The U.S. Department of Labor pulled at what looked like a little, loose string at T.G.I. Fridays and proceeded to unravel a companywide flaw in the restaurant chain's family leave policy.
Therein lies a cautionary tale for the HR department: If you don't regularly and fastidiously update your employee handbook, you could be costing your employer untold dollars if and when the feds come knocking.
The latest sign of this comes from the DOL's Wage and Hour Division. In citing T.G.I. Fridays for a relatively minor Family Medical Leave Act violation, WHD came down hard on the 272-store restaurant chain.
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In brief, here's what happened: WHD looked into a complaint by a company employee at a restaurant in Shreveport, La. It ruled that T.G.I. Fridays failed "to reinstate the employee to the same or equivalent position, including pay, benefits and other terms of employment, and that the worker was not allowed to return to work immediately following FMLA-covered leave. The delay in allowing the employee to return to work caused the employee to lose three weeks of pay."
Immediate result? The company had to pay the employee $1,455 in back wages.
Bigger result? WHD investigated further. It found "the company's FMLA policy and worker rights notification practices were not in keeping with the law. Specifically, the policy did not include information on the FMLA's military family leave provisions, information on the right to take FMLA-covered leave on an intermittent or reduced schedule basis, and misstated the 12-month employment requirement for FMLA eligibility as being 12 continuous months."
T.G.I. Fridays had to revise its entire family leave policy to get into compliance with FMLA's latest updates. The oversight will cost the company time and money to correct its written policy and notify everyone of the change. Worse, it has to endure the attendant bad publicity (like this and other articles). And it very likely could lead to other employees claiming their FMLA rights were violated.
As DOL noted on its blog, T.G.I. Fridays was the third company of late to be sanctioned over FMLA violations.
"This month, aircraft manufacturer Hawker-Beechcraft agreed to resolve allegations of violating the FMLA by paying three wrongfully terminated workers more than $48,000 in back wages," DOL posted on its blog. "The company also agreed to provide training for its 6,000 employees about their rights under the act. And earlier this year, an energy company in Alaska was ordered to reinstate and pay $43,000 in back wages to a worker fired under an erroneous leave policy. That company also has agreed to change its policy going forward."
And it would have been so easy to avoid, says labor lawyer Steven M. Bernstein.
"Regardless of whether an employer is before the DOL, the NLRB, or the EEOC, the employee handbook is typically the second item requested (right after a copy of the employee's personnel file). These agencies do have the authority to issue investigative subpoenas, so one way or the other they may ultimately have access to the handbook," Bernstein said.
"To me this underscores the importance of regular handbook updates for strict legal compliance with the latest regulatory changes, which now seem to be coming monthly, if not weekly. Employers would be wise to ensure up-to-date compliance, as the days of doing business with 'canned,' outdated or off-the-shelf policies and procedures are quickly coming to an end."
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
