FMLA FAQ: Can We Terminate an Employee for Working a Second Job While on FMLA Leave?

By Jeff Nowak on September 18, 2014 - FMLA Insights

Q: One of our employees has taken FMLA leave for anxiety attacks. Recently, we found out that she is working a similar job for another employer at precisely the same time she should be working for us. Can we deny her the right to return and terminate her employment because of this leave abuse?

A: Your ability to take disciplinary action — including termination — likely will hinge upon one critical detail: Do you have a policy that prohibits outside employment and do you apply it consistently for anyone on a leave of absence?

The FMLA regulations contemplate this precise scenario:

If the employer has a uniformly-applied policy governing outside or supplemental employment, such a policy may continue to apply to an employee while on FMLA leave. An employer which does not have such a policy may not deny benefits to which an employee is entitled under FMLA on this basis unless the FMLA leave was fraudulently obtained. . . . 29 CFR 825.216(e) (my emphasis).

The courts generally have followed this regulation. For example, in Howard v. Millard Refrigerated Servs., the employer learned that the plaintiff was working at another company during the time he was on FMLA leave, a detail that was confirmed after an internal investigation. The court dismissed the employee’s FMLA claims, largely because the employer maintained a consistently-applied policy prohibiting employees from working while they were on a leave of absence.

The same held true in Pharakhone v. Nissan North America, where an employee took FMLA leave and immediately began working at his wife’s restaurant [he must have really liked the food?]. At the time, the employer enforced a policy prohibiting “unauthorized work for personal gain while on leave,” and his supervisor advised him that he was not allowed to work there during his FMLA leave. Because of this employer’s precautions, the employee’s FMLA claims were dismissed here, too.

Where there is no policy in place, however, an employee on FMLA leave arguably can maintain a second job, even if the work is similar to her current position. Take, for example, the employee in Stekloff v. St. John’s Mercy Health Sys., where the court determined that the employee only had to show that she was unable to work in her current job because of a serious health condition in order to qualify for FMLA leave. The fact that she worked a very similar position elsewhere and was able to to attend orientation within one day of taking FMLA leave did not matter to this court.

Insights for Employers

A couple of points to keep in mind:

1. If you want to prohibit an employee from working a second job and tighten up your FMLA compliance, it is critical that you maintain a uniformly-applied no-moonlighting policy that prohibits work while on FMLA leave and any other form of leave. Additionally, the policy should be distributed and available to all employees, and they should be reminded of it when leave begins.

2. Secondly, if you learn that an employee is working another job while on FMLA leave, you should:

Confirm these facts and inform the employee that you are aware of the second job
Confirm the employee’s acknowledgement and agreement that your policies prohibit moonlighting
Determine the duties of the other job and compare to his regular job
Compare the job duties with any medical restrictions as outlined on the medical certification form. Particularly where you do not have a no-moonlighting policy, be sure to investigate the relationship between the two jobs. In the case of anxiety, for example (as in the question above), might the employee have an argument that he/she cannot perform the work of a particularly stressful job (e.g., emergency room doc) but can work a desk job in an office where split second decisions do not have to be made?
Investigate fully and discuss with your *favorite* employment attorney before taking action