Thanks for contributions from our Directors and Product Compliance Counsel Lana Rupprecht and Shelby Felton.

"In order to maintain the integrity of the FMLA, employers must be able to investigate and address plausible allegations that employees have been dishonest in their medical leave claims.

So says the federal 4th Circuit Court of Appeals in Adkins v. CSX (4th Cir. June 16, 2023).

I love this case! The outrageous facts energize my soapbox instincts! The crux of the case is the employer's termination of dozens of employees because of its honest belief that the employees had engaged in FMLA fraud. But what really gets my juices flowing are the audacious leave claims of 67 employees that gave rise to those terminations. Let's see what one employer did about that and what we can learn from the case.

The Facts: 67 Soft-Tissue Injuries

In 2017 CSX Transportation, Inc. (CSX) issued notices of upcoming furloughs to employees at one of its facilities. Under CSX's benefit plans, if an employee were furloughed while on medical leave the employee would receive health and welfare benefits for up to 2 years. Otherwise, a furloughed employee would receive such benefits for only 4 months.

Guess what! Over the next few weeks, 67 employees at the CSX facility bombarded the company with requests for medical leave due to minor off-duty soft-tissue injuries. The requests were supported by union-approved medical forms, each signed by one of two chiropractors. The forms were similar in content, described generalized minor conditions such as sprains or muscle spasms, provided no individualized assessments, and called for leaves of 8 weeks or more.

As these leave requests rolled in (14 in a single day!) CSX's medical officer became suspicious that the leaves were being requested fraudulently in an effort to extend the employees' health and welfare benefits. In his lengthy career he had never seen so many markedly similar medical forms in such a short time. Further, in his medical opinion, the alleged injuries should have taken a few days to a week at most to heal, so the requests for 8 weeks or more struck him as "extraordinary."

The Investigation: Hearings Galore!

The CSX medical officer reported his suspicion to the company's Labor Relations team which reviewed the information and decided, based upon internal policy, to pursue charges of dishonesty and fraud against the employees involved. The employees' collective bargaining agreement required a formal investigation. A hearing was held on each charge. Each employee, at his election, could appear at his hearing, be represented by a union representative, present evidence, and cross-examine company witnesses.

The hearings were transcribed and the full record was examined by the Labor Relations team, which made its recommendation to a CSX vice president. In collaboration with the Labor Relations team, the vice president made the decision to terminate the individuals' employment for dishonesty and violations of the company's code of ethics. Appeals to the next leave tribunal resulted in upholding most of the termination decisions, although it reinstated a few employees.

The Lawsuit: Honest Belief, Pretext, and FMLA Processes

Fifty-eight of the terminated employees filed a lawsuit in federal district court alleging, among other claims, interference with their FMLA rights. The court ruled in favor of CSX and the employees appealed to the Fourth Circuit. In defense of the FMLA claims, the company asserted that it terminated the employees because it had an honest belief that the employees were seeking leave for an improper purpose – to extend their benefits entitlement for fraudulent reasons.

We've addressed the "honest belief" defense before. If you missed it, check out our presentation at the DMEC 2023 Compliance conference and the subsequent virtual webinar (repeated by popular demand!), "Serious Health Condition or Serious Vacation?" available here: Disability Management Employer Coalition's (DMEC) Virtual Compliance Conference.

We also wrote about an honest belief FMLA case in this blog post.

The employees argued that the allegations of fraud were a pretext for some other unidentified motive for the employees' terminations. The court was having none of it. "[T]he pattern of similar leave requests in the context of the furlough notices was certainly ample evidence to raise legitimate suspicions of abuse . . . " The employees had the opportunity to provide additional evidence to support their leave claims during the disciplinary and hearing process but none of them did. The court noted a common judicial observation:

"When an employer gives a legitimate, nondiscriminatory reason for terminating an employee, 'it is not our province to decide whether the reason was wise, fair, or even correct' so long as it was the genuine reason for the employment decision."

The employees also argued that CSX should not be able to terminate them for FMLA abuse when the company did not pursue all its possible FMLA remedies relating to the suspicious medical forms. For example, an employer could require a second opinion from a different medical provider or seek clarification from the original provider. But the court recognized that these are permissive steps and are not required before an employer can act on an honest belief that an employee has engaged in FMLA fraud.

What the Employer Did Right

CSX did several things right in this case.

Through the formal union hearing procedure, the employees had a chance to tell their side of the story and present additional information that might be relevant.
The termination decision was made by someone removed from the direct situation (for example, not the employees' managers or the medical officer) and in consultation with the company's Labor Relations team, and the appeal process provided another layer of protection for the employees.
The employer let the employees take the requested leaves and continued to provide health benefits during the pendency of the hearings and decision-making process. That way, if the result was to uphold an employee's right to a leave of absence, the company had not caused any harm or prejudice by denying the leave.

If your workforce is not unionized, you can still learn from the lessons here.

Be sure an employee suspected of FMLA abuse has the opportunity to tell his or her side of the story and present additional documentation or other support for the requested FMLA leave.
If you are considering disciplinary action, involve more than one decisionmaker, including at least one person not directly managing the employee or involved in the situation.
And usually, you'll want to let the leave proceed while things are up in the air.

What More Can an Employer Do in This Situation?

The facts in this case are pretty stark. In our years of FMLA leave management, we have seen instances of multiple similar medical certifications from a single provider, but not to this brazen extent! So what else can you do if faced with this situation, even on a smaller scale? Read to the end for my favorite bit of guidance!

Even 2 suspiciously similar certifications from a single provider should not be ignored. Word spreads among a workforce and the result could be more of the same from additional employees. Maybe 67 of them?
Consider whether there are any obvious motives for multiple employees faking or exaggerating a serious health condition to get FMLA leave. In this case the CSX employees would receive better continued health benefits if furloughed while on medical leave. Other incentives can lead employees to FMLA abuse, such as seeking intermittent leave to avoid mandatory overtime. We have definitely seen this, where multiple employees suddenly cannot work more than 8 hours per day due to a health condition.
Review the certifications carefully to ensure you have all the information you are entitled to, such as dates of treatment (remember the 7 days/30 days rules!), medical facts, and the essential functions the employee cannot perform because of the serious health condition. A doctor who just fills in the form with what the employee wants is unlikely to provide much detail or specificity. And yes, that happens. The provider is not necessarily intending to provide false information (well, 67 certs between 2 chiropractors might lead to a different conclusion . . . ) so much as providers just really don't understand the FMLA.
Consider requiring second/third opinions when suspiciously similar certifications from the same provider cause you to doubt the validity of the certs. This was clearly not feasible for CSX (Ye gads! Can you imagine the cost?) but the expense is well worth it on a smaller scale – you get confirmation of either the employee's right to leave or your doubts about the certification. And again, you have sent a message to the workforce that certifications from that provider will be carefully reviewed.
Your close review of the certifications should include checking whether the health care provider who signed them is attesting to a medical condition within their area of expertise. You probably have reason to doubt the validity of a cert for a heart condition from a podiatrist! And that can support either a second opinion or, better yet, the right to require the employee to provide a new certification from a doctor in the correct field.
And now for my favorite tip – drumroll please! The root of the problem in the CSX case was 2 chiropractors attesting to soft-tissue injuries. Now, we won't pretend to understand exactly what chiropractors can and cannot do and a lot of people swear by them, but heed this. The FMLA regulations require an employer to accept a certification from a chiropractor to support an FMLA medical leave request only for "treatment consisting of manual manipulation of the spine to correct a subluxation as demonstrated by X-ray to exist." 29 C.F.R. § 825.125(b)(1).

So if you get a cert from a chiropractor, even for a single FMLA claim, take a look at the nature of the employee's health condition. Is it subluxation of the spine? If so, is there an X-ray to support that diagnosis? You can ask those questions – and get the answers in writing – but don't ask for the actual X-ray. What would you do with that anyway??? In the CSX case, then, for FMLA purposes, the employer could have rejected all the certifications from the 2 chiropractors because they were not for the only type of health condition a chiropractor can certify to support an FMLA claim.

Reliance Matrix Can Help!

At Reliance Matrix we administer FMLA and similar state leaves for hundreds of employers and thousands of employees every year. Our leave specialists are well-trained on how to review health care provider certifications thoroughly to ensure we have all the information to which our employer clients are entitled, how to follow up if anything is missing or unclear, and how to spot patterns that might indicate misuse. For more information about our services, contact your Reliance Matrix account manager or send a message to ping@matrixcos.com.

Reliance Matrix is a branding name for Reliance Standard Life Insurance Company and its affiliated insurance and absence management services companies. Insurance products are provided by Reliance Standard Life Insurance Company (Home Office Schaumburg, IL), which is licensed in all states (except New York), the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam, First Reliance Standard Life Insurance Company (Home Office New York, NY), which is licensed in New York and Delaware; Standard Security Life Insurance Company of New York (Home Office New York, NY), which is licensed in all states. Absence services are provided by Matrix Absence Management, Inc. (Home Office Phoenix, AZ).

Through its insurance and administrative services entities, Reliance Matrix offers integrated leave management services involving the FMLA, state-mandated paid family and medical leave and accommodation solutions. Product features and availability may vary by state. For more information, please contact your Reliance Matrix account manager, or reach us at ping@matrixcos.com.