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Lapidoth v. Telcordia Technologies, Inc.

420 N.J. Super. 411, 22 A.3d 11 (App. Div. 2011)

EMPLOYER-EMPLOYEE; AT-WILL EMPLOYMENT — Even though employment may clearly be “at-will,” and the employer’s code and employment action clearly states so, an employee can later create contractual rights or promise a particular employee that he or she will be reinstated after a lengthy leave of absence, thereby, for those purposes, negating the at-will condition of employment.

An employee, who was required by her employer to work twenty-five hours per week but often worked overtime because of the volume of work, requested a six-month maternity leave for her tenth child. Throughout her employment as a release manager, she had requested and had received, leaves of absence for the births of her other nine children. Her supervisor notified her that another release manager for two other products would perform her job in her absence. Prior to the employee beginning her maternity leave, she trained the other release manager to act as manager on her project. After the woman gave birth, her employer sent her a form letter notifying her that it had approved a six-month leave of absence. The letter reiterated the company’s policy on maternity leave, stating, in relevant part, that the leave was granted with a guarantee of reinstatement up to 12 months later to the same or a comparable job, including for the number of hours and days worked each week, and for the same salary and benefits as she enjoyed prior to the leave. However, reinstatement was not guaranteed if the job was to be declared surplus or the number of hours requested at the time of reinstatement would be different than when the leave began.

Months later, the employee requested another six-month leave. That same day, the employer approved her request and again notified her in writing that so long as her position was not declared surplus and she did not request a change in hours, reinstatement of her position was guaranteed following her leave. After the employer reorganized, the employee’s manager determined that the employee’s project required a full-time release manager. The employee’s replacement filled that position.

The employee then notified her employer that she planned to return in a part-time capacity of twenty-five hours per week. Her supervisor asked her if she was willing to return to work full-time because the release manager position now required those additional hours. She was willing. Due to budgetary constraints, the employer could only maintain one full-time release manager position on the project. The manager compared the employee’s and her replacement’s yearly performance evaluations and found that the replacement had somewhat better ratings. Based on those ratings, the manager chose the replacement employee for the job. No other positions were available to offer the woman upon her return, so the employer terminated her employment, believing that it was free to do so because she was an at-will employee. The Family and Medical Leave Act (FMLA) and the New Jersey Family Leave Act (NJFLA) only require reinstatement at the end of a leave when the leave is twelve weeks or less. The employer’s Code of Business Ethics set out an at-will employment policy. The Code was posted on the company website and distributed annually to all employees. Also, when the employee originally applied for her position, she signed an employment application acknowledging that acceptance of an offer of employment did not create any contractual rights.

The employee filed a complaint alleging that her employer had discriminated and retaliated against her in violation of the FMLA and the NJFLA by discharging her because she had taken maternity leave, and that her employer had breached a contract to reinstate her employment at the conclusion of her leave. The lower court found that the employer’s Code provided a clear disclaimer that all employment was at-will. The employee presented no evidence to alter that relationship or policy. The lower court also found that the employer did not violate the FMLA or the NJFLA because those statutes only required reinstatement of employment when an employee takes a twelve-week-or-less leave of absence, and here, the employee took a one-year leave of absence.

On appeal, the Appellate Division found that the lower court correctly ruled that the employer did not violate the FMLA by failing to reinstate plaintiff after her twelve-month leave because, as a precedential case provided, the FMLA guarantees reinstatement of employment only for leaves of absence that last for twelve weeks or less. That rule applied to this case regardless of whether or not the precedential facts were distinguishable.

The employee also claimed that the two letters approving her leaves of absence and guaranteeing her job upon completion of her leave amounted to a contract, and her employer had breached that contract by terminating her employment. The Court found that the lower court erred in dismissing the employee’s breach of contract claim because the evidence could support a finding that the employer had promised to reinstate the employee’s position at the end of her leave. While the employer’s Code and employment application provided that employment was at-will and nothing in the Code or any of other policies, practices, and procedures created any contractual rights, the letters from the employer describing its maternity leave policy seemed to contradict those general provisions. Whether viewed as a company policy creating contractual rights or a promise made to a particular employee, a reasonable employee could interpret the policy as promising reinstatement. Further, the employer granted nine previous maternity leaves and reinstated her employment at the conclusion of all of them. Reversing on the breach of contract claim, the Court found that, after this history, a reasonable employee could reasonably interpret the policy as promising reinstatement.

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