Recent New Jersey Appellate Division Case Reminds Employers to Carefully Draft Written Communications to Employees Regarding Leaves of Absence

The New Jersey Appellate Division’s recent decision in Lapidoth v. Telcordia Techs., Inc., 2011 N.J. Super. LEXIS 103 (App. Div. June 9, 2011) serves as an important reminder that an employer must exercise care in communications with employees regarding leaves of absence to avoid unintended contractual obligations, even when the employer has complied with its statutory obligations.

Plaintiff had worked for Telcordia Technologies, Inc. (“Telcordia”) for a number of years as a part-time manager, and during the course of her employment had taken nine separate maternity leaves. When Plaintiff became pregnant with her 10th child, she requested a six-month maternity leave (a longer leave than is protected by the federal Family and Medical Leave Act or the New Jersey Family Leave Act). A short time after Plaintiff gave birth to her son, Telcordia sent Plaintiff a letter notifying her that it had approved her six-month leave of absence and that the leave would count towards her Family and Medical Leave Act (“FMLA”) entitlement. The letter also stated that the “leave was granted with a guarantee of reinstatement up to 12 months to the same or comparable job,” but that if Plaintiff’s job was “declared surplus” or if Plaintiff requested to work a different number of hours than she had worked before going out on leave, reinstatement would not be guaranteed. While out on leave, Plaintiff requested an additional six-month leave, which Telcordia granted. Telcordia again notified Plaintiff in writing that reinstatement following her leave was guaranteed so long as her position was not declared surplus and she did not request a change in her hours. As her one-year leave was about to end, Plaintiff informed her supervisor that she intended to come back to work on the same part-time schedule she had prior to her maternity leave. At her supervisor’s request, however, Plaintiff agreed to return to work as a full-time manager. Due to budgetary constraints, Telcordia could only maintain one full-time manager. Telcordia decided to terminate Plaintiff’s employment and retain the manager who had been acting as the manager during Plaintiff’s maternity leave, and who had better performance evaluations than Plaintiff.

Plaintiff filed a complaint against Telcordia for discrimination and retaliation under the FMLA and the New Jersey Family Leave Act (“NJFLA”) and for breach of contract to reinstate her employment at the conclusion of her leave. In granting Telcordia’s summary judgment motion, the trial court found that Telcordia’s Code of Business Ethics (“Code”) contained a clear statement that all employment was at-will and that the FMLA/NJFLA did not require reinstatement because Plaintiff took a one-year leave of absence.

The Appellate Division affirmed the lower court’s decision as to Plaintiff’s FMLA/NJFLA claim, but reversed as to the breach of contract claim. Relying on the United States Supreme Court decision Ragsdale v. Wolverine World Wide, Inc., 535 U.S. 81 (2002), the Court ruled that Plaintiff was not entitled to reinstatement after taking a one-year leave because the FMLA guarantees reinstatement only for leaves of 12 weeks or less. The Court then turned to the breach of contract claim and held that in this case, “the evidence could support a finding that defendant had promised to reinstate plaintiff’s position at the end of her leave.” The court noted “[w]hile defendant’s Code and employment application provided that employment was at-will and that nothing in the Code or any of defendant’s other policies, practices, and procedures created any contractual rights, defendant’s letters relating to its policy on maternity leave seemed to contradict those general provisions.”

This case serves as a critical reminder that employers must exercise care in their written communications with employees to avoid unintentionally creating a contract. When granting leaves of absence under the FMLA/NJFLA, employers should make it perfectly clear that reinstatement is not guaranteed if the employee takes more leave than is protected by the FMLA/NJFLA. If you have questions regarding employer obligations under the FMLA and/or NJFLA, please feel free to contact any of the attorneys in the Gibbons Employment & Labor Law Department.