Seventh Circuit Clarifies Limits on Employer Paid‑Leave Substitution Policies: Unpaid FMLA Leave Cannot Be Denied or Penalized for Accounting Errors

Introduction

In Dyamond Davis and Antionette Burns v. Illinois Department of Human Services, No. 22-2118 (7th Cir. May 14, 2025), the Seventh Circuit addressed two significant Family and Medical Leave Act (FMLA) questions:

Standing at summary judgment for an employee asserting FMLA interference without evidentiary support; and
The boundary between an employer’s “usual and customary” procedural requirements for requesting leave (29 C.F.R. § 825.302(d)) and the employer’s rules for substituting paid leave during FMLA leave (29 C.F.R. § 825.207(a)).

The case arose from the Shapiro Development Center, a facility operated by the Illinois Department of Human Services (DHS). Dyamond Davis, a pregnant employee experiencing morning sickness, left mid‑shift and sought to cover the absence with paid leave. Having miscalculated her accrued paid time by thirty minutes, she was charged with an “unauthorized absence,” which—under Shapiro’s progressive discipline policy—ultimately led to her termination. Antionette Burns alleged similar interference but supplied no record evidence.

The district court dismissed Burns for lack of standing and granted summary judgment to DHS on Davis’s interference claim. The Seventh Circuit affirmed the dismissal of Burns, but reversed summary judgment for DHS as to Davis, remanding for trial. Along the way, the court announced a consequential clarification: when the employer’s complaint is about compliance with paid‑leave substitution procedures, the employee still “remains entitled to take unpaid FMLA leave” (29 C.F.R. § 825.207(a)), and the employer may not convert protected leave into an “unauthorized” absence or use FMLA leave as a negative factor in discipline (29 C.F.R. § 825.220(c)). Judge Kirsch concurred separately to emphasize that whether a policy is a “requesting leave” requirement (§ 825.302(d)) or a “paid‑leave substitution” requirement (§ 825.207(a)) may itself be a fact question for the jury.

Summary of the Opinion

Burns’s standing: Affirmed dismissal without prejudice. At summary judgment, Burns offered no affidavits, testimony, timesheets, or certifications to show injury-in-fact traceable to DHS. Class allegations could not substitute for individual standing because no class had been certified.
Davis’s FMLA interference claim: Reversed summary judgment and remanded. Genuine disputes of material fact existed on:
- Whether Davis was entitled to FMLA leave for morning sickness on the day in question;
- Whether DHS properly handled medical certification (including whether it should have sought clarification or cure under 29 C.F.R. § 825.305(c));
- Whether Davis gave sufficient notice under the FMLA and Shapiro’s procedures; and
- Whether DHS unlawfully treated a paid‑leave substitution error as grounds to deny unpaid FMLA leave and to discipline her.
Key legal clarification: If an employer’s policy concerns substitution of paid leave during FMLA leave, § 825.207(a) governs, and—even if the employee fails to meet the employer’s paid‑leave procedures—the employee still “remains entitled to take unpaid FMLA leave.” Treating the time as “unauthorized” and disciplining the employee may constitute impermissible interference and use of FMLA as a negative factor in discipline (29 C.F.R. § 825.220(c)).
Pregnancy and morning sickness: The court reiterated that pregnancy and pregnancy‑related conditions, including morning sickness, qualify as FMLA “serious health conditions,” and intermittent absences for morning sickness can be protected even without a doctor visit that day (29 C.F.R. §§ 825.115(b), 825.115(f), 825.120(a)(4)).
Concurrence (Kirsch, J.): Agreed with remand but would allow a jury to decide whether Shapiro’s paid‑leave substitution rules are part of the “usual and customary” requirements for “requesting leave” under § 825.302(d) or are instead “additional” payment‑related requirements under § 825.207(a).

Detailed Analysis

I. FMLA Framework Applied by the Court

Entitlement to leave: Eligible employees may take up to 12 weeks of leave for a “serious health condition” that renders them unable to perform job functions (29 U.S.C. § 2612(a)(1)(D)). Pregnancy and prenatal care qualify; absences for morning sickness are protected even without a doctor visit on that specific day (29 U.S.C. § 2611(11)(B); 29 C.F.R. §§ 825.115(b), 825.115(f), 825.120(a)(4)).
Medical certification: Employers may require certification supporting leave, including intermittent leave for conditions with unforeseeable episodes (29 U.S.C. § 2613(a); 29 C.F.R. § 825.306(a)(7)). If a certification is “incomplete” or “insufficient,” the employer must specify deficiencies in writing and allow seven days to cure (29 C.F.R. § 825.305(c)).
Notice: Employees need only convey a qualifying reason; they need not invoke the FMLA by name (29 C.F.R. § 825.301(b)). Employers may require adherence to usual call‑off procedures when requesting leave (29 C.F.R. §§ 825.302(d), 825.303(c)). Failure to follow those procedures, absent unusual circumstances, can delay or deny FMLA leave.
Paid‑leave substitution: The FMLA is generally unpaid, but employees may substitute accrued paid leave, and employers may require substitution. Critically, if the employee does not comply with paid‑leave rules, she “is not entitled to substitute accrued paid leave, but … remains entitled to take unpaid FMLA leave” (29 C.F.R. § 825.207(a)). Employers must also notify employees of the right to unpaid FMLA if paid‑leave conditions are unmet (29 C.F.R. § 825.300(c)(iii)).
No negative factor: Employers may not use the taking of FMLA leave as a negative factor in discipline (29 C.F.R. § 825.220(c)).

II. Precedents Cited and Their Influence

Hansen v. Fincantieri Marine Group, LLC, 763 F.3d 832 (7th Cir. 2014):
The employer relied on frequency/duration estimates in a certification to terminate an employee whose absences slightly exceeded those estimates. The Seventh Circuit rejected a rigid reliance on estimates, emphasizing that certifications are just that—estimates—and that reasonable variance does not automatically disqualify FMLA coverage. Hansen supports the majority’s view that Davis’s entitlement to intermittent leave was not limited by the certification’s checkbox answer and that DHS should have sought clarification if it believed the certification was incomplete as to morning sickness.
Fritz v. Phillips Service Industries, Inc., 555 F. Supp. 2d 820 (E.D. Mich. 2008):
Cited approvingly in Hansen. The absence of a certification expressly providing for additional leave did not equal an explicit denial of leave. The employer, on notice of an ongoing serious health condition, had a duty to inquire further. Here, DHS knew Davis suffered pregnancy-related morning sickness; the majority draws from Fritz to fault DHS for not seeking supplemental information when it approved leave without addressing morning sickness.
Stoops v. One Call Communications, Inc., 141 F.3d 309 (7th Cir. 1998):
Distinguished. In Stoops, the certification affirmatively stated no intermittent leave or reduced schedule was needed, and the employee knew the employer was relying on that “negative certification.” In Davis’s case, the certification and record reflected pregnancy and ongoing need for leave (appointments and postpartum), and DHS knew of morning sickness. Thus, Stoops does not control.
Notice/Procedure cases:
- Nicholson v. Pulte Homes Corp., 690 F.3d 819 (7th Cir. 2012): Employers may enforce reasonable notice rules for requesting leave; failure can justify delay or denial.
- Brown v. Automotive Components Holdings, LLC, 622 F.3d 685 (7th Cir. 2010) and Lewis v. Holsum of Fort Wayne, Inc., 278 F.3d 706 (7th Cir. 2002): Uphold enforcement of employer procedures for requesting leave.
- Valdivia v. Township High School District 214, 942 F.3d 395 (7th Cir. 2019): Adequacy of notice is fact intensive and often for the jury.
These authorities underscore that while employers can insist on “usual and customary” procedures when leave is requested, that authority does not extend to denying unpaid FMLA leave based solely on paid‑leave substitution missteps once leave is otherwise approved or warranted.
Standing authorities:
- Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) and Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992): Injury-in-fact, traceability, redressability; evidentiary requirements at summary judgment.
- Kohen v. Pacific Investment Management Co., 571 F.3d 672 (7th Cir. 2009): Named plaintiffs must have individual standing independent of class allegations.
These cases support the affirmance of Burns’s dismissal for want of evidence of injury at the summary judgment stage.

III. The Court’s Legal Reasoning

A. Burns’s Standing

The Seventh Circuit affirmed the dismissal without prejudice. At the summary judgment stage, Burns could not rest on allegations; she needed “specific facts” via affidavit or other evidence showing that DHS misclassified her FMLA leave or disciplined her on that basis. She provided none—not even proof that she had FMLA approval—so she lacked an injury-in-fact. Class allegations could not cure the deficiency because no class was certified.

B. Davis’s Entitlement to FMLA Leave for Morning Sickness

The court emphasized regulations specifically recognizing pregnancy and pregnancy‑related conditions—including morning sickness—as FMLA-qualifying serious health conditions. DHS knew, before approving Davis’s FMLA leave, that she had pregnancy-related morning sickness causing absences. While the doctor’s certification indicated “no” to episodic flare-ups preventing job functions, that checkbox did not negate DHS’s knowledge of intermittent morning sickness and the regulations directly protecting such absences. Under Hansen and Fritz, the certification’s estimates and omissions could not be treated as categorical limits; instead, DHS should have sought clarification or a cure under § 825.305(c) if it believed the certification did not address morning sickness adequately.

C. Sufficiency of Notice

A supervisor testified that Davis said she was ill due to pregnancy and wanted to use FMLA leave before leaving work on May 12. The court deemed this sufficient to create a jury question regarding notice adequacy under the FMLA and Shapiro’s “call‑off” procedures. Adequacy of notice is a classic fact question (Valdivia).

D. Paid‑Leave Substitution vs. Requesting Leave: The Regulatory Divide

This is the opinion’s most consequential clarification. The court drew a bright line between:

§ 825.302(d) (requesting leave): Employers may require adherence to usual notice and procedures when an employee requests time off for FMLA reasons. Noncompliance may result in delayed or denied FMLA leave.
§ 825.207(a) (paid‑leave substitution during FMLA leave): Employers may require employees to substitute accrued paid leave during FMLA leave and may impose procedures for doing so, but only “in connection with the receipt” of paid benefits. If the employee fails to meet these paid‑leave conditions, she simply loses pay; she nonetheless “remains entitled to take unpaid FMLA leave.”

Applying § 825.207(a), the court concluded a jury could find that DHS unlawfully counted Davis’s 30 minutes as “unauthorized” rather than unpaid FMLA leave, and then used that designation to terminate her. Doing so risks violating § 825.207(a) and also § 825.220(c)’s prohibition on using FMLA leave as a negative factor in discipline.

The court also noted two textual problems with Shapiro’s written policies:

Language suggesting that if an employee lacks sufficient accrued paid time, “the absence will remain Unexcused (UA) whether or not it is an FMLA related absence,” appears inconsistent with § 825.207(a)’s guarantee that unpaid FMLA leave remains available even if paid‑leave substitution conditions are unmet.
The FMLA Reminders did not inform employees, as required by § 825.300(c)(iii), that they still have a right to unpaid FMLA leave if they do not meet the conditions for paid leave.

The majority further highlighted fact disputes about whether Shapiro consistently enforced its substitution policy, whether Davis’s error was a “repeat offense,” and whether supervisors corrected similar misapplications on other dates—all matters bearing on interference and pretext.

E. The Concurrence’s Caution

Judge Kirsch agreed that remand is necessary but emphasized that deciding whether § 825.302(d) or § 825.207(a) governs depends on how the employer’s policies actually function. If the paid‑leave substitution rules are part of the employer’s “usual and customary” procedures for requesting leave, § 825.302(d) could apply, potentially permitting denial of FMLA leave for noncompliance. If, instead, those rules address only how an employee gets paid once leave is otherwise requested and approved, § 825.207(a) controls, and the employee cannot be denied unpaid FMLA leave for a substitution error. The present record, in Judge Kirsch’s view, did not conclusively establish which framework applied; a jury should decide.

Impact and Practical Implications

A. For Employers and HR Professionals

Policy design and language: Review FMLA and attendance policies for any provisions that:
- Transform FMLA‑qualifying absences into “unauthorized” due to paid‑leave accounting errors; or
- Fail to inform employees of their entitlement to unpaid FMLA leave when paid‑leave conditions are unmet (29 C.F.R. § 825.300(c)(iii)).
Discipline practices: Do not count time that should be treated as unpaid FMLA leave as an attendance violation, and do not use FMLA leave as a negative factor (29 C.F.R. § 825.220(c)). “Point” or “occurrence” systems must exclude protected FMLA time.
Certification management: If a certification appears incomplete or inconsistent with known facts (e.g., known morning sickness but a “no flare-ups” checkbox), promptly issue a written notice identifying deficiencies and provide seven days to cure (29 C.F.R. § 825.305(c)).
Notice procedures vs. payment rules: Train managers to distinguish between:
- Procedures for requesting leave (call-in, who to notify, when)—enforceable under § 825.302(d); and
- Paid‑leave substitution mechanics (how to code timesheets, sequencing of paid accruals)—governed by § 825.207(a), which cannot erase the underlying right to unpaid FMLA leave.
Supervisor training: When an employee says, “I’m pregnant and need to go home; I want to use FMLA,” treat that as a request triggering FMLA processes, even if a formal approval is pending. Document these communications.
Consistency and corrections: Apply policies consistently, and correct timekeeping errors when identified. Inconsistency can create triable issues of interference or pretext.

B. For Employees and Counsel

State a qualifying reason: You need not say “FMLA,” but tie the absence to a qualifying reason (e.g., pregnancy-related morning sickness).
Know your rights: Even if you misapply paid time or lack sufficient accruals, you may still be entitled to unpaid FMLA leave. An employer cannot lawfully turn protected time into an “unauthorized absence” solely because of a substitution error.
Certification follow‑through: Keep medical certifications current. If the employer asks for clarification or a cure, respond within the seven-day window.
Preserve evidence: At litigation, standing and merits both depend on evidence—keep copies of certifications, approvals, timesheets, and communications.

C. For Courts and Future Litigation

Doctrinal clarification: This decision sharpens the doctrinal line between request‑procedures (§ 825.302(d)) and payment‑conditions (§ 825.207(a)). Misclassifying a payment-rule as a request-rule can unlawfully deprive employees of unpaid FMLA leave.
Pregnancy accommodations via FMLA: The opinion reiterates that morning sickness is independently recognized as an FMLA‑qualifying condition, even absent a doctor visit on the day of absence.
Evidentiary rigor for standing: Plaintiffs advancing FMLA claims at summary judgment must put forward concrete proof of injury; class allegations do not substitute for evidence.

Complex Concepts Simplified

FMLA interference: When an employer denies, interferes with, or restrains the exercise of FMLA rights (such as counting protected leave as an absence to discipline an employee).
Serious health condition: A health issue requiring continuing treatment. Pregnancy and pregnancy‑related conditions, including morning sickness, qualify.
Intermittent leave: Leave taken in separate blocks of time due to a single qualifying reason (e.g., sporadic morning sickness episodes).
Medical certification (complete and sufficient): A doctor’s form substantiating the need for FMLA leave. If vague or incomplete, the employer must specify the deficiencies in writing and allow seven days to cure.
Requesting leave vs. paid‑leave substitution: Requesting leave is how you ask for time off (governed by § 825.302(d)). Paid‑leave substitution is how your accrued paid time runs concurrently with FMLA leave (governed by § 825.207(a)). Failure on the latter cannot erase the right to unpaid FMLA leave.
Negative certification: A medical certification affirmatively stating that intermittent leave or a reduced schedule is not medically necessary. Employers may rely on it unless they know facts suggesting otherwise; here, DHS knew about morning sickness.
Negative factor rule: Employers cannot consider the taking of FMLA leave as a negative factor in employment decisions, including discipline.

Unresolved Questions and On Remand

Policy characterization: Is Shapiro’s paid‑leave substitution policy part of its “usual and customary” notice and procedural requirements for requesting leave (§ 825.302(d)) or an “additional” pay‑related requirement (§ 825.207(a))? The concurrence flags this as a factual question for the jury.
Certification adequacy: Was Dr. Mahoney’s certification “incomplete or insufficient” with respect to morning sickness, triggering DHS’s duty to seek a cure? Did DHS fulfill its obligations?
Notice compliance: Did Davis’s mid‑shift statement to her supervisor satisfy both FMLA notice and Shapiro’s internal call‑off policy?
Policy application and consistency: Was Davis’s substitution error a repeat offense? Did Shapiro correct similar errors for Davis or others? Were policies uniformly enforced?
Causation and remedy: If time should have been coded as unpaid FMLA leave, would the “unauthorized absence” and the downstream termination have occurred?

Conclusion

Davis v. Illinois Department of Human Services is a significant FMLA decision that clarifies three key principles. First, pregnancy‑related morning sickness is squarely protected, and employers cannot rigidly rely on certification estimates or checkboxes to negate known, protected intermittent needs without seeking clarification. Second, employers must distinguish between procedural requirements for requesting leave (which can be enforced under § 825.302(d)) and paid‑leave substitution conditions (which, under § 825.207(a), cannot be used to deny unpaid FMLA leave or to penalize employees with “unauthorized” absences). Third, at summary judgment, plaintiffs must come forward with concrete evidence to establish standing.

For employers, the opinion is a strong reminder to align policy language and practice with the FMLA’s structure: enforce reasonable request procedures, but do not weaponize paid‑leave accounting against protected unpaid FMLA time. For employees, it underscores that the right to unpaid FMLA leave endures even when paid‑leave substitution rules are not perfectly followed. With material factual disputes identified—and with an important concurrence emphasizing the fact‑sensitivity of policy characterization—the case returns to the district court, where a jury will resolve the disputes under the clarified legal framework.