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Key Employee Designation Under the FMLA and Notice of Substantial and Grievous Economic Injury to Employer

Author: Steven J. Luckner, Ogletree Deakins

When to Use This Letter

Under limited circumstances where restoration to employment will cause an employer "substantial and grievous economic injury" to its operations, an employer may refuse to reinstate certain highly-paid, salaried "key" employees. In order to do so, the employer must first notify the employee in writing of his or her status as a "key" employee (as defined by FMLA). The employer must also fully inform the employee of the potential consequences with respect to reinstatement and maintenance of the employee's health benefits if the employer determines that substantial and grievous economic injury to the employer's operations will result if the key employee is reinstated after FMLA leave (see Key Employee Notification Under the FMLA Letter). Once the employer determines that substantial and grievous economic injury to its operations will result, the employer must send this type of letter, notifying the employee of its determination. The letter must include the reasons for denying job restoration, and provide the employee a reasonable opportunity to return to work after so notifying the employer.