Key to remember:  ​Employers may not take a negative employment action, including pay reduction, because an employee exercised FMLA rights.

Applies to: All public employers, and private employers with 50 or more employees.

Impact to customers: This case helps customers understand their obligations and limitations in relation to reacting to an employee who takes FMLA leave.

Pahal’s elderly mother had some health issues. He’d travelled to India to help once before, and the second time, the sudden situation did not allow him time to apply for FMLA before he left. He did, however, ask for FMLA leave shortly thereafter. While away, he even did some work remotely.

About a month later, he was suspended without pay for one week due to this and previous absence.

After objecting to the suspension, the employer rescinded it, but began investigating termination based on Pahal’s absence without notice. The employer again changed its mind, but months later, Pahal was told that he would be suspended for about three weeks, resulting in a substantial pay reduction.

As a result, Pahal filed suit, arguing that the pay reduction was punishment for exercising his FMLA rights.

The employer argued that it had a legitimate, non-discriminatory, and non-retaliatory reason for temporarily withholding Pahal’s pay — taking the sudden leave without notice. It also argued that pay withholding did not violate the FMLA.

To win his argument in court, Pahal had to show that:

• He requested and took FMLA leave in relation to his trip to India,
• He suffered an adverse employment decision when the employer withheld his pay, and
• The withholding of his pay was causally related to his taking FMLA leave because it was punishment for his being “absent from [work] without justification.”

The employer felt Pahal did not meet the second bullet.

Under the FMLA, however, an adverse employment decision is an action that “alters the employee’s compensation, terms, conditions, or privileges of employment, deprives him or her of employment opportunities, or adversely affects his or her status as an employee.” Therefore, the court found Pahal’s pay reduction was an actual, concrete, and particularized injury, and it was related to his FMLA leave.

The employer also tried to argue that it replaced Pahal’s wages later, so no injury occurred, but employers may not “cure” alleged FMLA violations by returning wages that they previously withheld.

The court ruled that the employer may have retaliated against Pahal for taking FMLA leave, and the case was allowed to proceed.

Employees may raise interference and/or retaliation claims. Employers who take adverse actions against employees based on FMLA leave risk having to defend their actions in court.

Pontes v. Rowan University, Third Circuit Court of Appeals, No. 20-2645, September 13, 2021.