When using a third-party administrator for leave issues such as FMLA, employers need to ensure proper coordination of their policies with the timing of responses by the third-party administrator. If not, it could leave the employer liable for either interference of FMLA or ADA violations.
Case in point – take the situation of Blanchet v. Charter Communications, LLC,. No 21-5073 (U.S. Sixth Circuit of Appeals, 3/8/22). Charter Communications hired Kelly Blanchet as a Direct Sales Representative (“DSR”) in July 2014. As a DSR, Blanchet was responsible for selling Charter’s services door-to-door in residential neighborhoods. Blanchet quickly excelled in her role, receiving positive feedback from her closest supervisors.
During Blanchet’s employment, she became pregnant and requested maternity leave. She applied for and received Charter’s standard maternity leave, short-term disability benefits, and Family and Medical Leave Act (FMLA) benefits until September 4, 2016. After giving birth to her child on July 11, 2016, Blanchet developed postpartum depression. As a result of her medical condition, Blanchet requested an accommodation of additional leave under the FMLA, which extended past her initial return-to-work date of September 4, 2016.
Charter uses a third-party administrator for all leave requests. At that time, Sedgwick was the third party who administered disability leave for Charter and was primarily responsible for all direct communications with employees who requested leave. All employees, such at Blanchet, were told clearly that they should not communicate directly and should only communicate with Sedgwick about their leaves – not Charter.
Blanchet first sought and was approved for FMLA leave until it was exhausted on September 30, 2016. Blanchet then obtained short-term disability leave until it was exhausted on January 8, 2017. Charter subsequently approved Blanchet for long-term disability leave through February 1, 2017, as an ADA accommodation.
However, Sedgwick had a pattern and custom of having paperwork approvals delayed long after the initial verbal approval. For example, Blanchet did not receive formal approval for her first request for disability leave until February 3, 2017, two days after she was expected to return to work.
But Blanchet needed more time off. On February 3, 2017, Sedgwick received a letter from Blanchet’s doctor which indicated that Blanchet’s return to work date was “unknown at this time” but that Charter should “expect April” as a timeframe for her to return to work. The letter also indicated that Blanchet “would not be capable of working from home or in any other setting due to her severe depression.”
Blanchet also contacted a Sedgwick representative because she was concerned that she had exhausted her FMLA benefits and did not know how that would impact her employment with the company. Blanchet requested a 60-day accommodation, from February 2017 through April 3, 2017, to allow herself time to adjust to her new medications. When Blanchet contacted the Sedgwick representative about this extension, the representative assured Blanchet “not to worry about [her] job” and that “they were [her] job protection.” After Blanchet followed up a few weeks later with a Sedgwick representative, she was assured that “all was ok,” the representative “knew of no reason this [application] would not be approved,” and that Blanchet should be “receiving [her] approval letter for April 3, 2017.”
Yet Blanchet was terminated. She relied on that verbal approval for continued time off and continued her treatment with the psychiatrist. On March 9, 2017, Blanchet received a termination letter from Charter stating that she was separated from the company “effective January 10, 2017.”
Prior to receiving this termination letter, no representative from Charter or Sedgwick contacted her to explain that her request for an accommodation was not reasonable. In addition, no representative from either Charter or Sedgwick requested additional medical records or reached out to inquire for more details on Blanchet’s condition.
Blanchet sued for disability discrimination under the Americans with Disabilities Act (ADA). The trial court dismissed the case on summary judgement, but the U.S. Sixth Circuit Court of Appeals reversed and reinstated the case.
The Court went through an analysis to show that the direct proof of discrimination applied in this case. Charter argued that although Blanchet was considered disabled, the doctor’s note claiming to “expect April” for Blanchet’s return was too vague to constitute a definitive date and that neither the Charter HR manager nor Sedgwick were authorized to approve a terminated employee’s leave. Yet Charter’s actions, either directly or through its agent Sedgwick, gave Blanchet the impression that the leave was approved. Sedgwick told Blanchet that the approval letter would be coming, and Charter’s HR Manager said the leave was ok to approve. Further, another HR representative said that the leave Blanchet requested could be “possible” for a Charter employee.
As the Court stated, “Charter’s fatal administrative mistakes and lack of clarity regarding Blanchet’s termination date thus raise genuine disputes of material fact as to whether a ‘reasonable accommodation’ was possible.”
The takeaway for HR is that the right hand should be coordinating with the left hand. If using a third-party administrator for leaves, make sure that the administrator is following the employer’s policy and is timely in all responses. As the court points out, “Charter never spoke directly with Blanchet, decided to fire her before even telling her that the accommodation was unreasonable, and led Blanchet to believe that her accommodation would be approved. Charter cannot now use its failure to engage in the interactive process to argue that Blanchet’s proposed accommodation was unreasonable.”
Source: Shawe Rosenthal LLP 3/31/22