Quick Hits

• The Tenth Circuit affirmed the lower court’s application of the economic reality test to determine whether an individual qualifies as an “employer” and thus may be subject to individual liability under the FMLA.
• In doing so, the Tenth Circuit joined the Second, Third, and Eighth Circuits in holding that the FMLA permits claims for individual liability.
• Although the Tenth Circuit concluded that a supervisor can be subject to liability under the FMLA, plaintiffs will have difficulty establishing individual liability under the economic reality test.

Summary

The FMLA permits eligible employees to take leave for serious health conditions and prohibits employers from retaliating against employees for doing so. The FMLA defines “employer” to “include[] … any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer.”

In Walkingstick Dixon, a former state university employee brought sex and race discrimination and retaliation claims under Title VII of the Civil Rights Act of 1964, as well as a retaliation claim under the FMLA against her former supervisor. The lower court granted summary judgment for the employee’s supervisor on the employee’s FMLA retaliation claim. In doing so, the lower court noted that while the Tenth Circuit had not yet decided whether individuals could be liable under the FMLA, the statute’s plain language and the consensus of Tenth Circuit lower courts supported individual liability so long as an employee could “affirmatively establish” that a supervisor was an employer under the economic reality test.

The economic reality test asks whether an alleged employer possesses the power to control the individual in question. In applying the economic reality test, the lower court recognized that the supervisor had input into the termination decision and supervised and controlled the employee’s work schedule as well as the conditions of her employment. However, the court concluded that the supervisor did not satisfy the FMLA’s definition of “employer” because he could not have discharged the employee on his own, did not maintain the employee’s employment records, and could not approve or deny her FMLA leave requests.

The Tenth Circuit affirmed summary judgment in favor of the former supervisor. In reaching its conclusion, the Tenth Circuit held that (1) the FMLA permits individual liability and (2) the economic reality test applies to determine whether an individual qualifies as an FMLA employer.

Because the employee challenged only whether the economic reality test applied and not whether the lower court properly applied the economic reality test, the Tenth Circuit affirmed summary judgment in favor of the former supervisor without addressing the district court’s application of the test.

The Tenth Circuit’s decision is consistent with other appellate courts. For example, the Second Circuit held that a human resources manager could be held liable as an employer under the FMLA.

Key Takeaways

Employers may want to prepare for an increase in FMLA retaliation claims against individual defendants in the wake of the Tenth Circuit’s Walkingstick Dixon decision. However, as the district court’s decision illustrates, employees likely will have a difficult time proving that the economic realities of the supervisor relationship establish that the supervisor is a statutory employer under the FMLA.