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Court: failure to reinstate after leave is wrongful termination

A federal judge has ordered DS Waters of America Inc., operating as Sparkletts, a bottled water company familiar to most Californians, to reinstate one if its delivery drivers and compensate him for back pay and undue medical expenses after it failed to reinstate him after he took approved leave under the federal Family and Medical Leave Act. The unusual aspect of this case is that the company he worked for when he took the leave was bought by another company by the time he was ready to return. Nevertheless, the Department of Labor says the failure to reinstate the man constitutes wrongful termination under federal law.

DS Waters, based in Georgia, acquired Arizona-based O Premium Waters shortly after the driver began his leave. According to the Labor Department, DS Waters -- Sparkletts -- then hired 87 percent of the Arizona-based company’s drivers but specifically excluded the driver who was on lawful FMLA leave.

Did the new owners have a legal responsibility to respect the previous company’s grant of FMLA leave? Yes, the DOL determined. When one company buys another, the transaction doesn’t just wipe out the legal responsibilities of the company that was bought. Just as its existing contracts, debts and tax obligations become the responsibilities of the purchasing company, so do its legal responsibilities, such as the duty to provide FMLA leave to employees without adverse job consequences.

The result for this man of Sparkletts’ failure to carry out that duty was not only the wrongful termination of his employment, but also of his health insurance. He ended up having to pay $31,464 in out-of-pocket medical expenses.

Through a consent decree with the DOL, the company has agreed to reimburse the man for those medical bills and pay him $26,871 in back wages. It will also offer to rehire him with full credit for his seniority in an equivalent job with equivalent benefits.

“An employee was suddenly left without a job, paycheck or medical benefits when the company changed hands. He and his family suffered emotional and financial stress at a time when they could least afford it,” explained a spokesperson for the DOL’s Wage and Hour Division. "This case is a real victory for workers and families seeking justice against unlawful employment practices.”

Source: U.S. Department of Labor Wage and Hour Division press release, "Judge orders Arizona worker be offered reinstatement, paid back wages and expenses under Family and Medical Leave Act following US Labor investigation," April 17, 2013

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Law Offices of Allan A. Sigel, P.C.

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