In Peters v. Gilead Securities Inc., the 7th Circuit sent out a warning to employers using employee handbooks, that their provisions may be held legally binding due to the contract liability theory of promissory estoppel. Specifically, the court ruled that although a company may not be subject to the Family Medical Leave Act they may still be liable if their Employee Handbook states employees are eligible for such a leave.
Gilead’s Employee Handbooks discussed a “Family and Medical Care Leave” policy that would be provided to all employees. This policy set forth that employees, who had worked for Gilead for at least 12 months and 1,250 hours in the last 12 months, were entitled to take up to a 12 week leave of absence to care for ill family members or themselves in which their position at the company would be secure. The provision in the handbook tracked the language that governed the eligibility of an employee to receive a similar leave under the Family Medical Leave Act (FMLA). However, the handbook in disclosing the eligibility for the leave did not include an exception referred to as the 50/75 provision that applied to FMLA leave. Under the FMLA 50/75 provision, employees who are employed at worksites where their employer employs less than 50 employees in a 75 mile radius are not eligible for FMLA leave. 29 U.S.C. § 2611 (B)(ii).
Peters involved an employee of Gilead who suffered a shoulder injury. On December 5, 2002, Peters took what he thought was FMLA leave in order to undergo corrective surgery. The day after he left for his leave he received a letter from his employer discussing both that the Family Medical Leave Act went into effect on August 5, 1993 and how an employee was eligible to take FMLA leave. This letter, like the employee handbook, mentioned nothing regarding a 50/75 exception. The letter informed Peter that if he returned to work before “[his] FMLA” leave was expired he would get back his position. The letter stated that he would have to return to work by February 28, 2003. Peter returned to work on December 16, 2002 but had to take another leave when his medical treatment changed. Again he received a letter from his employer calculating when he would have to return to work from his FMLA leave to keep his position- this time subtracting the time he already took off during his first leave. Peters was prepared to return to work before his 12 weeks expired but was informed that his position was given to another employee. Peters was offered another position but refused it and was ultimately terminated, this suit was brought in response to his termination.