A Ninth Circuit panel ruled yesterday in Sanders v. City of Newport that when an employer opts to not restore an employee who was on FMLA leave to her former position, that the burden falls on the employer to demonstrate that such action was justified.

In Sanders, the plaintiff, a billing clerk, started feeling ill after an office move to a new location and the use of new low-grade billing paper. She was diagnosed with multiple chemical sensitivity, and took FMLA leave. Upon being cleared to work by her doctor, the City terminated her employment on the grounds that it could not guarantee a safe workplace for her given her sensitivity to chemicals. In instructing the trial court on plaintiff’s FMLA interference claims, the trial court placed the burden on plaintiff to prove that the employer lacked reasonable cause to reinstate her. On that instruction, the jury rendered a decision for the City on all claims.

The plaintiff appealed on the grounds that the instruction improperly placed the burden of proof on her, and the Ninth Circuit panel, consistent with rulings in the Eighth, Tenth and Eleventh Circuits, agreed. The Court based its decision on the plain text of regulations stating that “[a]n employer must be able to show, when an employee requests restoration, that the employee would not otherwise have been employed if leave had not been taken in order to deny restoration to employment.” The court held that the error was not harmless, and remanded the case for a new trial.

While this case was remanded based on a technicality in the jury instructions, and may yet culminate in an employer verdict, it provides a good reminder for employers that if they decide to deny restoration of employment to an employee following protected FMLA leave, it will be their burden to demonstrate that they had objective justification for the decision. Even if the decision was made in good faith, lack of objective justification may serve to limit damages, but not liability.