Court Deems Company Successor Under FMLA For Taking Over Government Contract Previously Held by Competitor

Court Deems Company Successor Under FMLA For Taking Over Government Contract Previously Held by Competitor

The U.S. District Court for the Eastern District of Virginia recently denied an employer’s motion for summary judgment on an employee’s claim of retaliation under the Family Medical Leave Act (FMLA).  In a memorandum opinion issued last month in the matter of Osei v. Coastal International Security, Inc. (No. 1:13-cv-01204), Judge Liam O’Grady ruled that the plaintiff, Naomi Osei, was an “eligible employee” under the FMLA, and that there were “sufficient facts in dispute to support” her claim that her employer, Coastal International Security, Inc. (“Coastal”), unlawfully took adverse action against her in violation of the Act’s anti-reprisal provisions.  The case is now set to proceed to a trial by jury later this month.

The plaintiff worked as a security guard at the General Services Administration (GSA) warehouse in Springfield, Virginia, pursuant to a government contract held by Coastal.  The company had taken over the GSA security contract from Osei’s previous employer, American Security, and had retained much of the same work force on the contract, including Osei and her supervisor.  Altogether, Osei had been working at the Springfield facility since December 2009 when she was hired by Coastal on May 1, 2012.

According to the plaintiff, in July 2012 she began making periodic requests for leave to care for her young daughter, who suffered from apparent pulmonary issues requiring medication and occasional hospitalization.   In January 2013 and March 2013, the plaintiff took leave on several occasions; Coastal treated most of these absences as “excused.”  On April 4, 2013, Osei was written up for allegedly failing to report an early-morning fire alarm, and for failing to follow proper procedures for handling state and national flags during a storm.  According to the employer, Osei became irate when presented with the PARs and began “aggressively yell[ing]” at her supervisor.  She was subsequently suspended from work on April 7, 2013, ostensibly for violating the company’s workplace violence policy.

In her complaint, Osei alleged that the adverse action taken by Coastal was causally related to her decision to retain counsel in connection with her FMLA benefits, and that the company was retaliating against her for opposing its attempts to “deny or discourage her use of FMLA leave.”  On September 17, 2014, Coastal moved for summary judgment, arguing that Osei was not an “eligible employee” under the FMLA when she was absent from work to care for her daughter, and therefore was not covered by the protections of that Act.

The FMLA defines “eligible employee” as an individual who has been employed by the employer for at least 12 months, and who has worked at least 1,250 hours for the employer during that time.  Here, the defendant argued that because Osei did not become an employee of Coastal until May 1, 2012, she had not been employed by the company for 12 months when she made her FMLA requests, or when Coastal took adverse action against her, or when her attorney subsequently wrote a letter to Coastal on her behalf.  In response, the plaintiff argued that Coastal was the “successor in interest” to her previous employers at the same job site where she’d worked for more than two years, meaning her tenure for the other contractors should be tacked onto her stint with Coastal.

Judge O’Grady agreed with this “successor in interest” analysis.  Noting that Coastal had taken over the same GSA contract to which Osei had been assigned previously, and that her tasks, duties, equipment, location, and supervisory structure had remained virtually unchanged, the Court found that Osei’s employment had been “continuous” since December 2009.  The Court also concluded that “equitable considerations” and the fundamental purpose of the FMLA weighed heavily in Osei’s favor, as failing to find successorship in this instance could undermine employees’ ability to address the medical needs of their families.

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