FOLWER v. KELLY SERVICES, INC., (D.Idaho 2002)

EDWARD LODGE, District Judge

Plaintiff Kevin Fowler brings this action against Kelly Services, Inc. and several Kelly employees (collectively "Kelly"), and Electronic Data Systems Corporation ("EDS") and several of its employees (collectively "EDS"), alleging that the termination of his employment assignment violates the Family and Medical Leave Act of 1993 ("FMLA" or the "Act"), 29 U.S.C. § 2601 et seq. Fowler also alleges state law claims based on misrepresentation and breach of good faith and fair dealing. In separate motions, both Kelly and EDS ask the Court to grant summary judgment in their favor on all Plaintiff's claims. The motions are now ripe. Having fully reviewed the record, the Court finds that the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding further delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, this matter shall be decided on the record before this Court without a hearing.

Background

Fowler was hired by Kelly on or about September 14, 2000. He was assigned to work at a call center, owned at the time by MCI WorldCom. Approximately one month into Fowler's assignment, EDS took control of the call center. Oversight of Fowler's performance at the call center was the responsibility of a Kelly "on-site coordinator," defendant Kerri Ruger, and EDS employees, including defendants Jared Hull, Jessie Gallegos, Bonnie Cole and EDS manager Teri Garvin. (Kelly's Statement of Undisputed Fact ¶ 4; EDS Statement of Undisputed Fact at 3-4).

Early on in his employment, Fowler gave notice that his wife, Susan, had cancer and he would "need to attend to her needs when required." (EDS Statement of Undisputed Fact at 3). During October and November of 2000, on several occasions Fowler informed Kelly and EDS that he would be arriving late, leaving early or not coming in at all to work because he needed to care for his wife. With regard to these absences, in only one instance did Fowler fill out and submit a Time Off Request Form. (Aff. of Fowler ¶ 19). According to Fowler, he was told by his supervisors "that given Susan's particular situation he did not need to fill out the form . . . [but just] call in if [he] needed time off." (Id.; see also Aff. of John C. Lynn, Ex. A, Deposition of Fowler at 125:20-127:23).

Near Christmas of 2000, Fowler was told by Susan's primary caregiver that her cancer was terminal and suggested that Fowler take family medical leave from work to care for Susan. (Aff. of Fowler at ¶ 12). Thereafter, Fowler asked a EDS supervisor about family medical leave and was directed to Kelly. (Aff. of John C. Lynn, Ex. A, Deposition of Fowler at 122:4-19; 138:20-139:7). Fowler then asked the Kelly supervisor for the paperwork he needed to fill out for family medical leave. (Id. at 142:19-25). Fowler was told that: "There's no paperwork to fill out. I just need a letter from your doctor stating the situation." (Id. at 143:1-3).

On or about January 3, 2001, Fowler provided to Kelly a letter from Susan's doctor which stated that Susan had cancer, that it was terminal, that she needed care at home "at this time" and that Fowler needed to provide that care. (Aff. of Fowler, Ex. B). Shortly after providing the doctor's letter to Kelly, Fowler confirmed with his EDS supervisors that they had received a copy of the letter and that everything was "ok" with regard to "FMLA" leave. (Aff. of John C. Lynn, Ex. A, Deposition of Fowler at 129:11-130:1; 137:10-138:19; 139:8-140:23; 143:6-144:18). On at least five other occasions, Fowler confirmed with his EDS supervisors that everything was "ok" with his family medical leave time off. (Id. at 128:14-130:1; 133:2-137:3). Fowler continued to take time off from work to care for Susan. (EDS Statement of Undisputed Fact at 7-8).

On January 23, 2001, Fowler did not go to work. He had told his supervisors the previous work day that he would be caring for Susan during the morning of January 23, 2001 and would return to work in the afternoon. (Aff. of Scott R. Learned, Ex. A, Deposition of Fowler at 171:6-172:10). In the afternoon of January 23, 2001, while Fowler was on his way to work, he called a EDS supervisor to inform him that he had decided not to come to work after all. (Id. at 177:6-178:16). In the meantime, EDS manager Teri Garvin became aware that Fowler was neither at work or at home during the early afternoon of January 23, 2001. Garvin conferred with Kelly supervisor Kerri Ruger, and then Garvin asked Kelly to end Fowler's contract. (Aff. of John C. Lynn, Ex. D, Deposition of Garvin at 97:11-98:25). Ruger called Fowler's wife at home and told her that Fowler's assignment had been terminated.

Subsequently, Fowler brought this action against the named Defendants. Kelly and EDS move for summary judgment on all claims. Summary judgment is appropriate if there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Summers v. A. Tcichert Son, Inc., 127 F.3d 1150, 1152 (9th Cir. 1997).

Discussion FMLA

The FMLA requires employers to provide at least twelve weeks of unpaid leave to eligible employees for (1) the treatment of a serious, disabling health condition suffered by the employee, (2) the birth of a child, or (3) the care of a child, spouse, or parent who suffers from a serious health condition. Funkhouser v. Wells Fargo Bank, N.A., 289 F.3d 1137, 1140 (9th Cir. 2002) (citing 29 U.S.C. § 2612(a), (c)). "At the conclusion of the qualified leave period, the employee is entitled to reinstatement to the position the employee previously held or to an equivalent one with the same terms and benefits that existed prior to the exercise of leave."Scamihorn v. Gen. Truck Drivers, 282 F.3d 1078, 1082 (9th Cir. 2002) (citing 29 U.S.C. § 2614(a)). The FMLA makes "it unlawful for an employer to `interfere with, restrain, or deny the exercise of or the attempt to exercise, any right provided' by the Act." Bachelder v. Am. West Airlines, 259 F.3d 1112, 1122 (9th Cir. 2001) (quoting 29 U.S.C. § 2615(a)(1)).

Fowler alleges that by terminating his employment assignment Defendants "interfered with" the exercise of his right to take FMLA-protected leave. (Pl.'s Complaint ¶ 30). As such, to survive the motions for summary judgment Fowler must present evidence sufficient to create a genuine issue of material fact as to whether Defendants used "FMLA-protected leave as a negative factor in an employment decision." See Bachelder, 259 F.3d at 1124-26 (discussing elements of an "interference with" type FMLA claim). With respect to this burden, Fowler must first show that he qualified for leave under the FMLA. See id. at 1126.

I

There is no dispute that Fowler's wife, Susan, had a "serious health condition" and that Fowler needed to "care for" her. However, even Fowler agrees that he was not an "eligible employee." Under the FMLA, to qualify as an "eligible employee," an employee must have been employed by the employer for a least twelve months and must have worked at least 1,250 hours within the past twelve months. Bachelder, 259 F.3d at 1119 n. 2 (citing 29 U.S.C. § 2611(2)). Fowler concedes he does not meet these requirements for eligibility. Indeed, at the time of his discharge Fowler had been employed less than five months.

Fowler, however, maintains that his lack of eligibility is not fatal to the FMLA claim. He asserts that the doctrine of equitable estoppel precludes the Defendants from relying on his lack of eligibility to deny him FMLA-protected leave. Specifically, Fowler contends that because Defendants either did not properly inform him of the Act's eligibility requirements and/or made representations that he could take leave under the FMLA, Defendants are estopped from challenging his eligibility.

The doctrine of equitable estoppel is recognized by the Ninth Circuit as a potential bar to an employer's assertion that an employee is not qualified under the FMLA. See, e.g., Marchisheck v. San Matco County, 199 F.3d 1068, 1076-77 (9th Cir. 1999). The Ninth Circuit has explained that the federal law principles of equitable estoppel are based on

the doctrine by which a person may be precluded by his act or conduct from asserting a right which he otherwise would have had. The effect of voluntary conduct of a party whereby he is precluded from asserting rights against another who has justifiably relied upon such conduct and changed his position so that he will suffer injury if the former is allowed to repudiate the conduct.

Hass v. Darigold Dairy Products Co., 751 F.2d 1096, 1099-1100 (9th Cir. 1985). In the context of a this case, the employer may be estopped from asserting a defense to the FMLA where: 1) the employer to be estopped makes a misrepresentation of fact to the employee with reason to believe that the employee will rely upon it; 2) and the employee reasonably relies upon it; 3) to the employee's detriment. See, e.g., Kosakow v. New Rochelle Radiology Assocs., 274 F.3d 706, 725 (2d Cir. 2001).

On the first element of equitable estoppel, Kelly's undisputed failure to perform its legal duty of advising Fowler of the protections of the FMLA constitutes a "misrepresentation by silence." See id. at 725-27. With respect to EDS, Fowler's deposition testimony sets forth the following evidence: that the supervisor(s) knew that Fowler had requested FMLA leave, (depo. of Fowler at 122:4-19; 138:20-139:7); that the supervisor(s) knew Fowler had submitted a doctor's letter for the purpose of qualifying for FMLA-protected leave, (id. at 129:11-130:1; 137:10-138:19; 143:6-144:18); and that Fowler was inquiring of EDS whether under these circumstances Fowler could take family medical leave, (id. at 128:14-130:1; 133:2-137:3; 139:8-140:23). At least for purposes of summary judgment, the repeated representations by EDS supervisors in response to Fowler's inquires, that everything was "ok" with his leave requests, are sufficient to satisfy the first element of equitable estoppel. See, e.g., Woodford v. Community Action of Greene County, Inc., 268 F.3d 51, 57 (2d Cir. 2001) (explaining that "employees who rely to their detriment upon the assurance of their employer that they qualify for leave under the FMLA may have recourse to the doctrine of equitable estoppel" to bar employer's ineligibility arguments).

For purposes of the summary judgment motion, Kelly accepts as true Fowler's assertion that Kelly did not inform him of his rights under the FMLA. (Kelly's Reply at 4 n. 1).

There also is evidence to show that Fowler justifiably relied on EDS and Kelly's representations to his detriment. First, it is undisputed that Fowler took time off to care for Susan after submitting the doctor's letter and being assured that leave was "ok." (EDS Statement of Undisputed Fact at 7-8). Second, Fowler has testified that if he had been told that he did not qualify for FMLA-protected leave he would not have taken that time off. (Aff. of John C. Lynn, Ex. A, Deposition of Fowler at 149:9-18;see also Aff. of Fowler ¶ 17). Finally, although disputed, as the Court will explain below, there is evidence that shows the Defendants' decision to terminate Fowler's employment assignment was based in part on the fact that Fowler had taken leave to care for Susan. Together these factors support the required showing at the summary judgment stage that Fowler reasonably relied to his detriment on the Defendants' representations. Accordingly, EDS and Kelly cannot succeed on their motions for summary judgment by asserting that Fowler was ineligible for FMLA protection. See Marchisheck, 199 F.3d at 1077 (recognizing that employer's failure to provide FMLA notice would estop employer from raising ineligibility defense); Kosakow, 274 F.3d at 725-27 (affirming the district court's decision to estop an employer from asserting an affirmative defense challenging an employee's FMLA eligibility when the employer's unintentional misleading behavior caused the employee to justifiably and detrimentally rely on the FMLA leave); Woodford, 268 F.3d at 57 (authorizing equitable estoppel where an employer initially provided notice of eligibility for leave and later seeks to challenge it); Dormeyer v. Comerica Bank-Illinois, 223 F.3d 579, 582 (7th Cir. 2000) (recognizing a district court's ability to equitably estop employers from asserting an affirmative defense contesting an employee's entitlement to FMLA leave in situations where the employer's words or conduct has misled the employee into relying on the leave).

II

A plaintiff can succeed on a FMLA claim by showing "that [his] taking of FMLA-protected leave constituted a negative factor in the decision to terminate [him]." Bachelder, 259 F.3d at 1125 (stating further that a plaintiff "can prove this claim, as one might any ordinary statutory claim, by using either direct or circumstantial evidence, or both"). Defendants seek to impose upon this inquiry issues pertaining to Fowler's ignorance of proper procedures and FMLA requirements, Defendants' good faith, shifting burdens and pretext. However, the Ninth Circuit has made clear that these issues are not particularly relevant to resolving a FMLA claim.

Specifically, with regard to the insinuation that it is Fowler and not the Defendants who should bear the blame for misunderstanding the FMLA, the Ninth Circuit has stated that "it is the employer's responsibility, not the employee's, to determine whether a leave request is likely to be covered by the Act." Id. at 1130-31 (noting that employee's submission of doctor's note, without any reference to the FMLA, was sufficient to trigger employer's duty to properly determine application of the Act). Defendants also seem to imply that Fowler's alleged failure in complying with company procedures for requesting leave precludes his FMLA claim. To the extent that it bears on Fowler's FMLA rights, there is clearly a disputed issue of material fact as to whether the Defendants waived the requirement of a written leave request. (Aff. of Fowler ¶ 19; Aff. of John C. Lynn, Ex. A, Deposition of Fowler at 125:20-127:23).

As for Defendants' efforts to assert a burden-shifting, pretext analysis, it has been determined by the Ninth Circuit that such a framework "is inapplicable here." Id. at 1125. Instead, the sole question is whether Fowler has submitted evidence sufficient to create a genuine issue of material fact as to whether "[his] taking of FMLA-protected leave constituted a negative factor in the decision to terminate [him]." See id.

In this respect, the assertion by EDS that it based its termination decision on the honestly held belief that Fowler was not using his leave on January 23, 2001 for its intended purpose does not shield EDS from liability if the taking of FMLA-protected leave was used as a negative factor in Fowler's discharge. See id. at 1130-31 (explaining, among other things, that "the employer's good faith or lack of knowledge that its conduct violated the Act is, as a general matter, pertinent only to the question of damages under the FMLA, not to liability). And, in fact, the deposition testimony of EDS manager Teri Garvin demonstrates that the decision to terminate Fowler's employment assignment was based on several factors, including Fowler's previous leave history. (Aff. of John C. Lynn, Ex. D, Deposition of Garvin at 98:15-25 (explaining that "just a lot of factors . . . went into that decision" including the perception that Fowler had lied, "all of these other [leave] occurrences," and the failure to provide appropriate documentation and notice (emphasis added)). As such, because Fowler need only show "the use of FMLA-protected leave as a negative factor at all," Fowler has met his burden here. Bachelder, 259 F.3d at 1131 (emphasis in original). Similarly, Fowler has submitted evidence that shows Kelly based its employment decision, at least in part, on Fowler's use of leave. (Aff. of Fowler, Ex. F (Kelly stating that Fowler was discharged for "poor attendance" including an absence on 1/23/01).

Presumably it is for this reason that Garvin is equivocal as to whether Fowler would have been retained if she had not believed that Fowler had lied about his leave on January 23, 2001. (Aff. of John C. Lynn, Ex. D, Deposition of Garvin at 99:4-6).

In sum, viewing the evidence in the light most favorable to Fowler, the Court concludes that on the relevant issues Fowler has set forth sufficient evidence to create genuine issues of disputed material fact to be resolved in a trial. Under the FMLA, in addition to suing the employer, a plaintiff may also sue supervisors or managers who violate the FMLA while acting in the interest of their employers. See, e.g., Mercer v. Borden, 11 F. Supp.2d 1190 (C.D. Cal. 1998). With regard to defendant Bonnie Cole only, Defendants contend that there is no evidence to show that she acted as Fowler's manager or supervisor during the time-frame giving rise to Fowler's claim. (EDS Mem. in Supp. at 4 n. 5). The Court agrees, and therefore the Court will grant summary judgment in favor of Cole on Fowler's FMLA claim while denying summary judgment as to all other Defendants.

State Law Claims

Fowler also brings two state law claims against the Defendants. In resolving these claims at summary judgment, the Court must apply the substantive law of Idaho, as interpreted by the Idaho Supreme Court. See Northwest Acceptance Corp. v. Lynnwood Equip., Inc., 841 F.2d 918, 920 (9th Cir. 1988).

I

Fowler asserts a state law claim based on negligent misrepresentation. Fowler candidly admits that the vitality of this claim is dependent on the same analysis of Defendants' alleged misrepresentations that underpin the "application of the doctrine of equitable estoppel" to Fowler's FMLA claim. (Pl.'s Mem in Opp'n at 17). However, as Defendants correctly note, Idaho courts recognize this cause of action only in the confines of a special relationship that is not present here. See, e.g., Duffin v. Idaho Crop Improvement Ass'n, 895 P.2d 1195, 1201 (Idaho 1995). Accordingly, summary judgment will be entered in favor of Defendants on this claim.

To the extent that Fowler seeks to amend his Complaint to assert a cause of action for negligent infliction of emotional distress in place of the claim based on negligent misrepresentation, (Pl.'s Mem. in Opp'n at 19), Fowler fails to make the showing necessary to succeed in this effort. See, e.g., Janicki Logging Co. v. Mateer, 42 F.3d 561, 566 (9th Cir. 1994) (plaintiff must demonstrate good cause to amend complaint after scheduling order deadline and amendment must not cause opposing party undue prejudice or create undue delay).

II

Fowler also alleges that Defendants' actions breach an implied covenant of good faith and fair dealing. It is undisputed that Fowler's employment was "at-will." In an at-will relationship "[e]ither party may terminate the relationship at any time for any reason without incurring liability." Raedlein v. Boise Cascade Corp., 931 P.2d 621, 623 (Idaho 1996). However, a limitation on the at-will relationship may be implied "when, from all the circumstances surrounding the relationship, a reasonable person could conclude that both parties intended that either party's right to terminate the relationship was limited by the implied in fact agreement." Id. In this regard, "any action which violates, nullifies or significantly impairs any benefit or right which either party has in the employment contract, whether express or implied, is a violation of the covenant [of good faith and fair dealing]." Crea v. FMC Corp., 16 P.3d 272, 276 (Idaho 2000). It is important to note, however, that the

implied covenant of good faith does not inject substantive terms into the contract but, rather, requires only that the parties perform in good faith the obligations imposed by their agreement. Thus, the duty arises only in connection with terms agreed to by the parties. The covenant does not create on the part of the employer a duty that is not inherent in the employment agreement.

Jones v. Micron Technology, Inc., 923 P.2d 486, 492 (Idaho Ct.App. 1996) (citations omitted).

Fowler contends that the "agreement" which the Defendants breached was that Fowler would be allowed unpaid leave "to care for Susan as long as [Fowler] called in and gave notice if he was going to be in late or not at all." (Pl.'s Mem in Opp'n at 20). But Fowler fails to point to any evidence to support this allegation. (Id.; Pl's Statement of Disputed Facts). At best, Fowler has submitted evidence sufficient to withstand summary judgment as to whether Defendants represented that Fowler was entitled to take unpaid leave consistent with the statutory entitlement provided by the FMLA. But this evidence is not sufficient to create a genuine issue of material fact as to whether the parties agreed as a term of Fowler's employment that Fowler had a contractual right to unpaid leave. See Jones, 923 P.2d at 492. Therefore, the Defendants' motions for summary judgment will be granted on this claim.

ORDER

Based on the foregoing, and the Court being fully advised in the premises, it is HEREBY ORDERED that the Motion for Summary Judgment filed by Defendants Kelly Services, Inc., and Kerri Ruger (Docket No. 24) and the Motion for Summary Judgment filed by Defendants Electronic Data Systems Corporation, Jared Hull, Jesse Gallegos and Bonnie Cole (Docket No. 20) are GRANTED in part and DENIED in part as follows:

1. Summary Judgment is GRANTED in favor of all Defendants on Count Two (Misrepresentation), and Count Three (Breach of Implied Covenant of Good Faith and Fair Dealing) of Plaintiff's Complaint and those Counts are DISMISSED.

2. Summary Judgment is GRANTED on Count One (FMLA Violation) of Plaintiff's Complaint in favor of Defendant Bonnie Cole only, and DENIED as to all other Defendants.