Personal Liability under the FMLA: The HR Manager’s Assets May be At Risk

March 30, 2016

By Alex Jones

Both the Fair Labor Standards Act (“FLSA”) and Ohio’s anti-discrimination laws, O.R.C. § 4112 et. seq., allow employees to bring discrimination claims against not only their company but also their individual supervisors.  Traditionally, most other federal anti-discrimination laws, such as the Americans with Disabilities Act and the Age Discrimination in Employment Act, do not permit aggrieved employees to bring discrimination claims against their individual supervisors. However, one circuit court recently held that an HR manager may be held individually liable for violating the Family Medical Leave Act (“FMLA”).

In Cathleen Graziado v. Culinary Institute of America, Shayan Garrioch, a Second Circuit decision, Graziado was forced to take a leave of absence in order to tend to her two sons. Graziado sent documents to her HR Manager (Garrioch) requesting time off under the FMLA. Garrioch informed Graziado that she had not submitted the proper paperwork to qualify for leave under the FMLA. In a series of emails between the two, Garrioch refused to identify what other documentation was needed and continued to assert that Graziado’s FMLA paperwork was deficient.  During this time, Graziado was not able to come into work, and she was eventually terminated for allegedly abandoning her position.

Graziado subsequently filed suit against her employer and individually against Garrioch for violations of the FMLA. The district court dismissed Graziado’s claim against Garrioch, holding that Garrioch was not an “employer” under the FMLA, and therefore, could not be individually liable. The Second Circuit reversed, holding that Garrioch was an “employer” under the FMLA.

Under the FMLA, an employer is defined as “any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer.” The Court noted the definition of employer is the same under both the FMLA and the FLSA, and that for FLSA claims courts look to the “economic reality” of the employment situation to determine if an individual may be deemed an employer. When applying the “economic reality test” courts consider whether the alleged employer: (1) had the power to hire and fire the employee, (2) supervised and controlled the employee’s work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.  In the FMLA context, courts have examined whether the employer “controlled in whole or in part plaintiff’s rights under the FMLA.”

The Court found Garrioch controlled Graziado’s work hours and was a substantial influence in the decision to terminate Graziado. Therefore, the Court held a reasonable jury could conclude Garrioch was Graziado’s “employer.” In reversing the district court’s decision, the Second Circuit expanded FMLA liability to individual HR managers.

In light of this ruling, employers, supervisors, and HR personnel need to be diligent in any action they take concerning employee leave, as it may subject them to individual liability under a number of state and federal laws.