“No Good Deed Goes Unpunished” – The Consequences of Attendance and Point Reduction Policies for Employers

In most industries, it is common for employers to implement no-fault attendance policies to discipline employees for unexcused tardiness or absences that adversely impact the productivity and success of the business. To complement these policies, some employers also allow employees to reduce their absences through “point reduction schedules.” Generally, these schedules reward employees for maintaining perfect attendance for a certain amount of time (e.g., 30 days) by reducing the number of unexcused absences the employees have attained. Given the fact that employers have no legal obligation to provide this type of benefit, wouldn’t you think that such a generous policy was a win for everyone involved? Not only do employees have the opportunity to correct, and possibly eliminate, a poor attendance record, but employers are more likely to have punctual employees who better understand the importance of their presence at work. If only it were that simple.                                                                                   

Although employers likely intend for no-fault attendance policies and point reduction schedules to be black and white, employment statutes such as the Family and Medical Leave Act (FMLA) can easily bring them into a more complicated gray area in which their validity is questionable. The Sixth Circuit could not have illustrated this more clearly than it did in its opinion in Dyer v. Ventra Sandusky, LLC earlier this month.

Background

Jerremy Dyer worked as a technician for Ventra Sandusky, an automotive supplier with a manufacturing facility in Sandusky, Ohio. As a member of the United Auto Workers, Local 1216, Dyer was subject to a collective bargaining agreement between the union and Ventra Sandusky. That agreement included a no-fault attendance policy in which employees received between 0.5 and 1.5 points for absences, depending on whether the employee called in to report the absence and whether the employee was absent for an entire shift or only part of it. If employees accumulated 11 or more points, they would be terminated. Under the policy, certain absences were expressly excluded from the point-accumulation system, including FMLA leave.

In addition to the no-fault attendance policy, Ventra Sandusky implemented an “Attendance Point Reduction Schedule” that allowed employees to reduce their number of accrued absence points. Specifically, an employee who had perfect attendance for 30 days would have their total absence points reduced by one point. While time off for vacations, bereavement, jury duty, military duty, union leave, and holidays counted toward the 30 days, thereby allowing an employee to remain eligible for the perfect-attendance point reduction, unpaid leave, including FMLA and other disability leave, did not. Consequently, these excused absences “reset” an employee’s 30-day perfect attendance clock.

Beginning in 2013, Dyer used intermittent FMLA leave due to migraine headaches that prevented him from working. Ventra Sandusky approved all of Dyer’s requests for FMLA leave, and Dyer never received points for using FMLA leave. Nevertheless, Ventra Sandusky terminated Dyer on June 30, 2016, for accumulating 12 points under the no-fault attendance policy.

After his termination, Dyer sued Ventra Sandusky for denying him FMLA benefits to which he was entitled in violation of the FMLA. When the district court granted Ventra Sandusky summary judgment, Dyer appealed to the Sixth Circuit.

Sixth Circuit Reverses Summary Judgment Regarding FMLA Interference Claim

On appeal, the Sixth Circuit reversed the district court’s ruling in favor of Ventra Sandusky, holding that a jury could find that “Ventra Sandusky’s no-fault point-reduction scheme interfered with Dyer’s rights to take FMLA leave and be restored to an equivalent position with equivalent benefits and other terms and conditions of employment upon return to work.”

In assessing whether Ventra Sandusky denied Dyer FMLA benefits to which he was entitled, the Sixth Circuit explained that an employer who uses the taking of FMLA leave as a negative factor in employment actions, and/or denies a valuable term or condition of employment to an employee taking FMLA leave, interferes with an employee’s right to take that leave. Thus, the sole issue on appeal was whether Ventra Sandusky’s Attendance Point Reduction Schedule violated the FMLA by serving as a negative factor in its decision to terminate Dyer.

Ventra Sandusky initially argued that its no-fault attendance policy did not interfere with an employee’s right to FMLA leave because it treated FMLA leave the same as equivalent non-FMLA leave for the purpose of its Attendance Point Reduction Schedule. However, the Sixth Circuit agreed with Dyer, holding that “Resetting Dyer’s perfect-attendance clock every time he took FMLA leave effectively denied him the flexibility of the no-fault attendance policy that every other employee not taking FMLA leave enjoyed.” Although the Sixth Circuit recognized that Ventra Sandusky’s policy did not formally link point reduction to not taking FMLA leave, it stated that the practical result was the same for an employee such as Dyer who had to take frequent intermittent FMLA leave.

Focusing on the definition of benefit, Ventra Sandusky subsequently argued that until an employee reached the 30-day mark, he had accrued no benefit -- the benefit being the actual reduction of an absence point. As such, there could be no benefit to be restored upon an employee’s return to work.

The Sixth Circuit opposed this argument and specifically ruled that “point reduction [could] be viewed as an employment benefit, the accrual of which, like the accrual of other benefits of seniority, must be available to an employee upon return from leave.” Citing the FMLA (29 U.S.C. § 2614(a)(2)), the U.S. Department of Labor (DOL) regulations (29 C.F.R. § 825.215(d)(1)-(2)), and two opinions letters by the DOL (1999 and 2018), the Sixth Circuit reiterated that benefits accrued at the time an employee’s FMLA leave began must be available to the employee upon his return from leave. Because point reduction was a benefit that allowed employees to flexibly manage their absences and effectively awarded an additional excused absence, Dyer was entitled to the days of attendance he had accrued when his FMLA leave began and to continue accruing them in the same way.

After concluding that a jury could find that Ventra Sandusky interfered with Dyer’s right to FMLA leave, the Sixth Circuit addressed the district court’s holding that Ventra Sandusky’s policy did not violate the FMLA because “equivalent” non-FMLA leave also interrupted the 30-day window. The Sixth Circuit explained that there was a disputed issue of material fact as to what constituted “equivalent” leave and whether any equivalent leave statuses similarly reset the point-reduction clock. Quoting 29 C.F.R. § 825.220(c), the Sixth Court stated that the DOL regulations implied that equivalency turned on whether the leave was paid or unpaid. Because there was evidence in the record that active military leave and some forms of union leave were unpaid, but did not restart the 30-day point-reduction clock, there was a disputed issue of material fact regarding whether equivalent unpaid leave statuses were treated more favorably than FMLA leave.

Effectively Implementing Attendance and Point-Reduction Policies

Attendance and point-reduction policies are mutually beneficial strategies that promote collaborative and productive work environments, and employers should not be discouraged from implementing and consistently applying these policies in the workplace. However, employers should consider the impact of attendance policies and point-reduction schedules on the unique circumstances of individual employees before a court is compelled to do so. When evaluating attendance and point-reduction policies, be sure to consider the following:

• Are all absences treated similarly regardless of the length of the absence? Is an absence of four hours or less worth a half point? Is an absence of more than four hours worth one full point? If your attendance policy is based on a point system, determine how many points an absence is worth and explicitly communicate this to employees.
• Are all absences treated similarly regardless of the cause of the absence? Define which type of absences are excused and which are unexcused, as well as what procedures are necessary to convert an unexcused absence into an excused one (i.e., doctor’s note, record of jury duty, letter from attorney, etc.). Make sure that all FMLA and other protected disability leaves are documented and excused.
• Does your point-reduction policy treat all excused absences equally? If reducing unexcused absences is based on an employee’s perfect attendance, clearly communicate the number of consecutive days in which an employee must be present for his or her total number of absences/points to be reduced (e.g., 30, 60, or 90 days). Moreover, assess the type of leave that will not impact the employee’s attendance record. Is paid leave permissible (e.g., vacation, holidays, etc.), but unpaid leave (e.g., FMLA, short-term disability, etc.) is not? Are some unpaid leaves (e.g., military leave) permissible, but others (e.g., disability leave) are not? At the very least, all paid leave should be treated similarly, and all unpaid leave should be treated similarly. However, the safest measure is to treat all excused absences similarly, regardless of the cause, such that an employee’s attendance record is not impacted when he or she complies with your attendance policy and is legitimately excused from work.