Erdman v. Nationwide Ins. Co.

• Citation: 582 F.3d 500
• Decision Date: 23 September 2009
• Docket Number: No. 07-3796.,07-3796.
• Parties: Brenda L. ERDMAN, Appellant, v. NATIONWIDE INSURANCE COMPANY, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

582 F.3d 500

Brenda L. ERDMAN, Appellant, v. NATIONWIDE INSURANCE COMPANY, Appellee.

No. 07-3796.

United States Court of Appeals, Third Circuit.

Argued November 17, 2008.

Filed: September 23, 2009.

Patricia C. Zucker, [Argued], Daley Zucker Meilton Miner & Gingrich, Wormleysburg, PA, Attorneys for Appellant.

Donald R. Keller, [Argued], Vladimir P. Belo, Bricker & Eckler, Columbus, OH, Attorneys for Appellee.

Before: SCIRICA, Chief Judge, FUENTES and HARDIMAN, Circuit Judges.

OPINION OF THE COURT

HARDIMAN, Circuit Judge.

Brenda Erdman challenges the District Court's summary judgment in favor of her former employer, Nationwide Insurance Company. The principal issue on appeal — whether Erdman accumulated sufficient hours to qualify for leave under the Family and Medical Leave Act (FMLA) — raises questions of first impression in this Court.

I.

Our review of the District Court's grant of summary judgment is plenary, viewing the facts in the light most favorable to the nonmoving party. Summary judgment is appropriate only if there are no genuine issues of material fact such that the movant is entitled to judgment as a matter of law. See McTernan v. City of York, 564 F.3d 636, 646 (3d Cir.2009).

A.

Nationwide hired Erdman in 1980 and she held various full-time positions until 1998, when she asked to work part-time so she could care for her daughter Amber, who was born with Down Syndrome. Nationwide granted this request, as well as Erdman's request four years later to switch to a four-day work week, which rendered Erdman a non-exempt employee under federal law. According to Patty Sarno, Erdman's supervisor at the time, Erdman was a reliable employee who regularly worked extra hours outside the office. Indeed, Sarno consistently authorized payment for these hours or allowed Erdman to use them as "comp" time.

In early 2002, soon after Erdman switched to a four-day work week, Sarno informed her that she should "put in the hours that ... you're supposed to put in and nothing more than that." In September 2002, Erdman e-mailed Stella Getgen, who had replaced Sarno as Erdman's supervisor some five months earlier, to request clarification whether she was still allowed to work extra hours for use as "comp" time. There is no record of any response by Getgen, who, despite this e-mail, claims that she first heard the phrase "comp" time in a January 2003 meeting with Erdman regarding a discrepancy in Erdman's accrued vacation time. After Erdman explained that she had used "comp" time, Getgen conceded that Erdman's vacation time calculation was correct, and made no objection to her use of "comp" time.

A week later, on January 28, 2003, Getgen e-mailed Erdman to admonish her for three reasons: (1) Erdman's overtime was unapproved; (2) Erdman failed to consult Getgen before visiting a policyholder's residence; and (3) employees in Erdman's position were not authorized to conduct fieldwork. Getgen concluded: "As much as we are tempted to do a `simple' field investigation, there are legal and logistical reasons that prohibit us from doing so." Two weeks later, on February 10, 2003, Getgen for the first time advised Erdman that she could no longer use extra hours for "comp" time.

Soon after Getgen admonished her, Nationwide informed Erdman that her part-time position would be eliminated, but she could work full-time instead. Erdman accepted the full-time position, but Nationwide claims that Erdman became angry and erratic because she was unhappy with her return to full-time status. Over the next several weeks, Nationwide contends that Erdman inappropriately questioned other employees about confidential salary information, encouraged others to work slowly to avoid driving up production standards, made malicious accusations against Getgen, and committed various other acts of insubordination. Erdman disputes these claims.

At the time Erdman accepted the full-time position, she sought clarification that Nationwide would honor her previously-approved request for vacation during the entire month of August, which Erdman had typically taken to prepare Amber for school. Nationwide informed Erdman that it was unlikely she would be allowed to take vacation in August because of the pressing need for full-time employees in light of the unusually large number of employees requesting vacation that month. Erdman announced that if she could not use vacation time in August, she would request FMLA leave instead.

On April 14, 2003, Erdman began working full-time and a week later she submitted paperwork requesting FMLA leave from July 7 to August 29. A human resources employee responded to this request by telling Erdman that "as far as the FMLA, I probably don't see any problems with this."

Nationwide fired Erdman on May 9, 2003, citing her purported behavioral problems which culminated on May 8 when Erdman used profanity during a phone conversation that was monitored for quality control purposes. Company policy states that personal calls are not monitored, and Erdman prefaced a personal call with a profane disclaimer: "This is a personal call and should not be reviewed for quality purposes, assholes."

B.

Alleging that Nationwide's stated motives were pretextual and that she was actually fired for requesting FMLA leave, Erdman brought federal claims under the FMLA and the Americans With Disabilities Act (ADA).¹ Initially, the District Court granted summary judgment on the FMLA claim, finding that Erdman could not establish a cause of action — either for interference or retaliation — because she had not accumulated the 1,250 hours necessary to qualify as an eligible employee under the statute. The District Court also granted summary judgment on the ADA claim, but only to the extent that it was based on a failure to accommodate theory. Nationwide was denied summary judgment on Erdman's ADA "association" claim.

Nationwide filed a motion for reconsideration. After briefing and oral argument, the District Court reversed itself and granted Nationwide summary judgment on the ADA claim in its entirety, concluding that the ADA's "association" provision prohibits only employment decisions based on "unfounded stereotypes and assumptions against employees who associate with disabled people." Erdman v. Nationwide Ins. Co., 621 F.Supp.2d 230, 235-36 (M.D.Pa.2007)(quoting Den Hartog v. Wasatch Acad., 909 F.Supp. 1393, 1400 (D.Utah 1995)). Finding that Nationwide's actions were motivated by Erdman's prior modifications to her work schedule instead of stereotypes or unfounded assumptions, the District Court held Erdman could not establish an ADA "association" claim.

Erdman filed this timely appeal, arguing that the District Court erred in granting summary judgment on the FMLA and ADA claims. We have jurisdiction pursuant to 28 U.S.C. § 1291.

II.

An employee is eligible for FMLA leave if she has worked "at least 1,250 hours of service with [her] employer during the previous 12 month period." 29 U.S.C. § 2611(2)(A). According to Erdman's records, she worked 1,298.25 hours in the relevant period, including 118.5 hours from home. In its calculation, the District Court excluded 57 hours worked from home prior to Erdman's September 2002 e-mail to Getgen asking whether she was allowed to work extra hours for use as "comp" time, and 20 hours worked from home after Getgen's January 2003 e-mail to Erdman admonishing her for doing fieldwork. The District Court found that Nationwide could not have had constructive notice of any hours Erdman worked from home prior to the September 2002 e-mail because Erdman had previously been told to "put in the hours that ... you're supposed to put in and nothing more than that." The District Court also found that constructive notice was dispelled by the January 2003 e-mail. Consequently, the District Court counted only 41.50 of the 118.50 hours Erdman worked from home in calculating the total number of hours she worked in the previous year, which left Erdman 28.75 hours short of FMLA's threshold requirement.

A.

The first question is whether a reasonable jury could have concluded that Nationwide had actual or constructive notice that Erdman worked at least 1,250 hours, making her eligible under the FMLA. For FMLA purposes, all work that "the employer knows or has reason to believe ... is being performed" counts toward the threshold requirement. 29 C.F.R. § 785.12. The parties agree that hours worked off-site or beyond an employee's regular schedule count if "[the employer] knows or has reason to believe that an employee is continuing to work extra hours." 29 C.F.R. § 785.11. "[A]n employer need not have actual knowledge of such off-site work; constructive knowledge will suffice." Holzapfel v. Town of Newburgh, 145 F.3d 516, 524 (2d Cir.1998).

Nationwide does not dispute that Erdman regularly worked outside of the office for many years, and that Sarno consistently authorized payment for these hours or allowed Erdman to use them as "comp" time. Nevertheless, Nationwide cites three reasons why it had no actual or constructive knowledge that Erdman continued to do so during the relevant time period. First, Sarno testified that when Erdman's position changed from exempt to non-exempt status in 2002, she told Erdman to "put in the hours that ... you're supposed to put in and nothing more than that." Second, Sarno was the only one with personal knowledge that Erdman worked outside the office, and Sarno was replaced by Getgen in 2002. Finally, Getgen told Erdman in January 2003 that she was "not authorized to work outside [her] standard work hours."

Despite the superficial appeal of Nationwide's arguments, they fail to persuade because they do not account for Erdman's use of "comp" time. To be sure, Nationwide was on record that Erdman could not be paid for any additional hours. But this begs the question whether she could continue — as she had done for so many years in the past — to work outside the office to accrue "comp" time....