Chevron Strikes Again: Second Circuit Holds FMLA Retaliation Plaintiffs Need Only Show Exercise of Rights was Motivating Factor, Not But For Cause

The Family Medical Leave Act provides job protection for workers who need time off for a serious health condition or to care for family members who are suffering from a qualifying condition.  Because of its broad protections, the FMLA has also engendered a substantial amount of litigation.  The claims can take two different shapes: FMLA interference, where a plaintiff alleges that the employer interfered with the exercise of rights under the Act, or FMLA retaliation claims, where the plaintiff claims that the employer took some adverse employment action—that is, termination, suspension, reduction in hours, wages, or benefits, etc.—because of the exercise of FMLA rights.

In Woods v. START Treatment & Recovery Ctrs., it was a FMLA retaliation claim.  The plaintiff, a substance abuse counselor at a non-profit, alleged that START put her on probation and then terminated her because she took FMLA leave while hospitalized with anemia, and actually told her that she couldn’t take FMLA leave to deal with her condition because she was on probation.  START told a different story, of course. It said the plaintiff for years failed to complete the patient notes that were required to qualify for reimbursement from Medicaid.  She was counseled, warned, given extra training, and even put on probation, but she still only finished between 25 to 30% of her patient notes.  All other employees completed 90 to 95%.

After the plaintiff was eventually terminated, she sued claiming that she was retaliated against for exercising her FMLA rights.  At trial, the parties fought about the standard for causation that would be charged to the jury, the plaintiff arguing for a motivating factor analysis and START claiming that but for causation applied.  The District Court adopted START’s formulation and told the jury that in order to succeed on her FMLA retaliation claim, the plaintiff had to show that her exercise of FMLA rights was the but for cause of her termination, that is, that absent her FMLA leave, she would not have been fired.  The jury rendered a verdict for START, and the plaintiff appealed.

The Second Circuit on appeal addressed two unsettled FMLA questions in the Circuit: (1) under what provision of the FMLA do retaliation claims arise, and (2) what kind of causation is required to succeed on a FMLA retaliation claim.  As to the first question, the Court pointed out that although the Circuits are split on the statutory authority for FMLA retaliation claims, two main provisions are generally asserted.

Analyzing the statutory langauge, the Court held that FMLA retaliation claims flow from 29 USC § 2615(a)(1)’s prohibition on interfering with or restraining the exercise of FMLA rights, as the First Circuit has held.

Next, the Court turned to causation, particularly, what causal connection must the plaintiff show between her exercise of FMLA rights and the adverse employment action in order to succeed on her FMLA retaliation claim?  Turning again to the statute, the Court noted that the language of the FMLA’s protections does not provide any standard of causation.  In the absence of any statutory command, the Court analyzed whether Chevron deference was appropriate to a USDOL regulation that provides that employers can’t use the exercise of FMLA rights as a “negative factor” in employment decisions.

Because the FMLA is absolutely silent as to causation, and the USDOL interpretation of the standard for causation was reasonable, the Second Circuit deferred to the USDOL’s interpretation and held that a plaintiff alleging a FMLA retaliation claim need only establish that the exercise of FMLA rights was a motivating factor in the adverse employment action, not the but for cause of it.

This causation decision is a monumental shift in favor of FMLA plaintiffs, and presents an interesting case for Supreme Court review. Indeed, we have a Circuit conflict over which provision of the FMLA gives rise to retaliation claims and a Chevron deferral to an agency gap-filling regulation where the statute is silent on causation, causing a potential conflict with the Supreme Court’s default holding that but for causation applies absent express Congressional intent to negate that standard.  Come on, Justice Gorsuch, this is your chance to make your mark on Chevron deference once and for all.

The Second Circuit’s opinion can be found here.