Eighth Circuit Vacates Front Pay Award For FMLA Violation As Too Speculative

The Eighth Circuit recently held that an employer interfered with a sick employee’s job protection rights under the Family Medical Leave Act (“FMLA”) by failing to reinstate her to a position that she never actually performed. However, in the same decision, the court vacated a ten-year front pay award of $135,000 on the grounds that it was unduly speculative to assume that the employee would have lasted in a position that she never performed.

The Plaintiff, Christine Ann Dollar (“Dollar”), worked for Smithway Motor Express, Inc. (“Smithway”), an over-the-road trucking carrier. Dollar worked for Smithway for nine years until a battle with depression forced her to exhaust her sick leave and resign in 1998. She resumed employment with Smithway in 2006 as a driver manager. As a driver manager, she supervised and coordinated the activities of 35-40 truck drivers, which required substantial interaction with the drivers. By the spring of 2007, Dollar’s depression resurfaced and caused her to miss several days of work. her performance evaluation, her supervisor noted that her attendance and resulting productivity were below expectations. He also noted that her attendance issues were a particular concern for the driver-manager position. Dollar’s supervisor began looking for other positions that might be a better fit for Dollar in light of her attendance issues.

Dollar’s depression took a substantial and sustained turn for the worse in early June of 2009. She presented Smithway with several doctor’s notes excusing her from work and extending her sick leave through July 30, 2009. When Dollar’s supervisor received the doctor’s notes, he informed Dollar that she could no longer work as a driver manager and would be reassigned to a driver recruiter position. The recruiter position had essentially the same hours, pay, benefits and working conditions, but was less stressful and required less day-to-day interaction with other drivers. Dollar’s supervisor informed her that he could not guarantee her the position if she did not return by July 9, 2009. When Dollar insisted that she could not return until July 30th, she was fired.

Dollar filed a lawsuit alleging unlawful interference under the FMLA. The District Court ruled in her favor, finding that she was entitled to FMLA leave and adequately asserted her FMLA rights. Notably, while even Dollar admitted that she could not perform the functions of the driver manager position, the District Court found that she had been transferred to the position of driver recruiter prior to her termination. Accordingly, the District Court reasoned that Smithway should have restored her to her “former” recruiter position, which Dollar claimed she was able to perform.

The District Court awarded Dollar $80,793 in back pay, liquidated damages in the same amount, and a ten-year front pay award of $134,526. Smithway appealed the front pay award to the Eighth Circuit on the grounds that ten years of front pay was unduly speculative. Smithway argued that Dollar was wholly untested in the driver-recruiter position and the only evidence of her ability to perform the job was her personal subjective belief and the company’s vote of confidence as expressed in the transfer itself. Smithway also highlighted evidence showing that it ceased its business activities as part of a corporate restructuring and that its Iowa operations suffered a dramatic reduction in force. The Eighth Circuit found that the changes in operations created great uncertainty as to Dollar’s future prospects with Smithway. However, it reasoned that, even in the absence of the corporate restructuring, changes in operations, or reductions in force, “substantial speculation is required to conclude that Dollar would have remained in the position of driver recruiter more than the three and one half years following her termination,” which was essentially the length of time represented in her back pay award. The Eighth Circuit vacated the front pay award as unduly speculative, but affirmed the judgment of the District Court in all other respects. The Eighth Circuit, also noted, however, that her transfer to the recruiter position “was not necessarily required by the FMLA.”

In light of Dollar v. Smithway, employers should carefully document all reductions in force and changes in business operations – such records may create uncertainty as to employment longevity and limit front pay claims by former employees. 

Read the Full Newsletter: Labor & Employment Law Update May 23, 2013 »

Todd A. West