“Honest Belief” May Shield Employers

Recently, in Seeger v. Cincinnati Bell Telephone Co.(CBT),  the Sixth Circuit Court of Appeals held that CBT’s “honest belief” that Seeger had engaged in disability fraud shielded it from liability for retaliatory termination under the Family Medical Leave Act (FMLA).

Seeger, a long time employee with CBT, developed a herniated disc in August 2007, and commenced leave under the FMLA.  While 29 U.S.C. § 2612(c) allows employers to provide FMLA on an unpaid basis, the collective bargaining agreement in effect at the time of Seeger’s injury, provided that Seeger was eligible to receive paid disability under CBT’s Sickness and Accident Disability Plan while on FMLA leave.  To receive disability compensation while on FMLA, Seeger had to provide CBT access to his medical records and was required to work a modified or light duty condition tailored to meet his condition.

Seeger reported to his doctor that he was in severe pain and upon examination Seeger exhibited difficulty walking and getting in and out of chairs.  Seeger’s doctor advised CBT that Seeger was not permitted to return to light duty.  As a result Seeger was placed on leave for approximately two months, during which time he received disability compensation.

While on leave, several co-workers interacted with Seeger at an Oktoberfest whereby they witnessed him walk prolonged distances and stand for long periods of time.  When one of Seeger’s co-workers reported this to CBT’s Human Resource Manager, CBT initiated an investigation whereby it interviewed those who had seen Seeger at Oktoberfest, reviewed his medical records, discussed Seeger’s condition with his doctor, and questioned Seeger himself.  CBT also provided Seeger with the opportunity to present his own evidence to rebut allegations regarding the exaggeration of his symptoms. Based upon perceived inconsistencies with the medical records and his reported behavior at Oktoberfest, CBT ultimately terminated Seeger on the grounds of disability fraud because he “over-reported” the severity of his symptoms to avoid the light-duty work requirement.

Seeger brought suit alleging retaliation in violation of the FMLA, and the district court granted summary judgment to CBT.  On appeal, the Sixth Circuit upheld the summary judgment in favor of CBT stating that fraud and dishonestly constitute lawful, non-retaiatory bases for termination (See Bentley v. Orange Cnty., Fla., 445 F. App’x 306, 309-10 (11th Cir. 2011)).  In deciding the case, the court determined the relevant question was not whether Seeger actually committed fraud, but whether CBT reasonably and honestly believed that he did. The Court concluded that that CBT’s actions show CBT made a “reasonably informed and considered decision” in terminating Seeger based on an honest belief that he committed fraud.

The importance of this case for employers is that the “honest belief” defense is not an automatic shield to liability.  An employer must be able to point to specific facts which led it to believe the employee was engaging in improper behavior which justified termination.  (See also Brooks v. Davey Tree Expert Co., 2012 U.S. App. LEXIS 7770 (6th Cir. Tenn. 2012)).  In other words, an employer must conduct a thorough investigation and have sufficient evidence to prove its allegations.   A question which was not addressed by the Seeger case, but will likely arise in future litigation is whether an employer has cart-blanche to conduct investigations for the sole purpose of gathering facts to justify terminating an employee.