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FMLA: Tennessee court restores unemployment for worker who did not return from leave
January 16, 2016
Source: HR and Employment Law News - HR.BLR.com
Under Tennessee law, a former employee is not eligible for unemployment benefits if she left her most recent job voluntarily without good cause connected to her work. However, the law creates an exception to that rule (known as the "medical exception") if the employee was forced to leave because she was sick or disabled and she meets certain notice requirements, including offering to return once she is able to work.
The Tennessee Court of Appeals recently addressed whether someone who was discharged during a medical leave is eligible for unemployment benefits once she is cleared for work without restrictions. The court held that the employee was eligible for benefits even though she did not reapply for a job after her leave ended.
Melissa Phillips worked as a receptionist for Plateau Pediatrics and was, by all accounts, a good employee. In October 2013, she took medical leave after having shoulder surgery. The leave was extended after she underwent a second surgery. The next January, she told Plateau that the leave would likely last through April 2014.
In February 2014, Plateau told Phillips that it could not continue holding her position open, but once she was able to come back to work, she was welcome to apply for any open position for which she was qualified.
The next month, her doctor told her she could return to work. However, Phillips did not apply for any open position with Plateau or even inform her employer that she was cleared to work. Instead, she applied for unemployment that same day.
Based on the initial application by Phillips, the Tennessee Department of Labor and Workforce Development found that she was eligible for benefits. Plateau appealed, arguing she was ineligible because she did not return or offer to return to work after her medical restrictions ended. The appeals tribunal agreed with Plateau.
The tribunal found that Phillips stopped working because of a non-work-related medical condition and failed to return to work or ask for her job back. It held that the unemployment law requires an employee on leave to return and offer to work, even if she was told her job was not being held for her.
Phillips appealed the appeals tribunal decision to the board of review, which agreed with the tribunal. The board of review emphasized that because Phillips was terminated only after she initiated the separation by virtue of her leave, she was deemed to have voluntarily quit, making her ineligible for unemployment benefits. The board also found that she did not satisfy the medical exception, which is discussed below.
Phillips eventually appealed the denial of benefits to a trial court. The court reversed and found that she was, in fact, eligible for unemployment compensation. According to the court, because Phillips was involuntarily terminated, the voluntary termination exception to eligibility could not apply.
It also noted that the medical exception, which protects employees who lose their jobs because of medical incapacity after their leave expires, did not apply. Plateau appealed the decision to the Tennessee Court of Appeals.
Decision of the Court of Appeals
The Tennessee Court of Appeals agreed with the trial court and held that Phillips was not disqualified from unemployment benefits under either the voluntary termination exception or the medical exception. The court found, first and foremost, that she did not voluntarily leave.
Instead, Plateau involuntarily terminated her while she was on leave and invited her to reapply after she was released from restrictions. According to the court, that could not constitute voluntary termination under the first exception to eligibility. It did not matter that she did not reapply once she was cleared by her doctor.
Second, the court held that the medical exception did not apply to Phillips. The medical exception is an exception to the rule that employees who voluntarily quit are ineligible for benefits. Under the medical exception, if an employee quits for a medical reason, notifies the employer why she is quitting, and then returns and offers to work as soon as she is able, she essentially will not be considered to have "quit" and will remain eligible for unemployment benefits.
Plateau argued that because Phillips did not offer to return to work after her restrictions were cleared, she did not satisfy the requirements of the medical exception to disqualification and was therefore ineligible for benefits. The court disagreed, finding that because Phillips was terminated, she did not have to satisfy the medical exception requirements, which apply only when an employee voluntarily quits.
In other words, because Phillips did not disqualify herself from benefits, there was no need to rely on an exception to disqualification to "requalify" for benefits. Thus, the court of appeals found that she was eligible for benefits. Phillips v. Phillips, et al., No. E2015-00407-COA-R3-CV (Tenn. Ct. App., Oct. 8, 2015).
The first question you may be asking is: "How many appeals does someone get in this situation?" The answer is "a lot," and in fact, it is possible there could be one more final appeal in this case to the Tennessee Supreme Court!
In any event, what we can learn from this saga is that to be eligible for unemployment benefits, employees who quit for medical reasons must offer to return to work, but employees who are terminated during non-work-related medical leave do not have to offer to return in order to be eligible for unemployment benefits once their medical work restrictions are lifted. However, it is very important to note that terminating an employee on medical leave implicates a host of other potential legal issues.
While this case dealt solely with unemployment benefits, employers covered by the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), and state disability discrimination laws must be very careful before terminating employees on leave.
In many situations, medical leave will be considered an accommodation, and termination may not be a smart option. It is prudent to act cautiously and consider contacting an employment attorney before you make any employment decisions that affect employees on medical leave.
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