Employees will generally maintain their rights under FMLA even if their current employer merges with or is acquired by another company. The original company must be a covered employer under FMLA for the employee to have the right to take up to 12 weeks of leave (a) for the birth or adoption of a child, (b) for the employee’s own serious illness, or (c) for the illness of a dependent who requires care. A covered employer employs 50 or more employees within 75 miles of the work site during at least 20 workweeks in the current or preceding year. If a company that falls under this definition merges or is acquired, the newly formed company will usually be considered a successor-in-interest and, therefore, the rights will most likely transfer.
The conditions that must be met for the new company to be considered a successor-in-interest are the same conditions that were established under Title VII of the Civil Rights Act and under the Vietnam Era Veterans Readjustment and Assistance Act of 1974. No single factor can determine whether a company is a successor-in-interest. Instead, the circumstances are always considered in their entirety. Those conditions, as stipulated in the Final Regulations of the DOL (1993), are as follows:
If the new company is determined to be a successor-in-interest, the employees from the previous employer cannot be deprived of their FMLA rights, even if the new company is not considered a covered employer. If the successor employer is covered under FMLA, the time the employees worked for the previous employer must also be counted when FMLA eligibility is computed. For example, an employee who worked 10 months and 1,200 hours with the original employer would have to work only 2 more consecutive months and 50 more hours with the new employer in order to meet the 12 months and 1,250 hours eligibility requirement for FMLA leave.
An employee who was eligible to take leave and had notified the previous employer of that intention may not be denied leave by the successor employer. By the same token, any employees who began their FMLA leave with the preceding employer must be allowed by the successor employer to continue the leave. In addition, all other requirements that apply to covered employers would still apply to the successor-in-interest with regard to those FMLA leaves earned before the merger or acquisition, even if the successor employer is not covered. Those aspects include (a) continuing required benefits, (b) reserving the employee’s original or a substantially equivalent position, and (c) refraining from discriminating in any way against employees who have exercised their rights under FMLA.
Please Note: This material is provided as general information and is not a substitute for legal or other professional advice. Contact the Knowledge Center for more information.
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