Issue
In Liu v. Amway Corporation, (2003 WL 22455733), the United States Court of Appeals, Ninth Circuit, addressed the issues of whether an employee presented sufficient evidence that her employer violated her rights under the federal Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA) by interfering with her right to take leave and by impermissibly considering her use of leave as a factor in her termination.
Facts
A few weeks before she was expected to return from maternity leave, Xin Liu, a scientist employed by the Amway Corporation, requested approximately two months additional leave because she had been experiencing fainting spells and fatigue. Although her supervisor initially denied her request, one week before her anticipated return date he agreed to a one month extension, but he changed the classification of the extended leave from pregnancy leave to personal leave of absence. Before her newly extended leave was complete, Ms. Liu again asked for an extension of leave to provide care for her terminally ill father and to continue caring for, and bonding with, her newborn. Again, her supervisor initially denied the request, but subsequently agreed to an additional one-week extension after Ms. Liu contacted Amway’s Human Resources Department to explain her situation. During the extended leave, the supervisor informed Ms. Liu that he was assigning her primary project to another employee, mentioned that Amway was downsizing, and completed a performance evaluation which reflected a 19% drop from the score she had received just six months earlier from her former supervisor. During the downsizing, Amway decided to terminate Ms. Liu’s employment based on her overall performance evaluation scores and her supervisor’s recommendation. Ms. Liu’s supervisor classified her as the weakest in his group and recommended her for termination despite the fact that her prior evaluation score was one of the two highest in her department.
Ms. Liu brought a lawsuit in federal district court. The district court granted summary judgment (a judgment without a full trial) in favor of Amway finding that it had not interfered with Ms. Liu’s FMLA and CFRA leave because she was on leave when her employment was terminated.
Appellate Court Decision
The Court of Appeals found that the district court erred in granting summary judgment in favor of Amway. Pregnancy leave taken pursuant to the California Fair Employment and Housing Act is distinct from leave granted under the FMLA and CFRA. Under the FMLA and CFRA, an employee has a right to take up to twelve weeks of leave to care for her baby, herself, or a close relative with a serious illness. Upon return from leave taken under the FMLA and CFRA, an employee “has the right to be restored to his or her original position or to a position equivalent in benefits, pay, and conditions of employment.” An employer is prohibited from interfering with the employee’s right to take such leave. An employer violates the FMLA/CFRA by not only refusing leave but by discouraging an employee from using such leave or by using the employee’s decision to take leave as a negative factor in employment decisions.
The Court of Appeals found that the actions of Ms. Liu’s supervisor in repeatedly refusing to grant extensions of leave to which she was entitled and pressuring her to reduce her leave time constitute interference with her rights. The Court also concluded that the mischaracterization of FMLA/CFRA leave as personal leave also constitutes interference because the mischaracterization allowed her supervisor to retain control and discretion to deny leave. Ms. Liu was not required to expressly assert her rights under the FMLA because Amway had a responsibility to properly identify her leave. The Court concluded that the FMLA’s enforcement mechanisms are designed so that employees do not have to plead and negotiate for leave to which they are entitled.
The Court also concluded that Ms. Liu presented sufficient evidence that Amway impermissibly considered her decision to take protected leave as a factor in its decision to terminate her employment. Her supervisor’s evaluation served as a central factor in her termination. The lowest scores given by the supervisor were in areas that are subjective and more susceptible of abuse and the 19% drop in Ms. Liu’s overall score created an inference of impermissible motivation. Moreover, Ms. Liu presented sufficient evidence that the evaluation may have been tainted by the supervisor’s attitude towards her decision to take leave.
The Court also concluded that Ms. Liu presented sufficient evidence that she had been terminated in violation of public policy. Therefore she was entitled to a full evidentiary trial on those issues. However, it denied her claim of breach of implied-in-fact contract because the evidence suggested there was no implied-in-fact contract because she had been employed by Amway for only a short period of time and there were explicit at-will employment provisions in her employment letter and employee handbook. It further found that there were no contract terms to support Ms. Liu’s claim of breach of covenant of good faith and fair dealing.
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