9th Circuit: Judge, Not Jury, Must Determine Front Pay in FMLA Cases

Online Exclusive: FMLA Expands for Military Family Members

Human Resources Manager Jill Traxler had worked for Oregon's Multnomah County for 15 years when she took her first unpaid medical leave for a serious physical health condition in 2002.

Three years later, Traxler took unpaid medical leave again. When she returned, her employer told Traxler her job was being eliminated. She was placed on administrative leave. Traxler was then transferred to a lower-paying position. She continued to take intermittent medical leave in her new post. She was fired in September 2005 after receiving a negative performance review.

Traxler successfully sued for damages under the federal Family and Medical Leave Act (FMLA) and its Oregon counterpart. In many ways it was a typical FMLA case. But the jury's award set this case apart and the county's appeal resulted in a precedent-setting 9th Circuit decision.

The FMLA entitles qualifying public- and private-sector employees to up to 12 weeks of unpaid leave during any 12-month period if the employee has a serious health condition, gives birth or adopts, or needs to care for a spouse, child or parent with a serious health condition.

The U.S. District Court for the District of Oregon found that Traxler never took more leave than FMLA allows and that the county took adverse employment actions against her because of her legitimate use of FMLA-protected leave. The jury awarded Traxler back pay of $250,000 and close to $1.6 million in front pay for future compensation in lieu of reinstatement--25 percent more than the maximum she requested.

After trial, the county asked the district court to wipe out the $1.6 million award on the basis that only judges can award and assess front pay. To the relief of Multnomah County taxpayers, the district court agreed, slashing Traxler's front pay to $267,000--still nearly four years' salary. She wound up with $640,717, including attorneys fees.

Traxler appealed, but the 9th Circuit recently rejected her bid to restore the $1.6 million award. "Under the FMLA the equitable award of front pay, including the amount, rests solely with the court, not the jury," the appeals court unanimously held in Traxler v. Multnomah County.

Equitable Relief

The decision is salutary for all employers, says Carl Bosland, managing director of Bosland Consulting Group, which advises on FMLA and state family medical leave requirements. "It helps employers in the sense that it's keeping the decision on the amount of equitable remedies in the FMLA in the hands of a judge, who is apt to be more reasonable in assessing the amount of damages than a jury might be," Bosland explains.

The decision also marks the first time that the 9th Circuit has decided whether courts, rather than juries, determine front pay under the FMLA, notes Catherine Barbieri, a partner at Fox Rothschild.

"As the court points out, it accords with the decisions in the 4th, 5th and 10th Circuits--only the 6th Circuit so far has differed," notes Barbieri. "It's also consistent generally with what is done under other anti-discrimination statutes."

The three-judge 9th Circuit panel pointed out in its Feb. 26 opinion that the FMLA doesn't even mention front pay. Rather, the statute authorizes damages for past costs, including lost wages and benefits, as well as prospective remedies "for such equitable relief as may be appropriate, including employment, reinstatement and promotion."

Judge M. Margaret McKeown wrote in the opinion: "The court's power under the FMLA to award front pay, as an alternative to reinstatement, is derived solely from the statutory provision permitting the court to award 'such equitable relief as may be appropriate.'" Therefore, as an equitable remedy, "it makes little sense to say that the availability of front pay is a judicial determination and the amount a jury determination," the court reasoned.

Moving Target

While employers can take comfort in the decision, the FMLA itself remains a headache for companies, says Heather Owen, a partner at Constangy Brooks & Smith.

"It's extremely complicated," Owen says. "This kind of leave is not taken in straight blocks. A good portion of the time it's taken intermittently. It's very difficult to keep track of what's FMLA leave and what's not FMLA leave."

To complicate matters, the FMLA has been a moving target for the last couple of years, with Congress and both the Bush and Obama administrations amending the statute and its regulations. The FMLA was changed to expand what is covered--military caregiver and exigency leave, for example--and who is covered.

Democrat-sponsored bills in the House seek to further broaden the FMLA's scope.

"The holy grail for Democrats has always been providing some level of paid [FMLA] leave," says Marc Freedman, executive director of labor law policy at the U.S. Chamber of Commerce. "The one that we are most concerned about is the Healthy Families Act, which creates a seven-day paid leave mandate, essentially for sick leave and if your child or other family members are sick and you have to stay home with them."

He adds that the bill "doesn't seem to be moving at this point."

Bosland anticipates some additional FMLA expansion will be pushed through, if only because President Obama campaigned on the issue. "I think he needs to throw some red meat out to his base," he says.

Contributing Author

Cristin Schmitz

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