Hiring of Replacement Is Adverse Employment Action for FMLA Purposes

In Budhun v. Reading Hospital and Medical Center, one of the issues before the United States Court of Appeals for the Third Circuit was whether Ms. Budhun suffered an adverse employment action. This is an oft-litigated issue in Family and Medical Leave Act cases as employers often restore employees to different positions with different terms following the conclusion of an FMLA leave. Budhun provides an interesting, and somewhat unusual, example of such an issue.

Vanessa Budhun was working as a credentialing assistant in July 2010 when she broke her fifth metacarpal bone. After reporting for work on her next scheduled day, Ms. Budhun was sent and e-mail from Human Resources stating her supervisor had notified HR that Ms. Budhun was unable to work “full duty” and FMLA forms were attached to the e-mail. Ms. Budhun took the FMLA forms to her doctor. The doctor stated it would take 10-15 days to complete the forms and issued a note in the interim stating Ms. Budhun would be able to return to work without restrictions on August 16, 2010.

Ms. Budhun reported to work on August 16, 2010 with a splint on her hand that, according to the record, enabled her to perform her job albeit at a slower pace. Human Resources informed Ms. Budhun that her doctor’s note stating she could return to work without restrictions was insufficient because the splint she was wearing impeded her ability to do her job at full speed. Ms. Budhun was directed to contact her doctor and ask to be taken off of work until she would be able to perform her job duties at full capacity. Ms. Budhun complied with this request and obtained paperwork from her physician extending her leave first through October 8 and later through November 9.

While Ms. Budhun was on leave, Reading Hospital and Medical Center made the decision to permanently hire another employee for the position Ms. Budhun held prior to the commencement of her leave. When Ms. Budhun contacted the Hospital to discuss her return to work, she was informed she had been replaced, she was not eligible to transfer to another position within the Hospital because of her prior written discipline, that she would have to apply for another position as if she was a new employee, and she would be terminated if she was released to return to work before she found another position at the Hospital. Ms. Budhun was also asked by e-mail to pick up her belongings and turn in her identification badge and keys. Ms. Budhun remained on leave until November 9, 2010 and never attempted to return to work thereafter.

At the District Court level, the Hospital successfully argued that Ms. Budhun’s actions at the conclusion of her leave – not applying for another position and not attempting to return to work – foreclosed her ability to claim the Hospital had failed to restore her to her previous position or to a comparable position. On appeal, the United States District Court for the Third Circuit disagreed. That Court ruled that Ms. Budhun had presented two plausible examples of FMLA retaliation with respect to the failure to restore her to work following her FMLA leave. First, she was denied the ability to return to work on August 16, 2010 despite having been cleared to do so by her physician. Second, the Hospital replaced Ms. Budhun and notified her that her employment would be considered to have been terminated unless she was able to successfully apply for another job within the Hospital prior to the conclusion of her FMLA leave. Both of these actions, according to the Court, “significantly altered [her] duties and status” which qualify them as being adverse employment actions and those actions could be viewed as having been related to her taking of a job-protected FMLA leave. Thus, Ms. Budhun was allowed to proceed with her FMLA retaliation claim as it related to her inability to return to the position she held at the commencement of her FMLA leave or to a comparable position.