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Employment & Labor Law FLASHPOINTS September 2022

Catherine R. Locallo, Robbins Schwartz, Chicago
312-332-7760 | E-mail Catherine R. Locallo

Recent Seventh Circuit Case Addresses Declaratory Judgment, Equivalent Job, and Attorney’s Fee Awards Under FMLA

On August 16, 2022, in a matter of first impression, the Seventh Circuit Court of Appeals held that the Family and Medical Leave Act of 1993 (FMLA), Pub.L. No. 103-3, 107 Stat. 6, provision for equitable relief includes a declaratory judgment, which then allows for a grant of attorneys’ fees to the prevailing plaintiff. Simon v. Cooperative Educational Service Agency, No. 21-2139, 2022 WL 3366431 (7th Cir. 2022).

Background

The facts are relatively simple in this case. Cooperative Educational Service Agency #5 is a Wisconsin-based governmental entity that services 35 public school districts. 2022 WL 3366431 at *1. In July 2014, the Cooperative hired Sarah Simon as an Alternative Program Lead Teacher at REACH Academy. Id. In this role, Simon taught students, managed paraprofessionals, developed integrated education plans (IEPs), and communicated with parents, school districts, social workers, and law enforcement officials. Id.

A little over two years later in October 2016, Simon was injured on the job when a student kicked a steel door into her head. Simon was approved for and took FMLA-qualifying leave from her teaching position. She was released to return to work on November 24, 2016, with no restrictions. The Cooperative did not, however, return Simon to the teaching position she held prior to taking FMLA leave because it determined that doing so would present an “unreasonable risk.” Id. Instead, they placed her in a support position with duties resembling a paraprofessional. While Simon’s pay and benefits remained the same, the new position involved significantly less responsibility, independence, discretion, and management than her prior teaching position. Id.

Simon sued, and the United States District Court for the Western District of Wisconsin held a bench trial on her FMLA interference claim based on the Cooperative’s failure to return her to an equivalent position following her FMLA leave. Through the bench trial, Simon sought (1) an injunction requiring the Cooperative to hire her for the next available equivalent position at REACH Academy, (2) an injunction requiring the Cooperative’s employees to undergo additional FMLA training, and (3) a declaration that the Cooperative violated the FMLA when it failed to return her to an equivalent position following her leave. Id.

The district court found that the Cooperative violated the FMLA by not returning Simon to an equivalent position and awarded her declaratory relief, as requested, as injunctive relief would not be appropriate given the Cooperative’s hiring trends, the unavailability of the teaching position she had held prior to taking FMLA leave, and because Simon found employment elsewhere. Id. In connection with the declaratory judgment, the district court awarded Simon $59,773.62 in attorneys’ fees. 2022 WL 3366431 at *2. The Cooperative appealed the judgment on the merits and award of attorneys’ fees. Id.

The Seventh’s Circuit’s Decision

The question presented as a matter of first impression was whether the FMLA authorizes the entry of a declaratory judgment as “equitable relief.” 2022 WL 3366431 at *3. If so, she may be entitled to attorneys’ fees. Id.

Following an analysis of the FMLA’s enforcement provisions, similar statutes, canons of statutory construction, treatises, and Supreme Court decisions, the Seventh Circuit answered the first question in the affirmative. Notably, the court found that the FMLA permits an eligible employee to bring a civil action against an employer for violations “to recover the damages or equitable relief prescribed” (29 U.S.C. § 2617(a)(2)). 2022 WL 3366431 at *3. In Spitz v. Tepfer, 171 F.3d 443, 450 (7th Cir. 1999), the court held that a suit seeking declaratory and other relief under §1132(a)(3) of the Employee Retirement Income Security Act of 1947, Pub.L. No. 93-406, 88 Stat. 829 (a statute similar to the FMLA), “was one under ERISA for appropriate equitable remedies” and noted that our precedents had “characterized suits by fiduciaries . . . for declaratory judgments . . . as actions in pursuit of ‘appropriate equitable remedies’ under the statute.” 2022 WL 3366431 at *3. The Seventh Circuit found no reason to treat the FMLA’s reference to equitable relief different from ERISA. Id.

It also found that the FMLA directs that an employer who violates the FMLA “shall be liable to any eligible employee affected . . . for such equitable relief as may be appropriate, including employment, reinstatement, and promotion” (29 U.S.C. §2617(a)(1)(B)). 2022 WL 3366431 at *4. Here, the word “including” suggests an illustrative, rather than exhaustive, list and thus “makes clear” that the authorization is not limited to the specified remedies there mentioned. Id., citing West v. Gibson, 527 U.S. 212, 144 L.E.2d 1996, 119 S.Ct. 1906, 1910 (1999).

Further support was found in Supreme Court precedents and findings that declaratory judgments “closely resemble” injunctive relief and the equitable origins of declaratory judgments. 2022 WL 3366431 at **5 – 6.

As to the merits, the district court made a factual finding that Simon suffered prejudice because Cooperative “parked her in a backwater position with materially fewer responsibilities until her contract ran out” and assigned her a new position resembling that of a paraprofessional, which was “below her professional capacity.” 2022 WL 3366431 at *6. Finding no legal error, the Seventh Circuit upheld the determination that Simon proved prejudice. Id. (“An employee that must give up her fulfilling job for one in which she is overqualified suffers a ‘real impairment of [her] rights and resulting prejudice,’ as required by the FMLA.”), citing Ragsdale v. Wolverine World Wide, Inc., 535 U.S. 81, 152 L.Ed.2d 167, 122 S.Ct. 1155, 1162 (2002). The Seventh Circuit further found that Simon suffered harm from the Cooperative’s action in that she worked below her provisional capacity for most of the school year, and, like any professional who spends time away from their area of expertise, will likely have to explain away that wasted period to prospective employers. Id.

The Seventh Circuit also answered the second question in the affirmative and upheld the grant of attorneys’ fees to Simon. 2022 WL 3366431 at *8. There was no error by the district court, rather, it “merely applied the FMLA as written, which expressly requires attorney’s fees after a judgment entered in the plaintiff’s favor” (29 U.S.C. 2617(a)(3)). Id.

Key Takeaways

A declaratory judgment or a grant of injunctive relief under the FMLA can serve as the basis for an award of attorneys’ fees to a prevailing plaintiff.

If an employee returning from FMLA leave is not reinstated to the position held prior to the leave, an employer should conduct a careful analysis that the position is in fact an “equivalent position” and not below the employee’s professional capacity and duties.

For more information about employment and labor law, see EMPLOYMENT TERMINATION: EMPLOYER OBLIGATIONS AND WORKPLACE CONSIDERATIONS (IICLE®, 2022). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

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