLA’s
Age Discrimination in Employment Act); Hillstrom v. Best           purpose of “balanc[ing] the demands of the workplace with
Western TLC Hotel, 354 F.3d 27, 33 (1st Cir. 2003); see also       the needs of the family,” and to discourage employers from
Williams v. Schuller Int’l, Inc., No. 00-3614, 2002 WL             unlawfully terminating employees to prevent them from
193929, at *3 (6th Cir. Feb. 5, 2002) (applying Thurston’s         meeting the hours-of-service requirement. Appellant’s Br. at
standard of willfulness to claims brought under the FMLA).         17.
Because a plaintiff’s factual allegations must be taken as true
for purposes of deciding a Rule 12(b)(6) motion to dismiss,          In response, the Postmaster argues that together the FMLA
a plaintiff may withstand such a motion merely by having           and the FLSA adequately define the term “hours of service.”
alleged that the FMLA violation was willful. See Caucci v.         The Postmaster asserts that the legislative history of the
Prison Health Servs., Inc., 153 F. Supp. 2d 605, 608-09 (E.D.      FMLA, the pertinent provisions of the FLSA, and Supreme
Pa. 2001).                                                         Court precedent interpreting the FLSA all indicate that the
                                                                   hours-of-service requirement does not include time for which
B. Statutory Interpretation                                        an employee was paid but did not work or time spent on
                                                                   unpaid leave. The Postmaster further asserts that interpreting
  On appeal, Ricco contends that the district court erred by       the term “hours of service” to include those hours that an
adopting the reasoning in Plumley, arguing that the First          employee is deemed to have worked pursuant to a make-
Circuit erroneously concluded that the hours-of-service            whole award issued by an arbitrator would undermine the
requirement contained in the FMLA’s definition of “eligible        FMLA’s purpose of allowing “employees to take reasonable
employee” means only hours that an employee performed              leave . . . in a manner that accommodates the legitimate
actual work, not hours for which an employee was                   interests of the employer.” Appellee’s Br. at 12.
compensated pursuant to an arbitration award. In Plumley,
the First Circuit looked, as directed by the FMLA, to the Fair       The FMLA entitles eligible employees to twelve weeks of
Labor Standards Act of 1938 (“FLSA”) for guidance                  unpaid leave during any twelve-month period for certain
regarding the proper interpretation of the hours-of-service        statutorily prescribed reasons. 29 U.S.C. § 2612(a)(1). The
requirement. Plumley, 303 F.3d at 369-72.                          FMLA defines the term “eligible employee” as:
  Ricco points out, however, that neither the FMLA nor the             an employee who has been employed —
FLSA define the term “hours of service” and argues that
neither the FLSA nor its applicable regulations support the
No. 03-3294                             Ricco v. Potter, et al.        9    10      Ricco v. Potter, et al.                    No. 03-3294

  (i) for at least 12 months by the employer with respect to                         traveling expenses, or other expenses, incurred by an
  whom leave is requested under section 2612 of this title;                          employee in the furtherance of his employer’s
  and                                                                                interests and properly reimbursable by the employer;
                                                                                     and other similar payments to an employee which
  (ii) for at least 1,250 hours of service with such employer                        are not made as compensation for his hours of
  during the previous 12-month period.                                               employment[.]
29 U.S.C. § 2611(2)(A).4 The FMLA does not define the                       29 U.S.C. § 207(e) (emphases added).            The applicable
term “hours of service”; however, it does specify: “For                     regulations explain:
purposes of determining whether an employee meets the
hours of service requirement specified in subparagraph                        This provision of section 7(e)(2) deals with the type of
(A)(ii), the legal standards established under section 207 of                 absences which are infrequent or sporadic or
this title shall apply.” Id. at (2)(C). The applicable                        unpredictable. It has no relation to regular “absences”
regulations explain, “The determining factor is the number of                 such as lunch periods nor to regularly scheduled days of
hours an employee has worked for the employer within the                      rest. . . .
meaning of the FLSA.” 29 C.F.R. § 825.110.
                                                                              ...
   Section 7 of the FLSA does not define the term “hours of
service,” but it does provide in its definition of “regular rate”                . . . The term “other similar cause” refers to payments
standards for determining the rate at which employees must                    made for periods of absence due to factors like holidays,
be compensated for engaging in overtime work.5 FLSA, ch.                      vacations, sickness, and failure of the employer to
676, § 52 Stat 1060 (1938) (codified as 29 U.S.C. § 207)                      provide work. Examples of “similar causes” are
(“§ 207”). The FLSA specifies that an employee’s “regular                     absences due to jury service, reporting to a draft board,
rate” of compensation does not include, among other things,                   attending a funeral of a family member, inability to reach
                                                                              the workplace because of weather conditions. Only
  (2) payments made for occasional periods when no                            absences of a nonroutine character which are infrequent
      work is performed due to vacation, holiday, illness,                    or sporadic or unpredictable are included in the “other
      failure of the employer to provide sufficient work,                     similar cause” category.
      or other similar cause; reasonable payments for
                                                                            29 C.F.R. § 778.218(b), (d).

    4
                                                                              In Plumley, the First Circuit concluded that these statutes
      The determinatio n of whether an emp loyee m eets the F MLA’s         and regulations indicate that the hours-of-service requirement
eligibility requirements is made in reference to the date the employee      includes only hours that the employee actually worked, not
commences his or her leave, not the day the employer takes an adverse
action against the employee. Butler v. Ow ens-B rockway Pla stic Pro ds.,
                                                                            hours for which an employee was compensated pursuant to an
Inc., 199 F.3d 31 4, 316 (6th Cir. 1999).                                   arbitration award. 303 F.3d at 370-73. No other circuit has
                                                                            addressed this issue.
    5
     Under the FLSA, an employee must be compensated for overtime
work at a rate “not less than one and one-half times the regular rate at
which he is employed.” 29 U.S.C. § 207(a)(1).
No. 03-3294                       Ricco v. Potter, et al.   11    12   Ricco v. Potter, et al.                    No. 03-3294

   It is true that neither the FMLA nor the FLSA defines the      have worked but for her unlawful prior termination by her
term “hours of service,” but the FMLA specifies that an           employer.
employee’s “hours of service” are to be calculated according
to the standards contained in § 207. Examination of § 207            We note that back-pay awards often include payment for
leads to the conclusion that the only plausibly applicable        overtime work that an employee would have performed but
standards are those contained in the definition of the term       for her employer’s violation of employment laws. See, e.g.,
“regular rate.” In response to public comment, the                United States v. City of Warren, 138 F.3d 1083, 1097 (6th
Department of Labor stated that the legislative history of the    Cir. 1998) (upholding an award of lost overtime granted to
FMLA indicates that “the minimum hours of service                 prevailing plaintiffs in a Title VII case); EEOC v. Ky. State
requirement is meant to be construed in a manner consistent       Police Dep’t, 80 F.3d 1086, 1100 (6th Cir.) (upholding an
with the legal principles established for determining hours of    award of lost overtime payments granted to prevailing
work for payment of overtime compensation.” Summary of            plaintiffs in an Age Discrimination in Employment Act case),
Comments, 60 Fed. Reg. 2186 (January 6, 1995). It is also         cert. denied, 519 U.S. 963 (1996). Such back-pay awards
true, however, that § 207 limits additional unenumerated          involve two calculations — (1) determining the number of
exclusions from the determination of an employee’s “regular       overtime hours the employee likely would have worked but
rate” to “other similar causes,” and that time that an employee   for her unlawful termination; and (2) determining the
does not work due to vacation or illness is conceptually          employee’s likely rate of overtime pay. While the
dissimilar from time that an employee does not work due to        calculations contained in § 207 are necessary to determine the
unlawful termination.                                             employee’s likely rate of overtime pay, they have nothing to
                                                                  do with the determination of how many hours the employee
   We conclude that time that an employee would have              likely would have worked but for her unlawful termination.
worked but for her unlawful termination is not an “other          When calculating a back-pay award, the determination of how
similar cause” within the meaning of § 207. Such hours are        many hours the employee likely would have worked but for
different from occasional hours of absence due to vacation,       her unlawful termination is typically based upon the
holiday, illness, and the employer’s failure to provide work,     employee’s work history. Similarly, when calculating the
etc., in that they are hours that the employee wanted to work     credit towards the hours-of-service requirement due as part of
but was unlawfully prevented by the employer from working.        a make-whole award, the determination of how many hours
Section 207 does not clearly prevent such hours from              the employee likely would have worked but for her unlawful
counting, and the purpose of the FMLA’s hours-of-service          termination should also be based upon her employment
requirement is properly served by including these hours. In       history.
such cases, the employer’s unlawful conduct has prevented
the employee from satisfying the hours-of-service                   The goal of a make-whole award is to put the employee in
requirement. Moreover, denying employees credit towards           the same position that she would have been in had her
the hours-of-service requirement for hours that they would        employer not engaged in the unlawful conduct; this includes
have worked, but for their unlawful termination, rewards          giving the employee credit towards the FMLA’s hours-of-
employers for their unlawful conduct. We conclude that            service requirement for hours that the employee would have
neither the FMLA nor the FLSA addresses directly the              worked but for her unlawful termination. The district court
situation in this case involving hours that an employee would     must determine in the first instance the number of hours that
                                                                  Ricco would have worked but for her unlawful termination in
No. 03-3294                     Ricco v. Potter, et al.   13   14   Ricco v. Potter, et al.                      No. 03-3294

order to ascertain Ricco’s eligibility under the hours-of-                       ____________________
service requirement for FMLA leave.
                                                                                   CONCURRENCE
                  III. CONCLUSION                                                ____________________
  For the foregoing reasons, we REVERSE the district              MERRITT, Circuit Judge, concurring. The defendant-
court’s order granting the Postmaster’s motion to dismiss      employer in this case discharged plaintiff wrongfully,
pursuant to Rule 12(b)(6) and REMAND this case for further     preventing her continued work, according to a now-final,
proceedings consistent with this opinion.                      arbitration award, and thereby prevented her from qualifying
                                                               for benefits under the Family Medical Leave Act. I concur in
                                                               the Court’s opinion and simply add the idea that a contrary
                                                               decision would contravene fundamental general principles of
                                                               restitution and equitable remedies of long standing by
                                                               allowing the employer to profit from its own infringement of
                                                               the plaintiff’s right to the statutory benefits derived from her
                                                               own labor.
                                                                 The remedies provided by the Family Medical Leave Act
                                                               and the Fair Labor Standard Act are make-whole, equitable
                                                               remedies, as the Court’s opinion suggests. The Restatement
                                                               of Restitution in its introductory note sets out the underlying
                                                               principle:
                                                                   The principles expressed in this Chapter represent not
                                                                 only a large body of contemporary, “positive’ law but
                                                                 also a view of justice traceable to Roman law and
                                                                 beyond. The central idea is the conjunction of unjust
                                                                 enrichment on the one side and loss of grievance on the
                                                                 other. Rules of liability in restitution depend in part on
                                                                 the wrongful acquisition of gain and in part on harm or
                                                                 loss wrongfully imposed. In some cases the fact that a
                                                                 person has acquired a gain by wrongdoing is the
                                                                 principal reason for requiring him to make restitution.
No. 03-3294                        Ricco v. Potter, et al.    15

  The first section of the Restatement then provides:
  § 1. The General Principle: Unjust Enrichment
    A person who receives a benefit by reason of an
  infringement of another person’s interest, or of loss
  suffered by the other, owes restitution to him in the manner
  and amount necessary to prevent unjust enrichment.
American Law Institute, Restatement of the Law 2d, Tent.
Draft 1, pp. 7-8 (April 5, 1983). See also Lightly v. Qouston,
127 Eng. Rep. 774 (C.P. 1808) in which Lord Mansfield
applied the restitution concept to the appropriation of the right
of an employee of his labor, upholding an action in the form
of assumpsit for work and labor wrongly prevented by the
defendant. See Palmer, Law of Restitution § 2.1, n. 5 (1978),
discussing the Lightly case in a modern context. This same
fundamental principle of restitution should be applied in this
case where the employer wrongfully prevented the labor of
the employee thereby through its action denying the employee
the benefit of family medical leave. To leave the status quo
in place would unjustly enrich the employer at the expense of
the employee.