Will HR Managers Get Cooked? Second Circuit Says Culinary Institute’s Human Resources Director May Face Individual Liability Under FMLA

Whether a Human Resources Director will be deemed the “employer” and held individually liable for alleged violations under the Family Medical Leave Act (“FMLA”) should be left to the jury, according to the Second Circuit’s recent FMLA decision.  In Graziadio v. Culinary Institute of America, et al., 15-888-cv (2d Cir. Mar. 17, 2016), the Second Circuit found that there could be a viable claim for individual liability under the FMLA and it also announced the standard for what could be considered unlawful “interference” with FMLA rights.

The Plaintiff, Cathleen Graziadio, was a payroll administrator at the Culinary Institute of America (“CIA”).  During a leave of absence after her son had surgery, the CIA’s Director of Human Resources, Shaynan Garrioch, advised that Graziadio’s FMLA paperwork did not justify her absences, that Graziadio must submit updated paperwork to address this deficiency, and refused to allow her to return to work until she provided new documentation.  Graziadio made repeated attempts to determine what additional paperwork was necessary, but Garrioch continued to request unspecified “documentation” and “certifications” before eventually cutting off e-mail communications and insisting on an in-person meeting with Graziadio, which never occurred.  The CIA ultimately terminated Graziadio for abandoning her position.

In determining whether the Human Resources Director could be held individually liable under the FMLA, the Second Circuit followed the Third and Fifth Circuits in determining that the economic-reality test used to analyze whether an individual is an “employer” under the Fair Labor Standards Act should also be applied for identifying “employers” in the FMLA context.  In addressing the key inquiry—whether the alleged employer controlled in whole or in part the plaintiff’s rights under the FMLA—the court examined the following factors:  whether the individual (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.

Applying those factors to the facts, the Second Circuit concluded that summary judgment dismissal of the claim against the Director of Human Resources was improper.  Garrioch “played an important role in the decision to fire Graziadio,” she made a “joint decision” as to termination, exercised control over Graziadio’s schedule and conditions of employment with respect to her return from FMLA leave, reviewed and determined the adequacy of Graziadio’s FMLA paperwork, and was in exclusive communication with Graziadio regarding the FMLA issues.  Under these circumstances, the Second Circuit determined that a jury could find that the Director of Human Resources was an “employer” under the FMLA.

The Second Circuit also formally adopted the test used by district courts within the circuit to analyze FMLA interference claims.  It is now clarified that in the Second Circuit, to prevail on a claim of interference with FMLA rights, a plaintiff must establish: (1) that she is an eligible employee under the FMLA; (2) that the defendant is an employer as defined by the FMLA; (3) that she was entitled to take leave under the FMLA; (4) that she gave notice to the defendant of her intention to take leave; and (5) that she was denied benefits to which she was entitled under the FMLA.

Reversing the district court’s dismissal of Graziadio’s FMLA interference claim, the Second Circuit found that she had raised disputed issues of fact.  The court appeared to be particularly concerned by CIA’s “imprecision in requesting certification, their failure to answer Graziadio’s questions responsively, and their failure to communicate with Graziadio after deeming her doctor’s note deficient.” Such conduct, the court held, “relieved Graziadio of any unsatisfied obligation to provide a medical certification to support her leave.”

Given that Garrioch did not have any apparently unusual or atypical responsibilities for administering FMLA leaves as CIA’s Director of Human Resources, this decision leaves the door open for many human resource managers to be potentially liable for FMLA violations in their individual capacities.  Employers should ensure that their human resources personnel are aware of their potential exposure to liability, are regularly trained on FMLA compliance, and that any challenge to an employee’s paperwork is supported by specific justifications.