Bookstore Violate COBRA and the FMLA After Termination?

Stay alert to regulatory changes affecting compensation and benefits, find out about industry trends, and review current surveys and statistics with Benefits & Compensation Management Update.


By Allison M. Gatrone

“You interfered with my maternity leave and then failed to notify me of my eligibility for continued coverage after you fired me,” Maura told Scott, a human resources officer for her former employer.

“We paid you while you worked from home, and we didn't violate any requirements regarding your coverage eligibility,” Scott replied.

FACTS: A worker employed by a bookstore for 10 years, first as an accountant and then as a payroll manager, told her manager that she was pregnant and planned to take leave under the Family and Medical Leave Act when her child was born.

The worker was essential to the implementation of a new payroll system being rolled out, so she would not go on maternity leave but would be allowed to work from home, her manager said.

The worker reiterated her intent to take maternity leave, but given her manager's insistence, she said she felt she had no choice.

For several months after her child's delivery, she worked full time from home. After she returned to the office, the worker was reassigned to a new position as a risk manager, which would include travel.

When the worker found out that the company was hiring for a new payroll manager position, she asked her manager for an explanation and was told that the payroll system was poorly implemented.

The system was largely implemented while she was at home with her newborn, the worker said. Also, she had no risk-management experience and did not think travel was compatible with care of her new child. She asked to retain her payroll duties but was told to take the new position or resign.

The worker did not accept the new position and was terminated. After her termination, she did not receive information about her right to continued dental coverage as required by the Consolidated Omnibus Budget Reconciliation Act.

The store interfered with her right to take FMLA leave and failed to send her a COBRA notice, the worker said in a lawsuit against the bookstore.

The bookstore interfered with the worker's maternity leave, but because she was paid for working full time from home, she suffered no “legal damages,” a federal district court said. Having failed to establish that she suffered a loss of income, the worker could not state an FMLA error, it said.

The bookstore violated COBRA by failing to send the required notice of continued coverage to the worker, the court said. The answers provided by the bookstore's officers were not convincing enough for the court to conclude that the failure to mail the notices was a mistake, it said, fining the store $75 a day for the violation.

A worker claimed her employer violated the FMLA and COBRA after she was fired.

The worker appealed the court's ruling on her FMLA leave. The bookstore appealed the court's ruling that it violated the COBRA notification requirement, claiming the court's assessment of penalties was an “abuse of discretion.”

ISSUE: Did the bookstore violate the FMLA and COBRA?

DECISION: The district court erred in dismissing the worker's FMLA claim but correctly determined that the bookstore violated COBRA, a federal appeals court ruled.

The FMLA provides for two categories of remedies, the court said. The first is damages, which includes compensation, benefits and other monetary losses that result from the violation. The second is “such equitable relief as may be appropriate, including employment, reinstatement, and promotion,” it said.

The worker had only to demonstrate a harm that could be remedied by “damages” or “equitable relief,” the court said. Although the worker was paid for working from home, the fact that she was reassigned to another position based on her performance during that time period shows that her position at the company suffered due to the interference with her FMLA leave, it said.

“It seems plain to us that if an employer coerces an employee to work during her intended FMLA leave period and, subsequently, reassigns her based upon her allegedly poor performance during that period, the employee may well have been harmed by the employer's FMLA violation,” the court said. In this case, the harm suffered might be remedied by reinstatement or the equitable remedy of “front pay” for an appropriate period, it said.

The appeals court upheld the district court's factual finding that the bookstore intentionally violated COBRA because the ruling was largely based on the assessment of the credibility of the bookstore's witnesses, which is a determination of credibility that the appeals court said it “will not ordinarily review” (Evans v. Books-a-Million,2014 BL 222400, 11th Cir., No. 13-10054, 8/8/14).

POINTERS: Employers must offer continued health insurance coverage at group rates to terminated employees or laid-off workers whose reduced hours normally would result in loss of health care coverage under COBRA. Failure to comply with the act's notification requirements can result in a fine of up to $100 per day until notification is given.

For more information, see the Compensation and Benefit Library “COBRA Health Care Continuation Coverage” chapter.

To contact the editor responsible for this story: Michael Baer at

This analysis illustrates how courts resolve pay-related disputes. The names and dialogue are fictitious.