A Recent Decision by the Nevada Supreme Court, Dillard Department Stores v. Beckwith, highlights the importance of a clear policy regarding employee leaves of absence. In particular, after Beckwith, employers should carefully consider and enforce rules regarding an employee’s treatment upon return to duty after a leave of absence. The Beckwith decision comes dangerously close to requiring employers to hold an employee’s job open indefinitely while he or she is out on leave due to a worker’s compensation injury
Before considering the Beckwith decision itself, employers should be familiar with other relevant law concerning leaves of absence, in particular, the Family and Medical Leave Act of 1993 (FMLA). That legislation requires private employers with 50 or more workers to provide eligible employees with up to 12 weeks of unpaid leave each year to care for a newborn child or newly placed adopted or foster child; to care for a child, spouse or parent with a “serious health condition”; or to deal with the employee’s own serious illness. Under certain circumstances, an employer may require the employee to substitute and count as FMLA leave any accrued paid vacation or personal leave, paid sick or medical leave or paid family leave. In addition, leave taken for a serious health condition pursuant to a worker’s compensation or disability benefit plan also may be designated by the employer as FMLA leave. In any event, concomitant with the requirement to allow the appropriate leave of absence, the FMLA generally requires that the employee be given the same or an equivalent job, with equivalent pay, benefits and other terms and conditions of employment upon his or her return to work. The act also forbids any other form of retaliation due to an employee’s FMLA leave.
To the extent an employee’s leave of absence is not covered by the FMLA, the terms thereof are generally a matter of contract. Thus, the conditions of the leave, and especially the return from leave, are generally dependent upon the terms of any applicable employment policy, even when the leave results from a worker’s compensation claim. While courts generally focus on any written employment policies in determining the proper relationship, even carefully drafted employment policies will not prevent a judgment for the employee where the employer engages in conduct that contradicts an otherwise at-will relationship and itself establishes a binding contract.
Absent any such contradictory conduct by the employer, an employee’s breach of contract claim usually depends on the wording of the employer’s handbook. A handbook that clearly provides for an at-will employment relationship is usually enough to prevent liability for the employer. However, courts may go beyond the general at-will language to determine whether the specific leave provisions nevertheless limit the employer’s discretion to terminate. Employers can preserve the at-will relationship by adding discretionary language to their leave-of-absence policy.
Regardless of the contractual relationship between the parties, most states, including Nevada, recognize a cause of action for wrongful, or tortious, discharge. That is, while an employer generally may discharge an at-will employee for any reason, or for no reason at all, the law forbids actions taken in contravention of public policy. The Nevada Supreme Court has upheld claims for tortious discharge only for (I) refusing to violate the law, (2) refusing to work under conditions unreasonably dangerous to an employee, (3) accepting jury duty, (4) filing worker’s compensation claims, and (5) engaging in certain “whistle-blowing” activities.
It was against this backdrop that the Beckwith decision appeared.* In Dillard Department Stores v. Beckwith, the Supreme Court of Nevada upheld a nearly $3 million jury award on the plaintiff’s constructive discharge and intentional infliction of emotional distress claims. The plaintiff, Debris Beckwith, had been employed by Dillard Department Stores for 25 years and had been an area sales manager for 19 years when she was injured at work. After filing a worker’s compensation claim, Beckwith was declared temporarily totally disabled. Knowing that she had not yet been released to work by her physician, Dillard’s management asked Beckwith to return to work. When she did not return, Dillard filled her job. Beckwith then returned to light-duty work approximately one month after her injury. Upon her return, Dullard gave Beckwith two choices — demotion to an entry-level sales position with a 40 percent reduction in pay, or resignation. At the time, the court found, there were two other area sales manager positions open for which Beck-with was qualified. However, Dillard’s management decided Beckwith was not qualified because she took time “off for workman’s [sic] comp?’ Beckwith initially accepted the demotion because she had no other source of income or medical benefits, but later resigned in response to management’s repeated failure to correct the continual humiliation perpetrated by her co-workers as a result of her demotion.
By upholding the jury instruction at issue, the Beckwith court seems to require employers to reinstate employees returning from worker’s compensation leave to their former positions, without limit. Such a holding would create a new obligation for employers. After all, nothing in the worker’s compensation law guarantees an employee will get his or her former job upon returning to work. While an employer may benefit from restoring an employee into his or her former position, such is not always the case, especially where an employee is on leave for an elongated period of time. In fact, in many cases, reinstatement is simply not feasible.
Therefore, the Beckwith decision should be read to uphold settled principles of tortious discharge and not as some vast modification of the common law of leaves of absence. To the extent the jury instruction upheld in Beckwith adds to existing jurisprudence, that addition must be limited to the facts involved. The Beckwith decision simply does not stand for the proposition that an employer must always reinstate an employee returning from worker’s compensation leave. Nevertheless, employers will decrease their exposure to liability by carefully drafting their leave-of-absence policies. Employers are encouraged to consult with their attorney in developing such policies. The following suggestions are intended as broad guidance only.
• Integrate all written leave-of-absence policies with the FMLA.
• In order to make FMLA leave run concurrently with paid leave, including worker’s compensation leave, the employer must give prompt notice to the employee.
• To the extent the employment relationship is intended to be at-will, the employer should clearly state that fact in various places throughout its written employment policies.
• Supervisory personnel should be trained in order to prevent the inadvertent creation of enforceable oral contracts.
• If an employer chooses to provide leaves of absence, the employer’s written policy should retain discretion in effecting any reinstatement, as in the following example: “The employee shall be reinstated to his or her former job if a vacancy exists, If no such vacancy exists, the employee shall be placed in any job in which there is a vacancy and for which the employee is qualified. Reinstatement is not guaranteed.”
• The employer should attempt to apply his or her policies in a consistent manner to avoid claims of retaliation and/or discrimination.
