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Is Indefinite Leave of Absence a Reasonable Accommodation?

Sometimes, a situation arises where an employee cannot return to work after FMLA leave expires.  Although different lengths of leave have been considered appropriate under the ADA, usually indefinite leave has never been looked at as a reasonable accommodation.  Recently, however, the New York Court of Appeals issued a ruling that may call that assumption into question.

In the case, a bank executive took almost five months of leave for various medical issues, including major depression.  The bank contacted the employee, and asked whether he intended to return to work or whether he intended to give up his position.  The employee responded by stating that he had no intention of giving up his position, and that he had an “indeterminate” return-to-work date.  The bank responded by terminating him.  When the employee filed suit, the bank traditionally argued that his proposal of indefinite leave was not a reasonable accommodation.

Under New York City law, however, the court found that the bank had the burden of showing why indefinite leave would impose an undue hardship on the company.  Basically, the court noted that there is no accommodation that is per se unreasonable, and thus that the bank would have to show more before the court would dismiss the case.  Essentially, an employer faced with an indefinite leave request (in New York City) has to show either that 1) the employee could not perform the essential functions of the position with reasonable accommodation or 2) that the accommodation would result in an undue hardship.  The article notes, correctly, that the bank made a couple mistakes.  First, it ended the reasonable accommodation “interactive process” too early before finding out necessary information.  Second, it didn’t appropriately figure out how the employee’s indefinite leave was affecting its business.  By figuring out what hardships it was facing, the employer would have been in a better position to discuss the employee’s situation, and to engage with the employee about what kind of leave he was requesting.

Second, Orrick has a roundup of the SEC’s annual report about its Dodd-Frank whistleblower program.  Basically, the SEC only received a modest increase in tips in FY2013 as compared to 2012, and for the most part the topic distribution of tips remained the same.  The SEC only awarded four awards during the fiscal year, although one was a huge $14 million dollar award that is by far the largest ever reported.  The other three awards surrounded information about an alleged sham hedge fund.

The Office of the Whistleblower also reviews submissions of employee confidentiality agreements that may prevent an employee from reporting possible violations to the SEC, as well as possible retaliation claims.  The SEC is likely monitoring a recent 5th Circuit opinion that held that the anti-retaliation provisions in Dodd-Frank only applied to those employees who reported to the SEC, not to those who only reported internally.  Based on the language in the report, the SEC believes that decision may be contrary to law, and may be interested in using legal action to alert companies against using agreements to limit disclosure possibilities.