Overview
This article summarizes an employer liability issue that arose when an employee on protected family or medical leave was discovered working elsewhere. Courts have recognized that federal and state leave laws create specific procedures employers must follow before shortening or denying leave. Employers who try to impose separate rules or informal practices risk violating those protections.
Key takeaways
- Statutory leave (like FMLA and state equivalents) comes with required procedures employers must follow before altering or ending leave.
- Employers should treat employees on leave the same as other employees when enforcing neutral workplace policies.
- If an employer doubts an employee’s need for leave, the employer must use the authorized administrative and medical-review processes rather than unilateral rules.
How it works
When an employee requests or takes protected leave for a serious health condition, the employer may request medical certification and may seek clarification or a second opinion under the law’s procedures. Employers cannot simply invent or apply separate rules—such as a blanket ban on any outside work during leave—unless those rules are applied consistently to all employees and comply with statutory protections.
For background on the leave protections and employer obligations, see Family and Medical Leave Act (FMLA) Overview, which explains core rights and employer responsibilities under federal and related state programs.
What it may cover (and what it may not)
Protected leave programs generally cover job-protected leave for a qualifying serious health condition, caregiving for a family member, and similar situations. Employers are permitted to request medical certification and to follow established procedures for verification and return-to-work assessments.
These protections do not allow an employee to misuse leave without consequence, but employers must rely on authorized processes—medical certification, second opinions, and interactive discussions—rather than unilateral investigations or ad hoc policies that conflict with the leave statute.
Common mistakes to avoid
One common error is applying a stricter rule to employees on leave than to active employees. A policy that forbids secondary employment only for those on leave can itself be unlawful.
Another mistake is treating an employee’s off-duty activities as conclusive evidence that they cannot have a serious health condition for their primary job. Incapacity is job-specific: working a less-demanding job or conducting limited outside work does not automatically negate a need for accommodation or leave for the regular position.
Employers should also avoid relying on arbitration outcomes without checking whether the arbitrator correctly applied governing law; courts can review and overturn arbitrations that misapply statutory protections.
For practical guidance when a termination or discipline decision is being considered, consult resources on employee termination and rights such as Understanding Employee Termination and Rights.
Questions to ask an agent
Ask whether your business’s leave and secondary-employment policies have been reviewed for compliance with federal and state leave laws.
Ask what documentation and procedures the employer should use before shortening or denying leave, including medical certification and second-opinion processes.
Ask how to handle discipline or termination decisions when an employee on leave is found working elsewhere, and whether existing policies have been applied consistently across the workforce.
Next steps
Review your written leave policies to ensure they apply neutrally to all employees and align with statutory procedures for certification and return-to-work decisions.
Train supervisors to avoid informal investigations or unilateral rulings about an employee’s fitness for duty and to follow the prescribed administrative steps when doubt arises.
If you need personalized help, discuss your situation with an insurance representative or talk to an agent to review coverage and risk-management steps for employment practices exposure: talk to an agent.
Frequently Asked Questions
Can an employer ban all outside work while an employee is on leave?
Not if that rule is applied only to employees on protected leave; policies must be applied consistently and not conflict with statutory leave protections.
Does outside employment always mean an employee is fit for their regular job?
No. Capacity is defined relative to the employee's regular duties, so limited outside work does not automatically negate a need for leave or accommodation.
What should an employer do if it doubts a medical certification?
Employers should follow the statutory process—request clarification, seek a second opinion if allowed, or pursue an independent medical examination—rather than acting unilaterally.
Are arbitration decisions final if they conflict with statutory protections?
Court review may overturn arbitration awards that misapply governing law, so arbitration is not always the final word if the law was misapplied.