Time Worked From Home Counts Toward FMLA’s Minimum Hour Eligibility Requirement If Employer Knew or Had Reason to Know Employee Worked From Home

On September 23, 2009, in Erdman v. Nationwide Insurance Company, the United States Court of Appeals for the Third Circuit discussed when an employee’s time working from home counts toward the 1,250 minimum hours required for an employee to be covered by the Family & Medical Leave Act (FMLA). The Third Circuit is the federal appellate court that includes New Jersey. The FMLA is a federal employment law that permits qualified employees to take time off from work to care for their own serious medical conditions, the serious medical conditions of members of their immediate family, for pregnancy, childbirth, adoption, or foster care, or to care for a new child.

The employee in that case, Brenda Erdman, has a daughter with Downs Syndrome. In 1998, Ms. Erdman’s employer, Nationwide Insurance Company, permitted her to work part time so she could care for her daughter. Ms. Erdman worked part time for four years, when she switched to a four day work week.

Ms. Erdman worked nearly 1,300 hours for Nationwide Insurance during the year at issue, including more than 100 hours that she worked from home. She had previously worked from home for Nationwide for many years. Nationwide consistently either paid her for working those hours, or allowed her to use the time as “comp” time.

In 2002, Ms. Erdman’s supervisor instructed her to “put in the hours that . . . you’re supposed to put in and nothing more than that.” Although Ms. Erdman asked if she was still permitted to work extra hours to accrue comp time, her supervisor did not respond.

The lower court concluded that Nationwide did not have sufficient notice that Ms. Erdman continued to work from home after her supervisor told her she could only put in the hours she was supposed to work. As a result, it dismissed her case. However, the Third Circuit disagreed.

The Third Circuit recognized that hours worked off-site can count toward the FMLA’s minimum hour requirement only if the employer “knows or has reason to believe” the employee is working those hours. As a result, the relevant question is whether a jury reasonably can conclude that Nationwide knew or should have know that Ms. Erdman continued to work from home after her supervisor’s instruction.

The Third Circuit ruled that a jury can conclude that Nationwide had sufficient notice that Ms. Erdman was continuing to work from home. Specifically, a jury can believe her supervisor’s statement merely meant that she could no longer be paid for working extra hours at home, without prohibiting her from continuing to work from home to accrue comp time. In other words, her supervisor’s comment could mean the company wanted to eliminate overtime pay, or wanted to ensure uniform salaries, without prohibiting Ms. Erdman from working at home to make up for time she missed. Accordingly, the Court reinstated Ms. Erdman’s case and sent it back to the District Court so it can proceed to a trial.