OCTOBER 2006

JUDICIAL UPDATES

Employer Defeats Claims Under California Family Rights Act

In 2000, Barbara Neisendorf joined Levi Strauss & Co. as Vice President, Worldwide Training and Development.  The written offer letter indicated that the employment relationship would be at will.  Neisendorf worked for Levi Strauss for two years.  During that time, her supervisor and subordinates expressed concerns about her performance.  The supervisor, Fred Paulenich, met with Neisendorf several times in July and August 2002 to address issues that had been raised in Neisendorf's mid-year review.  Neisendorf  blamed others for the perceived problems.  After another meeting, Neisendorf declared that the parties were at a "impasse," and she offered to resign with a separation package.  A short time later, after learning that the company had determined that she was not eligible for such a separation package, Neisendorf took a 4-week disability leave.  She supported this leave only with a doctor's note that stated "Medically, Ms. Neisendorf is unable to work."  Eventually, she was diagnosed with neurodermatitis, irritable bowel and muscle spasm.  She later saw a psychiatrist, who diagnosed her with a panic disorder.  The employer notified Neisendorf of her rights and obligations under the California Family Rights Act and the Family Medical Leave Act.  In late September, Neisendorf's medical leave was extended by four weeks.

Neisendorf's doctor cleared her to return to work with certain accommodations, which included hiring a neutral external job coach to help re-establish a peaceful working relationship between Neisendorf and her supervisor; redesigning her job for several months so that she could have sufficient time off to complete treatment; and having a reporting relationship to someone other than Paulenich for three months or longer.

Although not believing that Neisendorf was legally disabled, Levi Strauss expressed a willingness to work with her to help her return to work.  The company made clear, however, that Neisendorf's successful return to her job was conditioned on her willingness to accept and address the performance deficiencies that were described in her mid-year performance review.

In late November 2002, Neisendorf and Paulenich met with a return-to-work specialist to review accommodations that had been agreed upon by both sides.  The next day, Paulenich and Neisendorf had a meeting during which Paulenich briefed Neisendorf on the status of her projects.  He presented her with a proposed development plan and explained that she must acknowledge the performance issues that were raised before her leave.  However, they could not agree on the key development issues identified in the performance review.  The day after the meeting, Paulenich sent a letter to Neisendorf advising her that her employment was terminated, effective immediately.

Neisendorf sued Levi Strauss, alleging several types of claims.  The claim pertinent to her appeal was the trial court's decision that Levi Strauss did not violate the CFRA.  Neisendorf had claimed that Levi Strauss had interfered with her substantive rights under the CFRA, and that it had discharged her in retaliation for taking medical leave under that statute.

The Court of Appeal upheld the trial court's determination on these issues.  The facts were clear that Neisendorf was an eligible employee covered by the CFRA; that Levi Strauss was an eligible employer; and that Neisendorf took a 12-week CFRA medical leave for treatment of a covered medical condition.  The key to the decision was that, upon expiration of the 12 weeks of leave, Neisendorf had not returned to work because she was unable to perform the essential functions of her job without reasonable accommodation.  Federal and state law are clear that an employer does not violate these medical leave statutes when it fires an employee who is unable to return to work at the conclusion of the 12-week period of leave.

The appellate court also upheld the jury's determination that Levi Strauss had not improperly retaliated against Neisendorf for asserting her CFRA rights.  The evidence clearly established that, before she went on leave, Neisendorf had well-documented performance issues.  The company had announced its determination to address and resolve those performance issues before Neisendorf ever went on protected medical leave.  Under CFRA, an employee requesting such leave, or who is on such leave, has no greater right to reinstatement than an employee who remains at work.  With a legitimate, nondiscriminatory reason for the decision to terminate her employment, Levi Strauss could successfully establish that the termination did not violate the CFRA.  (Neisendorf v. Levi Strauss & Co., Court of Appeal, First Appellate District, Case No. A109826; filed August 29, 2006, and certified for publication on September 28, 2006.)

If you would like to discuss these or any other employment law matters, please do not hesitate to contact any member of Klinedinst's Employment Law Department.