7th Circuit rules on FMLA case

The 7th Circuit Court of Appeals has reversed a medical-leave decision from an Indianapolis judge who's since joined that appellate bench.

In Steven Peters v. Gilead Sciences, Inc., No. 06-4290, the three-judge panel reversed and remanded the case involving a Family and Medical Leave Act claim. Steven Peters had worked for the pharmaceutical company since 2001 and worked from his home in Indianapolis, marketing products to doctors and healthcare professionals. He injured his neck and shoulder and eventually filed an injury claim in 2002, and then had surgery and took time off from work starting in December 2002.

Eventually, the company decided to replace Peters in April 2003 and Peters sued in federal court on FMLA claims and state claims. The company argued that Peters wasn't eligible for FMLA based on a provision that excluded workers at worksites with less than 50 employees, but Peters argued that he didn't receive the 12 weeks he was required and Gilead was estopped because of employee handbook guidelines detailing the time off.

Judge John D. Tinder, who has since joined the 7th Circuit, concluded that Peters had not established the elements of equitable estoppel and granted summary judgment for Gilead.

The 7th Circuit wrote that Judge Tinder didn't address whether Gilead's promises are actionable as a contract or under promissory estoppel, though it pointed out that it was understandable because the parties focused arguments on a different aspect of the law and the equitable estoppel theory as a means of establishing eligibility under FMLA.

"As we have explained, however, using equitable estoppel to block an employer from asserting a statutory defense to the FMLA liability is not the same as using promissory estoppel to enforce a promise by an employer to allow 12 weeks of medical leave," Judge Diane Sykes wrote. "Promissory estoppel is a well-established state-law remedy; on the other hand, the availability of equitable estoppel to block a statutory defense to FMLA eligibility has been assumed but not decided in this circuit. We think the prudent course is to remand this case for consideration of Gilead's liability under state law."

She added that the leave provisions in Gilead's employee handbook may be enforceable as a contract under Indiana law, and at the least, are promises giving rise to recovery under promissory estoppel.