A company handbook can create a contractual relationship or, in the alternative, the enforcement of a promise made in the handbook that the employee has relied on to his detriment. As such, courts have barred employers from asserting the defense of FMLA ineligibility.
teven Peters worked for pharmaceutical manufacturer Gilead Sciences Inc. as a
therapeutic specialist. After Peters suffered work-related injuries to his neck
and right shoulder, Gilead twice approved his requests for Family and Medical
Leave Act leave. v
Gilead’s company handbook promised FMLA-like benefits of 12 weeks of leave for
employees who had worked at least 1,250 hours during the previous 12 months. The
handbook did not mention the FMLA requirement that employers have at least 50
employees within 75 miles of the work site, which Gilead did not satisfy.
One week before Peters was to return to work from FMLA leave, Gilead notified
him that he was not entitled to his same job and offered him a job that would
require him to move from Indiana to California. Peters did not respond and was
fired.
Peters sued Gilead in U.S. District Court for the Southern District of Indiana
under the FMLA, Title VII, the Americans With Disabilities Act and common-law
claims including promissory estoppel. The court granted summary judgment to
Gilead on all the claims.
On appeal, the Chicago-based 7th Circuit Court of Appeals reversed, holding that employers can offer FMLA-like benefits using eligibility requirements less restrictive than those in the FMLA, which is what Gilead did. Peters’ ineligibility for FMLA leave was irrelevant to the contract-based theories of liability, such as promissory estoppel, because Gilead’s employee handbook contained a leave policy which did not require that Peters work in a facility where 50 or more employees worked within 75 miles of that work site. Peters v. Gilead Sciences, Inc., 7th Cir. No. 06-4290 (7/14/08).
Impact: A company handbook can create a contractual relationship or, in the alternative, the enforcement of a promise made in the handbook that the employee has relied on to his detriment. As such, courts have barred employers from asserting the defense of FMLA ineligibility.
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