Why the ‘Honest Belief’ Defense in FMLA Cases Is Actually Working

Employers who use best practices in investigating FMLA violations tend to do better in court.
By: | August 11, 2020

Imagine seeing a photo of your employee skiing when they said had to take off work because of a bad back. Or perhaps viewing a social media picture of them running a marathon when they claimed to have a broken foot.

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So busted, you may think. But stop before you rush to judgment about a suspected abuse of the Family and Medical Leave Act (FMLA) and gather the facts.

The adage “honesty is the best policy” holds true both for employees who take FMLA leave, and for employers who use the honest belief defense to defend the termination of employees whom they believe have misused FMLA. The honest belief defense is gaining traction in courts, which have found that an employer cannot be found liable in an FMLA claim if they can show the reason for letting an employee go was based on an honest belief the employee was misusing FMLA leave — even if that belief was incorrect.

“It’s helpful to employers who’ve asserted it in court and who have had very good results with it,” said Gary Wheeler, a partner in the Jacksonville office of Constangy Brooks, Smith & Prophete LLP. “A lot of defenses come from regulations. This defense is a little unique in that it has been a judicially created defense, which means it’s been created by judges through case law.”

“I find that in cases where an employer conducted a full and complete investigation (of the alleged FLMA abuse) the employers tend to win before it goes to trial,” said Jeff Nowak, a shareholder with the employment and labor law firm Littler Mendelson P.C.

“In cases where there was a rush to judgment, the employees tend to win.”

Honest Belief in Action

Wheeler analyzed 35 federal, honest-belief defense cases that occurred prior to 2015 and found that the defense was successful for employers in 32 of the cases. “In the cases I read through the employees showed some pretty substantial moxie to take time off,” he said.

All but one of the successful cases were decided in the employer’s favor at the summary judgment phase, which occurs just before a case goes to trial. “That’s when an employer makes a motion for summary judgment and a judge decides that even if the facts were taken most favorably for the plaintiff, the employer would prevail,” Wheeler said.

In 25% of the cases he studied, Wheeler found that the employee who’d been accused of misusing FMLA had been reported by a co-worker. Beyond another person’s accusation, social media is frequently cited as the reason a co-worker approaches an employer with a complaint that another employee is misusing FMLA.

“Social media is the employer’s best tool when it comes to honest belief defense. That’s a reasonable basis to investigate an employee. However, the employer actually needs to perform some kind of investigation,” said Stacey Widlansky, vice president, North American Claims, Allied World Insurance Company.

“A lot of defenses come from regulations. This defense is a little unique in that it has been a judicially created defense, which means it’s been created by judges through case law.” — Gary Wheeler, partner, Constangy Brooks, Smith & Prophete LLP

Widlansky recommends seeking the advice of an employment attorney before conducting an investigation and during any meeting at which an employee may be terminated for misusing FMLA. That recommendation is echoed by Nowak, who notes that laws regarding such issues as whether an employer can view an employee’s social media pages vary by state. In Illinois, for instance, viewing an employee’s social media platforms is outlawed unless permission is expressed by the employee.

Investigations Must Follow the Law

An employer may do an investigation on their own which could include interviewing the person who made the report, talking to other co-workers and following up on other leads. But they need to be careful about pursuing it too far and violating an employee’s privacy.

“You can surveille someone in a public place, but you can’t stick a camera in their bedroom,” Walker said.

If an employer uses a third party investigator to investigate an employee, Walker advises they should hire someone who is licensed and reputable.

While seeing a photo on social media of an employee dancing on a cruise ship when they supposedly have a broken leg may seem like convincing evidence, it’s better for the employer to have other supporting documentation.

“The more documentation you have in your file, the better,” Widlansky said. “If they don’t give the employee a chance to explain, the court isn’t very friendly to that.”

Stopping FMLA Abuse

Of course, stopping FMLA abuse before it occurs is a step that is beneficial to both employers and to employees, particularly those who may be shouldering extra duties when their co-worker isn’t at work because they are misusing FMLA.

Gary Wheeler, partner, Constangy Brooks, Smith & Prophete LLP

“I find that employers often aren’t doing enough up front to set up a successful leave process for both them and their employees,” Nowak said.

“As the employer you have to right to know why your employee can’t come to work,” Nowak added. He also advises meeting with the person seeking leave in-person before granting it and asking these questions: What is the reason for the absence? What essential functions of the job can they not perform? Will the employee see a health care provider for the injury/illness? Have they previously taken leave for this condition? If so, when? When do they expect to return to work?

Employers should also require medical certification and to re-certify it when needed. An employer might want to re-certify if they notice a pattern of an employee taking off work on Mondays and Fridays in the summer or claiming an injured back when they receive a job assignment they don’t like.

Asking the employer’s doctor to re-certify the employee’s medical condition may result in getting a rubber stamp letter back from the doctor affirming the condition, but Nowak said he’s also seen such a communication lead to a doctor getting real with the employee. An employer needs to have the employee’s approval to contact their health care provider, but that also may lead to an employee revising their behavior.

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“If an employee has a sense that you’re on to them they will increasingly curb their behavior,” Nowak said.

If the medical certification or re-certification is incomplete, employers should immediately contact employees to cure the deficiencies or explain any suspect information in the form.

Nowak also recommends discussing your expectations of the employee during leave, particularly if they are taking intermittent leave.

Managers should ensure that employees understand the call-in requirements such as when and who to call, certification and check-in obligations and those points should be summarized in a document that is provided to employees and signed by them.

“This document will be helpful down the road if you need to defend your actions, as it will establish that the employee was well aware of your expectations in taking FMLA leave,” Nowak said.

Another tip is to ask employees to complete a personal certification to confirm that they took off for the reason they’d stated. If the leave doesn’t mesh with their stated reason, the employer can discipline them for employment record falsification. &

Annemarie Mannion is a freelance writer. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The Betrayal of Elizabeth

In this Risk Scenario, Risk & Insurance explores what might happen in the event a telemedicine or similar home health visit violates a patient's privacy. What consequences await when a young girl's tele visit goes viral?
By: | October 12, 2020
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

PART ONE: CRACKS IN THE FOUNDATION

Elizabeth Cunningham seemingly had it all. The daughter of two well-established professionals — her father was a personal injury attorney, her mother, also an attorney, had her own estate planning practice — she grew up in a house in Maryland horse country with lots of love and the financial security that can iron out at least some of life’s problems.

Tall, good-looking and talented, Elizabeth was moving through her junior year at the University of Pennsylvania in seemingly good order; check that, very good order, by all appearances.

Her pre-med grades were outstanding. Despite the heavy load of her course work, she’d even managed to place in the Penn Relays in the mile, in the spring of her sophomore season, in May of 2019.

But the winter of 2019/2020 brought challenges, challenges that festered below the surface, known only to her and a couple of close friends.

First came betrayal at the hands of her boyfriend, Tom, right around Thanksgiving. She saw a message pop up on his phone from Rebecca, a young woman she thought was their friend. As it turned out, Rebecca and Tom had been intimate together, and both seemed game to do it again.

Reeling, her holiday mood shattered and her relationship with Tom fractured, Elizabeth was beset by deep feelings of anxiety. As the winter gray became more dense and forbidding, the anxiety grew.

Fed up, she broke up with Tom just after Christmas. What looked like a promising start to 2020 now didn’t feel as joyous.

Right around the end of the year, she plucked a copy of her father’s New York Times from the table in his study. A budding physician, her eyes were drawn to a piece about an outbreak of a highly contagious virus in Wuhan, China.

“Sounds dreadful,” she said to herself.

Within three months, anxiety gnawed at Elizabeth daily as she sat cloistered in her family’s house in Bel Air, Maryland.

It didn’t help matters that her brother, Billy, a high school senior and a constant thorn in her side, was cloistered with her.

She felt like she was suffocating.

One night in early May, feeling shutdown and unable to bring herself to tell her parents about her true condition, Elizabeth reached out to her family physician for help.

Dr. Johnson had been Elizabeth’s doctor for a number of years and, being from a small town, Elizabeth had grown up and gone to school with Dr. Johnson’s son Evan. In fact, back in high school, Evan had asked Elizabeth out once. Not interested, Elizabeth had declined Evan’s advances and did not give this a second thought.

Dr. Johnson’s practice had recently been acquired by a Virginia-based hospital system, Medwell, so when Elizabeth called the office, she was first patched through to Medwell’s receptionist/scheduling service. Within 30 minutes, an online Telehealth consult had been arranged for her to speak directly with Dr. Johnson.

Due to the pandemic, Dr. Johnson called from the office in her home. The doctor was kind. She was practiced.

“So can you tell me what’s going on?” she said.

Elizabeth took a deep breath. She tried to fight what was happening. But she could not. Tears started streaming down her face.

“It’s just… It’s just…” she managed to stammer.

The doctor waited patiently. “It’s okay,” she said. “Just take your time.”

Elizabeth took a deep breath. “It’s like I can’t manage my own mind anymore. It’s nonstop. It won’t turn off…”

More tears streamed down her face.

Patiently, with compassion, the doctor walked Elizabeth through what she might be experiencing. The doctor recommended a follow-up with Medwell’s psychology department.

“Okay,” Elizabeth said, some semblance of relief passing through her.

Unbeknownst to Dr. Johnson, her office door had not been completely closed. During the telehealth call, Evan stopped by his mother’s office to ask her a question. Before knocking he overheard Elizabeth talking and decided to listen in.

PART TWO: BETRAYAL

As Elizabeth was finding the courage to open up to Dr. Johnson about her psychological condition, Evan was recording her with his smartphone through a crack in the doorway.

Spurred by who knows what — his attraction to her, his irritation at being rejected, the idleness of the COVID quarantine — it really didn’t matter. Evan posted his recording of Elizabeth to his Instagram feed.

#CantManageMyMind, #CrazyGirl, #HelpMeDoctorImBeautiful is just some of what followed.

Elizabeth and Evan were both well-liked and very well connected on social media. The posts, shares and reactions that followed Evan’s digital betrayal numbered in the hundreds. Each one of them a knife into the already troubled soul of Elizabeth Cunningham.

By noon of the following day, her well-connected father unleashed the dogs of war.

Rand Davis, the risk manager for the Medwell Health System, a 15-hospital health care company based in Alexandria, Virginia was just finishing lunch when he got a call from the company’s general counsel, Emily Vittorio.

“Yes?” Rand said. He and Emily were accustomed to being quick and blunt with each other. They didn’t have time for much else.

“I just picked up a notice of intent to sue from a personal injury attorney in Bel Air, Maryland. It seems his daughter was in a teleconference with one of our docs. She was experiencing anxiety, the daughter that is. The doctor’s son recorded the call and posted it to social media.”

“Great. Thanks, kid,” Rand said.

“His attorneys want to initiate a discovery dialogue on Monday,” Emily said.

It was Thursday. Rand’s dreams of slipping onto his fishing boat over the weekend evaporated, just like that. He closed his eyes and tilted his face up to the heavens.

Wasn’t it enough that he and the other members of the C-suite fought tooth and nail to keep thousands of people safe and treat them during the COVID-crisis?

He’d watched the explosion in the use of telemedicine with a mixture of awe and alarm. On the one hand, they were saving lives. On the other hand, they were opening themselves to exposures under the Health Insurance Portability and Accountability Act. He just knew it.

He and his colleagues tried to do the right thing. But what they were doing, overwhelmed as they were, was simply not enough.

PART THREE: FALLING DOMINOES

Within the space of two weeks, the torture suffered by Elizabeth Cunningham grew into a class action against Medwell.

In addition to the violation of her privacy, the investigation by Mr. Cunningham’s attorneys revealed the following:

Medwell’s telemedicine component, as needed and well-intended as it was, lacked a viable informed consent protocol.

The consultation with Elizabeth, and as it turned out, hundreds of additional patients in Maryland, Pennsylvania and West Virginia, violated telemedicine regulations in all three states.

Numerous practitioners in the system took part in teleconferences with patients in states in which they were not credentialed to provide that service.

Even if Evan hadn’t cracked open Dr. Johnson’s door and surreptitiously recorded her conversation with Elizabeth, the Medwell telehealth system was found to be insecure — yet another violation of HIPAA.

The amount sought in the class action was $100 million. In an era of social inflation, with jury awards that were once unthinkable becoming commonplace, Medwell was standing squarely in the crosshairs of a liability jury decision that was going to devour entire towers of its insurance program.

Adding another layer of certain pain to the equation was that the case would be heard in Baltimore, a jurisdiction where plaintiffs’ attorneys tended to dance out of courtrooms with millions in their pockets.

That fall, Rand sat with his broker on a call with a specialty insurer, talking about renewals of the group’s general liability, cyber and professional liability programs.

“Yeah, we were kind of hoping to keep the increases on all three at less than 25%,” the broker said breezily.

There was a long silence from the underwriters at the other end of the phone.

“To be honest, we’re borderline about being able to offer you any cover at all,” one of the lead underwriters said.

Rand just sat silently and waited for another shoe to drop.

“Well, what can you do?” the broker said, with hope draining from his voice.

The conversation that followed would propel Rand and his broker on the difficult, next to impossible path of trying to find coverage, with general liability underwriters in full retreat, professional liability underwriters looking for double digit increases and cyber underwriters asking very pointed questions about the health system’s risk management.

Elizabeth, a strong young woman with a good support network, would eventually recover from the damage done to her.

Medwell’s relationships with the insurance markets looked like it almost never would. &

Bar-Lessons-Learned---Partner's-Content-V1b

Risk & Insurance® partnered with Allied World to produce this scenario. Below are Allied World’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

The use of telehealth has exponentially accelerated with the advent of COVID-19. Few health care providers were prepared for this shift. Health care organizations should confirm that Telehealth coverage is included in their Medical Professional, General Liability and Cyber policies, and to what extent. Concerns around Telehealth focus on HIPAA compliance and the internal policies in place to meet the federal and state standards and best practices for privacy and quality care. As states open businesses and the crisis abates, will pre-COVID-19 telehealth policies and regulations once again be enforced?

Risk Management Considerations:

The same ethical and standard of care issues around caring for patients face-to-face in an office apply in telehealth settings:

  • maintain a strong patient-physician relationship;
  • protect patient privacy; and
  • seek the best possible outcome.

Telehealth can create challenges around “informed consent.” It is critical to inform patients of the potential benefits and risks of telehealth (including privacy and security), ensure the use of HIPAA compliant platforms and make sure there is a good level of understanding of the scope of telehealth. Providers must be aware of the regulatory and licensure requirements in the state where the patient is located, as well as those of the state in which they are licensed.

A professional and private environment should be maintained for patient privacy and confidentiality. Best practices must be in place and followed. Medical professionals who engage in telehealth should be fully trained in operating the technology. Patients must also be instructed in its use and provided instructions on what to do if there are technical difficulties.

This case study is for illustrative purposes only and is not intended to be a summary of, and does not in any way vary, the actual coverage available to a policyholder under any insurance policy. Actual coverage for specific claims will be determined by the actual policy language and will be based on the specific facts and circumstances of the claim. Consult your insurance advisors or legal counsel for guidance on your organization’s policies and coverage matters and other issues specific to your organization.

This information is provided as a general overview for agents and brokers. Coverage will be underwritten by an insurance subsidiary of Allied World Assurance Company Holdings, Ltd, a Fairfax company (“Allied World”). Such subsidiaries currently carry an A.M. Best rating of “A” (Excellent), a Moody’s rating of “A3” (Good) and a Standard & Poor’s rating of “A-” (Strong), as applicable. Coverage is offered only through licensed agents and brokers. Actual coverage may vary and is subject to policy language as issued. Coverage may not be available in all jurisdictions. Risk management services are provided or arranged through AWAC Services Company, a member company of Allied World. © 2020 Allied World Assurance Company Holdings, Ltd. All rights reserved.




Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]