Amy Kohls v. Beverly Enterprises Wisconsin, Inc. D/B/A Maple Manor Healthcare

Citations: 259 F.3d 799; 2001 U.S. App. LEXIS 17120; 80 Empl. Prac. Dec. (CCH) 40,625; 2001 WL 864283Docket: 00-2064

Court: Court of Appeals for the Seventh Circuit; August 1, 2001; Federal Appellate Court

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Amy Kohls, the plaintiff-appellant, alleged that her employer, Beverly Enterprises Wisconsin, Inc. d/b/a Maple Manor Healthcare, violated the Family and Medical Leave Act (FMLA) by failing to reinstate her after maternity leave. The Seventh Circuit Court affirmed the district court's summary judgment in favor of Beverly, concluding Kohls did not demonstrate a violation of her FMLA rights.

Beverly operated Maple Manor, a nursing and rehabilitation facility in Wisconsin, where Kohls worked as the Activities Director beginning in May 1997. Throughout her tenure, her performance was evaluated by various executive directors, with mixed feedback ranging from above average to marginal. A state survey in 1998 highlighted deficiencies in the activities department, prompting discussions between Kohls and the new executive director, Luanne Flick, who noted areas for improvement but did not demand immediate changes.

Kohls requested FMLA leave from September 28, 1998, to December 1, 1998, which Flick approved without issue. During Kohls' absence, a temporary replacement, Shelly Price, received complaints about Kohls' programming from residents and made several changes to the activities offered. Flick expressed during Kohls' leave a preference for Price’s programming, indicating dissatisfaction with Kohls’ prior performance.

Flick claims that prior to Kohls taking leave, there were complaints regarding the activities program from nursing assistants, residents, and their families, although he did not document these complaints and could recall only one individual. Flick also noted that activity supplies were outdated and that Kohls failed to recruit enough volunteers or maintain a volunteer list. While Kohls acknowledged the lack of an active volunteer list, she disputed the other claims. Price, who provided deposition testimony, supported Kohls' position, stating she did not remember purchasing new supplies and did not see the number of volunteers as an issue.

After Kohls began her leave, Flick grew worried about the Resident Council's checking account, which Kohls managed. Kohls had informed Price of discrepancies in the checkbook before her leave and later admitted to failing to document entries properly, not reconciling bank statements, discarding statements, and having an unaccounted check for $30.93. Despite the account's trust status, Flick did not report any suspected misappropriation of funds or discuss her concerns with Kohls.

During her maternity leave, Flick contacted Kohls twice to discuss meetings and conferences. Kohls attended one conference but expressed concerns about attending another due to her infant. Flick reacted abruptly but ultimately allowed Kohls to attend a later conference after her return.

Before Kohls returned, Olson advised her to seek other employment due to Flick's anticipated hostility upon her return. Kohls returned to work on November 30, 1998, and during a departmental meeting, Flick confronted her about complaints regarding her performance and accused her of embezzlement based on discrepancies in the check register. Flick presented the checkbook without allowing Kohls time to review it and ultimately gave her the choice to resign or be terminated for alleged misappropriation. Kohls initially agreed to resign but later retracted her resignation, leading Flick to terminate her employment for alleged misappropriation and poor job performance.

Beverly's written discipline policy categorizes prohibited behavior into two violations: category one for misappropriation of funds, leading to immediate suspension without pay pending an investigation, and category two for performance concerns. Investigations for category one violations require witness interviews and allow the employee to present their side, with input from the Human Resources Manager, culminating in a decision by the Executive Director on potential discharge. Although progressive discipline is encouraged for category one violations, the policy emphasizes that disciplinary procedures are not absolute and may vary based on specific circumstances. Beverly's discharge policy mandates that no discharge occur without an appropriate investigation, though the criteria for such an investigation are not defined.

Kohls filed a lawsuit in Wisconsin state court against Beverly for failing to reinstate her as Activities Director under the Family and Medical Leave Act (FMLA). Beverly removed the case to federal court and sought summary judgment. The court evaluated whether a jury could reasonably find that Kohls' termination was related to her leave and concluded it could not, thus granting summary judgment in favor of Beverly. Kohls' appeal focuses specifically on the dismissal of her FMLA claim.

The FMLA entitles eligible employees to certain rights, including reinstatement to their previous position or an equivalent one after taking leave. Kohls alleges that Beverly denied her reinstatement rights, which are generally guaranteed under the FMLA, although these rights do not guarantee any benefit or position beyond what the employee would have had if they had not taken leave. Therefore, the right to reinstatement is not absolute.

An employee alleging employer interference with her rights under the Family and Medical Leave Act (FMLA) must demonstrate, by a preponderance of the evidence, her entitlement to the claimed benefit. The employer can then counter by proving that the employee would not have retained her position even if she had not taken leave. The burden lies with the employee to refute this assertion. According to 29 C.F.R. sec. 825.216(a)(1), an employer can deny reinstatement if it can show the employee would not have been employed at the time of requested reinstatement. Specific conditions allow employers to refuse restoration, such as when an employee’s project is completed during their leave or if an employee is laid off while on leave. The determination of FMLA violations hinges on the reasons for an employee's non-reinstatement. While an employee cannot be fired for taking leave, they may be terminated for poor performance if such performance would have led to termination regardless of leave status.

Kohls argues that her termination was a result of her taking maternity leave, thus entitling her to reinstatement. Beverly counters that Kohls would have been fired regardless due to issues with the Resident Council checkbook and the activities program. The evidence presented supports Beverly’s claim, as Kohls acknowledged failing to properly manage the checkbook, including unaccounted checks and discarded bank statements. Despite not disputing Flick's claim of a $70.86 discrepancy, Kohls did not adequately address performance issues raised by multiple parties about her management of the activities department. The employer has the discretion to terminate an at-will employee for financial mismanagement or poor performance, and there is no federal requirement for just cause in dismissals.

Beverly's decision to fire Kohls came after her leave, which complicates the context. Timing could imply that if termination was decided only after the leave, it might suggest the leave influenced the decision. However, it was determined that many deficiencies in Kohls' performance were only discovered after her leave, indicating that the leave itself did not prevent the employer from terminating her for the identified issues.

Ultimately, Kohls claims her firing was due to Flick favoring her replacement rather than legitimate performance issues, asserting that Beverly's stated reasons are pretextual. While the inquiry focuses on the honesty of the employer's reasons, Kohls carries the burden to prove a violation of the Family and Medical Leave Act (FMLA). Demonstrating pretext may have relevance but does not automatically fulfill her burden of proof.

Kohls argues that Flick's preference for Price as the Manor's permanent Activities Director indicates she was not terminated for performance issues or financial misconduct. However, this preference does not prove that Kohls would not have been fired had she not taken leave. Beverly had the right to terminate Kohls for mismanagement regardless of her leave status. Evidence supports Beverly's claim that Flick and others preferred Price for her successful activities programs, with no indication that Flick's preference was linked to Kohls' leave.

Kohls contends that Flick's failure to adhere to termination procedures suggests she was not truly fired for valid reasons. While Flick did not follow the written discipline policy, these procedures were discretionary, allowing her to terminate Kohls immediately. The court emphasizes it does not question management decisions or recommend personnel practices.

Beverly asserts that Kohls' job deficiencies were the basis for her termination and that she would have been let go irrespective of her leave. Kohls has not provided sufficient evidence to counter this claim. Consequently, the court finds Kohls has not demonstrated entitlement to reinstatement post-FMLA leave, affirming the district court's summary judgment in favor of Beverly Enterprises Wisconsin, Inc. Kohls' original claims of retaliation under FMLA and Title VII were not pursued on appeal. The termination form cited job performance issues, specifically mismanagement of funds and inadequate programming. The exact timing of the termination decision remains unclear in the record.