Tuesday, November 3, 2009

3rd Circuit - Accrued "Comp" Time" Counts Towards FMLA Leave

On September 23, 2009, the Third Circuit Court of Appeals in Erdman v. Nationwide Ins. Co., held that "comp" time (or "compensatory" time) that is accrued by an employee for overtime hours worked, may be included towards the 1,250 minimum hours of service needed to be eligible for Family Medical Leave, where enough evidence exists to show that the employer had either actual or constructive knowledge that the employee was accruing "comp" time hours.

In this case, the plaintiff, Brenda Erdman, sued her former employer, Nationwide Insurance Company, alleging that she was terminated from her position in 2003 in retaliation for requesting FMLA leave in order to care for her daughter, who has Down Syndrome. Nationwide argued that Erdman was fired for unrelated behavioral problems, such as allegedly using profanity on a phone call that was being monitored for quality control.

Before the trial court, Nationwide moved to dismiss Erdman's FMLA claim, alleging that she had not accrued the requisite 1,250 hours of service over the previous 12 month period necessary to become eligible for FMLA leave in the first place. Erdman calculated that she had accrued 1,298.25 hours within the relevant time period, which included "comp" time hours that she accrued from extra work performed at home in 2002. Nationwide disputed the inclusion of Erdman's "comp" time hours, arguing that in 2002, it had no knowledge, either actual or constructive, that Erdman had been working extra hours and accruing "comp" time, and that in February, 2003, Erdman's supervisor specifically told Erdman that she could no longer use extra hours for "comp" time. Nationwide also pointed to a conversation between Erdman and her former supervisor, wherein Erdman was told to "put in the hours that you're supposed to put in and nothing more than that." The trial court agreed with Nationwide and excluded Erdman's "comp" time from the FMLA hours calculation.

On appeal, the Third Circuit disagreed, and vacated the dismissal of Erdman's FMLA claim. The Court of Appeals held that on the evidence presented, a reasonable jury could conclude that Nationwide did, in fact, possess actual or constructive knowledge that Erdman was accruing "comp" time in 2002. The Court held that the conversation relied upon by Nationwide in which Erdman was told to only "put in the hours that you're supposed to put in," was not supportive of Nationwide's position, as it made no specific reference to "comp" time accrual. The Court also pointed to an email that was sent by Erdman to her supervisor during the relevant period, in which Erdman sought to clarify whether she was still authorized to work extra hours for "comp" time, but to which she received no reply. On this evidence, the Court of Appeals concluded that Erdman's FMLA claim should should have been sent to a jury, to determine whether Nationwide intended to prohibit all out-of-the-office work, or whether Nationwide had only intended to preclude Erdman from earning overtime, while still allowing her to accrue "comp" time.