July 5, 2011: Employees on Leave Should Not Be Automatically Terminated After A Specific Period of Time

Deciding whether to terminate an employee who is on leave is a question fraught with potential liability under the Americans with Disabilities Act (“ADA”).  Many employers think that once employees have been on leave for a specific period of time (e.g., the 12-week FMLA period or the 26-week short-term disability period), they can be automatically terminated if they are not ready to return to work.  The EEOC’s Enforcement Guidance on Reasonable Accommodation states, however, that if an employee with a disability needs additional leave as a reasonable accommodation, an employer must allow the employee the additional leave time unless doing so would cause an undue hardship.

In a recent settlement of a lawsuit brought by the EEOC against Denny’s, Inc., the restaurant chain will be required to modify its corporate policies regarding employees with disabilities as part of a consent decree signed by a United States District Judge on June 20, 2011.  One of the issues that came to light in the case was an apparent practice by the company of informing employees on short-term disability leave that they would face termination if their leave exceeded the 26-week maximum for such leave. Denny’s will also pay $1.3 million to dozens of former employees as part of the settlement.

Thus, under the ADA, an employer cannot simply refuse to hold a job open for an employee on leave as a matter of policy.  If an employee cannot give a definite time period for the duration of a disability, however, continuing the leave of absence for an indefinite and perhaps lengthy time period is arguably a significant burden on any business and termination of the employee should be legally permissible.

About Kruchko & Fries:

Kruchko & Fries is committed to an intensive employment law practice limited to the representation of management in all phases of labor, employment and benefits law, equal employment opportunity law, wage and hour law, occupational safety and health law, and related litigation.  Our Firm’s practice is concentrated in Maryland, Pennsylvania, Virginia and Washington, D.C.; however, our clients are located throughout the country.

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