Terminate Employee After One Year of Sick Leave?

Dear Ask Rita:  Our agency limits the maximum time an employee can be out on a medical leave of absence to one year. One employee who has been out with a medical condition is now approaching the one-year mark, but she hasn't been in contact with us for the past four months. I don't have the time to call every employee on leave. Am I OK just sending this employee a termination letter if she does not return at the end of the year?  Signed, Overwhelmed in HR

Dear Overwhelmed: This common question -- Can an employer terminate an employee who exceeds the maximum medical leave? --  raises many complex issues. Employees are not infrequently out on extended medical leave for reasons such as stress, cancer treatments, chronic back pain, or a host of other medical conditions.

What is clear, however, is that you want to tread carefully in this area. In September 2009 the largest Americans with Disabilities Act [4] (ADA) settlement in a single lawsuit was announced when Sears Roebuck agreed to pay $6.2 million [5], based on Sears' practice of firing employees who had exhausted their workers' compensation leave.

The Equal Employment Opportunity Commission (EEOC) ruled that Sears did not engage in an interactive process with these employees to determine if a reasonable accommodation could be made to allow these disabled employees to return to work, nor did Sears consider whether a brief extension of their leave would make their return possible. The EEOC stated: "The era of employers being able to inflexibly and universally apply a 'leave limits policy' without seriously considering the reasonable accommodation requirements of the ADA are over."

In other words, an employee who has been out for chronic back pain could be considered a disabled employee for whom reasonable accommodation [6] should be considered. And now that you realize you cannot automatically terminate a potentially disabled employee who is on leave for longer than your policy allows, we need to determine which laws apply. If your agency has fewer than 15 employees, you are not subject to federal ADA regulations, but you'll still need to check on your state laws. For instance, in California, the Fair Employment and Housing Act [7] applies to employers with 5 or more employees. If you are not covered by federal or state disability laws, you're free to follow the policies in your employee handbook.

However, if your agency is large enough to be covered by these laws, next you need to determine whether your employee is disabled and thus covered by the ADA. With the 2008 Amendments to the ADA the definition of "disability" was expanded to such an extent that it is hard to imagine that an employee out for a year due to a medical condition would not meet the definition of "disabled." An individual is considered disabled if her condition substantially limits her ability to perform a major life activity. More information regarding reasonable accommodation under the ADA can be found at the EEOC website at www.eeoc.gov/laws/types/disability.cfm [8]

As mentioned in the Sears case, to comply with the ADA an employer has an obligation to engage in what is called an "interactive process" with a disabled employee to determine if there are any reasonable accommodations that would enable the employee to perform her work prior to the employer taking any adverse action (like termination in response to a request for an extended leave). The interactive process is essentially an ongoing dialogue with the employee to explore ways that would enable the disabled employee to perform her job, as long as the accommodations do not pose an undue hardship on the employer. Common examples of reasonable accommodation include changing a job to part-time, allowing for a transfer to a different job, and so forth.

While the EEOC has concluded that employers must make an individual assessment to determine how long of a leave request is reasonable, it has opined that requests for indefinite leave are not reasonable and need not be granted. Moreover, if an employer has 50 or more employees and must comply with the FMLA, it cannot terminate employees who take leave for their own serious medical condition just because they have used up their 12-week leave entitlement. If the employee needs additional leave due to a disability you must go through the interactive process at the end of the FMLA leave to determine how to proceed lawfully.

So here are the steps I recommend you take with the employee on leave, and remember to document all steps in the interactive process.

1. Even though you are very busy, you must contact the employee and ask her to provide you with updated medical information regarding her ability to return to work, and what restrictions, if any, would apply on her return. Ask the employee what accommodations she needs to retain her employment. Give her a reasonable time frame to return the information to you. If she doesn't respond, contact the employee again to advise her of the adverse action that will occur if the information is not received by the next deadline.

2. If you can't reach her, you must try again, and try all methods -- letter, voicemail, and email -- and tell her the consequences if she doesn't contact you within a certain period of time. If you do not hear from her (perhaps she has moved away), you can take termination action because she is, in effect, AWOL.

3. Evaluate the information provided by the employee and her medical provider to determine if there are any reasonable accommodations which would allow the employee to return to work, (e.g. part time work, modified duties, reassignment to a vacant position). If there are no accommodations which would allow the employee to return to work, evaluate whether additional leave time is reasonable, or whether granting additional time off creates an undue hardship for your agency.

4. Discuss the options with the employee and offer a reasonable accommodation to the employee if you can. If you believe no accommodation is possible,  list all accommodations that were considered and why they are not reasonable, either because they pose an undue hardship on your agency or pose a direct threat to health and safety. Consult with an HR professional or attorney prior to taking adverse action against a disabled employee. Ultimately, if no accommodation is deemed reasonable, this should be communicated to the employee in writing and further action can then be taken.

Lastly, although we sympathize with being overworked, terminating an employee is a serious step that demands contact with that employee -- and not just for legal reasons. Treating employees with respect and communicating well with them is an important part of any HR job.

See also:

Ask Rita: Wading Through the New Family and Medical Leave Act Regulations [9]