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General Rules. At the time this article is published there are 2 laws in Vermont that protect the rights of eligible employees to reinstatement after a period of leave for the serious health condition of the employee: the federal Family and Medical Leave Law and the Vermont Parental and Family Leave Law. There are important differences between the two laws, but in general both statutes provide 12 weeks of leave to an employee who has a “serious illness” or “serious health condition” that incapacitates the employee from working.  If the employee has accrued sick or other leave, he or she may take up to 6 weeks of accrued leave at the employee’s option and take the remaining period of leave without pay. Employees have the right to continue their employer provided health insurance benefits on the same terms and conditions as other employees provided the employee co-pay is satisfied.  Employees are also entitled to reinstatement to their former position or an equivalent position upon return from leave.

Reinstatement Rights Generally Apply to an Employee Who Returns Before Exhausting the 12 Week Leave Entitlement. Generally, a covered employer is required to provide an eligible employee with up to 12 workweeks of leave under the federal Family and Medical Leave Act (“FMLA”).  Once the 12-workweek FMLA allowance has been exhausted, FMLA benefits and protections cease.  That same employee may be entitled to additional unpaid leave under the Americans with Disabilities Act or the “ADA,” and under a similar Vermont law. This could be required as a “reasonable accommodation.” Thus, an employer could discharge an employee who is unable to perform the essential functions of her job 15 weeks after she began leave under FMLA when there appears to be no end date to her incapacity.  If she is able to perform her job after 13 weeks of leave, the combination of FMLA plus the reasonable accommodation requirements of the ADA may require the employer to reinstate the employee.

Tip: Make sure you followed FMLA’s notice and posting requirements carefully before refusing to reinstate an individual who has exhausted his or her 12 week FMLA entitlement.  Include a FMLA policy in your employee handbook, post the U.S. Department of Labor FMLA poster on your employee bulletin board and notify the employee in writing within five business days of learning of the employee’s possible eligibility for FMLA leave or an employee’s request for FMLA leave (no need for employee to say “FMLA” or “Family and Medical Leave Act”) that the absence is designated as FMLA qualifying or preliminarily subject to FMLA leave pending receipt of the necessary medical certification forms from the employee’s health care provider available on www.dol.com.

Addiction is as much of a Serious Health Condition as Heart Disease or Cancer under FMLA Regulations. In general, an employee who is entitled to FMLA rights must have a “serious health condition” resulting in his or her incapacity to work in order to be eligible for FMLA leave. Often times, employers favor one serious health condition over another which is a particularly dangerous practice.  For example, employers tend to favor those with cancer, heart conditions and difficult pregnancies over those employees who are recovering addicts who can be stigmatized because of a past addiction. Substance abuse is a protected serious health condition if the appropriate conditions are met.  However, FMLA leave may only be taken for substance-abuse treatment when given by a health care provider or by a provider of health care services on referral by a health care provider.  Absence because of the employee’s use of the substance, rather than for treatment, does not qualify for FMLA leave. In other words, you can lawfully fire an employee who shows up to work drunk or stoned. It does not matter if the employee is permitted to smoke marijuana under Vermont’s medical marijuana law.  That law still requires employees to refrain from using medical marijuana or being under its influence while at work if the employer so requires.

Employees who are active alcoholics or recovered illegal drug addicts are also protected from discharge or discipline under federal and state civil rights law. However, current illegal drug users or active alcoholics who show up to work ill-equipped to do their jobs may be disciplined or discharged.

An employee is entitled to periodic intermittent leave for absences while enrolled in inpatient or out-patient rehabilitation programs at local hospitals or a detox facility.  Where an employee is terminated based on his absence due to substance abuse and prior to his entry into a substance-abuse program, the employer would not be required to reinstate him and provide FMLA leave.  When employees are absent without advance notice for rehabilitation treatment for substance abuse and the conditions of the FMLA regulations are met, such absences may be counted against an employee’s FMLA leave entitlement from the first date of the absence in most situations. It is important to recognize that under the federal Confidentiality Law applicable to drug and alcohol treatment facilities, an employee may refuse to disclose where he or she may be in detox. He or she must disclose that he or she is in detox in accordance with the employer’s call-in protocols, if feasible.  For example, if an employee is fired for absenteeism while he or she is in the emergency room getting treatment for an overdose, this will probably be a violation of FMLA if the employer does not designate the absence as FMLA leave upon receiving notice of the incapacity at the employee’s earliest possible opportunity or through an employee’s spouse or family member.

Caution. Vermont employers must adopt a drug testing policy that complies with Vermont’s drug testing statute before testing anyone for drug or alcohol use and, in the case of current employees, may only do so with an approved policy and testing only for cause. Ordinarily, however, an employee enrolled in an approved drug and alcohol treatment facility will be subject to drug and alcohol testing as a condition of the facility’s treatment program.

An employee may be discharged immediately under an employer policy if he has never requested FMLA leave for substance-abuse treatment and tests positive for illegal narcotics during a random or “for cause” drug test, or if he voluntarily admits to the employer that he is addicted to drugs.  An employee who tests positive and is granted FMLA leave under terms and conditions of reinstatement that include a weekly testing requirement, and who tests positive a second time, may be terminated under an employer policy that so provides whether or not the employee has used all of his or her allotted FMLA leave.

Employers may require that employees who disclose their personal substance-abuse conditions and obtain rehabilitation treatment to submit to substance abuse testing beyond that required of the general workforce.  Here again, a Vermont employer may not subject its applicants or employees to drug testing without first adopting a policy compliant with Vermont’s drug testing law.

Tip: Adopt and enforce a substance abuse policy requiring the immediate termination of any employee who possesses, sells or uses narcotics in the workplace or who reports for duty under the influence of narcotics or alcohol. This policy is lawful even if the employer does not have a drug testing policy and should be based on a reasonable suspicion standard.

It is important that employers consult with their employment counsel before terminating anyone on FMLA leave.  The interaction between FMLA and the ADA can create complex legal issues that require the advice of counsel to be handled lawfully.

In most cases a worker is eligible for unemployment insurance if the employee is discharged through no fault of their own or if the employee resigns for good cause based on some action or omission of the employer. Benefit amounts are based on the employee’s past earnings. These eligibility standards apply in most states. If an employee has worked outside of Vermont for a period of time but has worked in Vermont for part of the previous eighteen (18) months, the worker is eligible to apply for unemployment benefits in Vermont. If a worker has any doubt, he or she should apply for benefits by calling the Vermont Department of Labor toll-free 1-877-214-3330.  The Vermont Department of Labor administers the unemployment laws in Vermont. Detailed information on unemployment benefits and other state labor laws can be found at www.labor.vermont.gov.

After a claim is made by a former employee, the Department of Labor will gather information concerning the employee’s termination through documents provided by the employer and employee and information gathered by telephone. Thereafter an initial determination will issue as to whether or not the employee is eligible for benefits. After this decision, the losing party will have the right to appeal the decision to an Administrative Law Judge (“ALJ”) who will hold a telephone conference which is much like a mini-trial where both parties participate at once, have the right to provide testimony of witnesses, cross examine the other party’s witnesses and introduce documentary evidence.  Both parties have the right to counsel in the hearing before the ALJ. Once the ALJ issues a decision, the losing party may appeal to the full Employment Security Board which will not take new evidence but will review the transcript of the hearing before the ALJ, the documentary evidence, applicable law and the oral arguments of the parties.

It is important to keep in mind that unemployment benefits are designed to provide the employee with a basic financial bridge to their next job.

It is not a genuine test of whether or not there was a “wrongful discharge” as the law is designed to pay benefits in the ordinary course as part of the “safety net” implemented through the Social Security Act.  In fact, in almost all cases nothing that takes place during the unemployment process or any findings that the Department of Labor makes are admissible into evidence in a later wrongful discharge proceeding before a court or administrative agency. When an employee qualifies for benefits the employer’s experience rating will increase and this may affect the percentage of unemployment insurance tax based on an employer’s total payroll.  Therefore the employer does not pay for the full amount of the benefit (there are exceptions among public employers) but just a fraction of the cost in an increased unemployment tax.

If an employee is laid off due to economic reasons or fired for unsatisfactory performance, the worker is ordinarily entitled to benefits.  The following reasons for a termination are not disqualifying according to the Department of Labor:

• Ineptitude
• An argument between the employee and employer
• A difference in work habits
• An unintentional mistake
• A temporary lapse of sound judgment
• A single instance of bad behavior.

On the other hand, if the employee is terminated for “gross misconduct” the worker will be disqualified for benefits and will have to go back to work, earn six (6) times the worker’s benefit amount and is terminated by the next employer through no fault of their own in order to re-qualify for unemployment.

The burden is on the employer to establish that the employee is ineligible for benefits by proving they engaged in “gross misconduct.” Gross misconduct is defined as a deliberate disregard of the employer’s interests after at least one warning is issued.  Obviously, if a worker punches a supervisor, steals from the employer or engages in other egregious misconduct, or commits arson they will usually be found to have engaged in gross misconduct without the need for a prior warning. The Department of Labor will focus on whether or not the employee’s actions were deliberate or intentional.

This is where evidence of a prior warning to the employee is critical for the employer’s case.  The Department of Labor wants to see that the employee knew that their conduct was wrongful and yet deliberately continued to engage in that behavior.  The warning given must be issued for the same offense for which the worker is fired. Therefore, if an employee is written up for persistent tardiness but is fired for violating a safety rule, that written warning will not help the employer’s case.

The employer must keep detailed records, such as copies of prior warnings, written, dated and signed by the employer and, ideally, the employee. Oral warnings should also be memorialized in the employee’s file in a writing dated and signed. The written warning should clearly identify the unacceptable behaviors, give specific recommendations on how to improve and state that if the behavior continues the employee will be terminated. In certain circumstances written statements from co-workers who may have witnessed the behavior are advisable. If there is some concern of a future wrongful discharge lawsuit, the employer should consult with counsel before preparing witness statements or submitting material to the Department of Labor.

Each case is decided on its own facts so it is difficult to give black and white examples of disqualifying gross misconduct.  However, provided there is a written record of warnings, a worker who persists in refusing to wear a VOSHA mandated ventilator or comply with other safety rules are examples of gross misconduct, exposing the employer to VOSHA fines and citations. Other examples include an employee who persistently lies, surfs the web instead of working, or deliberately fails to satisfy employer attendance requirements without excuse.

In limited cases an employee who quits may be eligible for benefits if he or she quits for “good cause” attributable to the employment. In these cases, the burden of proof is on the employee to show there are substantial reasons which forced the employee to quit. First, the employee must show that he or she brought the issue to the employer’s attention and the employer failed to remedy the situation.  Secondly, the employee needs to prove that there are significant reasons why he or she could no longer work under these circumstances.  For example, where an employer/owner touches an employee in a sexual manner or engages in sexual harassment which does not stop after an employee complaint, the Department of Labor has found these facts to be sufficient to be good cause for quitting, entitling the employee to unemployment benefits.  A severe cut in pay, workplace bullying or a significant change in duties may also qualify.

The FLSA overtime case filed on behalf of 704 current and former Vermont state employees is before the United States Court of Appeals for the Second Circuit in New York. The case, known as Sheila Coniff et al., on behalf of themselves and those similarly situated v. State of Vermont et al., Docket No. 13-4198-cv, (2d Cir.), challenges the state’s practice of providing straight time overtime instead of time and one half overtime to employees once they reach pay grade 23.  The class of employees are from the corrections, judiciary, non-management and supervisory bargaining units.  All parties have fully briefed the case and oral argument in New York City should take place later this Fall.  Thereafter the Court will issue a decision.  Once we receive notice of the date and time for oral argument we will post that information so that state employees can attend if they wish.  Tom Somers, lead counsel for the class, says he welcomes any state workers to join him at the argument.

The federal court in Burlington ruled that the State was immune from suit under the Fair Labor Standards Act because of an ancient legal doctrine known as sovereign immunity.  In other words, the State argued that it was above the law that private employers must obey, and the trial court agreed.  The trial court also ruled that the state employees were “salaried”, which is required for an employee to be exempt from overtime, despite the fact that employees are not paid unless they work or have accrued leave, all earned on an hourly basis. Somers says, “We are optimistic about our chances with the Second Circuit. While I have high regard for Judge Sessions who ruled against us in the trial court, his ruling contains many legal mistakes which we believe the Second Circuit will not make.”

If anyone would like an electronic copy of the briefs filed by the parties in the 2d Circuit, please contact Kathy Bonilla in Somers’ office at 802-863-1191 or by email at kbonilla@bpflegal.com.