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More on Velez: How This Decision Might Impact Employers

Posted in Litigation

My post yesterday on a new Superior Court decision in Velez v. Mayfield has generated a lot of discussion from the counsel for the individual who brought the suit. (You can also view the original DOL decision here.) 

As I mentioned in the update, the case is being appealed so it’s very likely we’ll get Appellate Court or Supreme Court guidance on this issue. But assuming Velez is allowed to stand, let’s talk about a few more examples of how this decision might impact employers.

Example 1:

Suppose an employer has 100 employees in Texas and 1 sales employee based in Connecticut, who must care for a sick family member.  The employee in Connecticut would not be eligible for federal FMLA leave because the worksite that he or she works at has less than 50 employees.  However, the employee would be eligible to receive Connecticut FMLA (16 weeks over 2 years), under Velez.  

What might the employer be required to do? In some instances, provide the FMLA leave and then hire a temporary replacement or move another employee to temporarily fill the position on an interim basis.  When the FMLA-eligible employee is ready to return to work, Conn. Regs. 31-51qq-21 seems to specify a likely path : 

[The] employee is entitled to be returned to the original position the employee held when leave commenced, or if the original position is not available, to an equivalent position with equivalent benefits, pay and other terms and conditions of employment. An employee is entitled to such reinstatement even if the employee has been replaced or his or her position has been restructured to accommodate the employee’s absence.

There are, of course, some exceptions. If the employer decided to simply close the Connecticut facility, that might dictate a different course, but in the example above, the employer is in the difficult position of living with a great deal of uncertainty for a small office where temporary replacements might be difficult to find.

Example 2:

Although the court in Velez suggests that its decision may help smaller employers in Connecticut, it might also hurt them too because it could impact Connecticut-based employers that have — until now — been seen as being exempt because they were too small to be covered.  Suppose an employer has a Connecticut office of 40 employees, with approximately 40 other employees working on a part-time basis at various locations outside the state. Federal FMLA would not kick in, again because the worksite has less than 50 employees. But under Velez Connecticut FMLA would now seem to apply to all of the Connecticut employees because the company employs more than 75 employees.

One question left unaddressed by the decision is what impact might this have if its analysis were applied to other labor and employment laws. For example, the discrimination laws (Conn. Gen. Stat. Sec. 46a-51) specify that an employer is a company that employs three or more persons. Would out-of-state workers be included in that calculation as well?

Other statutes raise similar questions: Do the rules prohibiting smoking in the workplace have to count out-of-state workers too? (Conn. Gen. Stat. Sec. 31-40q). Why are the workers compensation statute definitions (Conn. Gen. Stat. Sec. 31-275(10)), which are undoubtedly intended to cover employees of small branch offices, structured so differently if — as the court states — the intent was the same? And the same could be asked about the unemployment insurance statutes too (Conn. Gen. Stat. Sec. 31-223).

In the meantime, companies with employees in the state should take a hard look at their exposure on this issue.

  • Peter Goselin

    Dan,
    As you suggested, it’s quite true that I have had a few years to hone my arguments on this issue. And I’ve thought through quite a few hypotheticals. But here’s a mind-numbing one for you.
    Company x has 500 employees in all, spread around the country. In fact, it is spread around the country in such a fashion that except for Connecticut it does not meet the statutory threshold under the federal FMLA nor does it do so in any state that has a state law equivalent. It has one employee in Connecticut who, post-Velez, is now covered by the CT FMLA – let’s call her Employee a. She is literally the only employee in this 500-employee company who qualifies for any form of leave to care for a spouse with a serious medical condition.
    Sounds horribly unfair, doesn’t it? After all, the company now has to bear the burden of giving her – and only her – a protected medical leave of absence when her spouse is in the hospital. Quel horreur!
    Except that this particular employee happens to work in Thompson, Connecticut, and her job is to run a one-person office for the employer there. And the employer has a five person office across the border in Webster, Massachusetts. So when they give her medical leave, they just send someone from the Webster office a few miles down the road to Thompson.
    Company y has 500 employees too. Only all of them are in Connecticut. So all of them (so long as they meet other eligibility requirements) can get federal and CT FMLA. One day, an employee of Company y notifies the employer that he needs FMLA to take care of his sick child. No matter the outcome in Velez, Company y is on the hook. And what a hook! Even though Company y has 500 employees, it happens that Employee b does a job that no one else employed by Company y can do. So Company y now has to hire a very expensive temp to do Employee b’s job.
    Which employer is being treated less fairly by having the statute applied to it? Employer x with 500 employees who, post-Velez, now has a heavy burden that it nonetheless can easily meet? Or Employer y with 500 employees who has always had to bear that burden, but for whom compliance is much more expensive?
    The point being, if the legislature is going to set a numeric threshold for application of an employee-protected statute such as the FMLA, all it can do is rough justice. It can’t really claim (and I don’t think the CT legislature ever did claim) that it has weighed all the equities and produced the fairest possible system for employers or for employees. That’s why I believe that the legislature’s expressed concern with “small employers” should be read as just that – employers with fewer than 75 employees in all. Because in real life, if we start talking about the employer with 100 employees but only 1 in Connecticut, we’re descending into a battle of hypotheticals that will make great law school exams but won’t actually do a better job of equitably sharing the burden.
    And, sure, if the statute included some plain language that made it 75 employees or more within the state of Connecticut (or within a 75 mile radius, or where the sum of the value of the letters in the employee’s last name was a prime number), I would think it had not done a very good job of protecting small employers but I’d have no rational basis to challenge it. But the statute is silent. To try to read something else into it in the name of a more perfect equity is, in the final analysis, a lost cause.

  • Hugh Murray

    Further to Peter’s point, the real issue for a business is knowing what the rules are and ensuring that if following the rules costs money then all your competitors are also following the rules. So the Court’s rejection of a longstanding reasonable administrative interpretation potentially creates a lot of “gotcha” problems in the short term, but if we end up with a definitive ruling then that is all to the good.
    And while this single ruling is unlikely to make the difference in any business making a decision about locating in Connecticut, if there are enough regulatory complications, then a business could well choose to locate somewhere else. The problem is less the substance of the decision – providing leave – than the sense of having to keep track of lots of complicated state specific rules. More short term work for folks like me and Dan, but potentially less economic activity for the state.

  • http://www.ctemploymentlawblog.com Dan Schwartz

    Hugh: The point you raise is an excellent one. If this is remains the rule, why wouldn’t an employer decide too set up shop in NY or RI (or just try to service business from those states) to avoid the administrative burden of this rule.
    Here’s an interesting sidenote: The paid sick leave bills now under proposal use the language of 50 or more employees “in the state”. I can’t imagine this is by accident; is this a side effect of the Velez battle below?

  • Hugh Murray

    Well, in Rhode Island an employer would have to remember to give employees Victory Day off, provide 10 hours off for school activities and a bunch of other state-specific rules, and I assume that New York has its own quirks. I think most employers will pay little attention to this in making big decisions until the state specific issues reach a critical mass in comparison to neighboring states.

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