A lower raise and smaller bonus were FMLA retaliation, court rules

In 2013, Jeffrey began working for the company. Near the end of each year, the company gave Jeffrey an annual salary increase and bonus that would go into effect the following calendar year.

From October to December of 2020, Jeffrey took leave under the federal Family and Medical Leave Act (FMLA) for mental health conditions. That year, the company gave him a smaller bonus and lower salary increase — a more than 40 percent reduction in bonus and salary increase compared to previous years.

In May 2021, Jeffrey asked for more leave, then an extension, followed by a request to work from home as an accommodation. Because his requested leave was unlimited, the employer denied it and fired Jeffrey. He sued, claiming that the employer violated the FMLA by giving him a lower salary increase and smaller bonus in 2020 because he took FMLA leave. In short, he claimed retaliation.

The employer argued in court that the decreases weren’t an adverse employment action, and that the FMLA leave wasn’t the reason for the smaller increases.

The court didn’t buy the employer’s argument. It held that Jeffrey engaged in protected activity when he took leave and asked for an accommodation. The ruling demonstrated that a reasonable person could find that the lower bonuses and smaller salary increases could have discouraged someone from requesting FMLA leave or asking for an accommodation, which would keep them from engaging in protected activity.

The court also found the timing of the lower amounts was unusually suggestive, as they happened right after he took FMLA leave.

Steidle v. United States Liability Insurance Co., Inc., Third Circuit Court of Appeals, No. 24-2999, June 24, 2026.

Court decisions are based on the specific facts presented and each court’s interpretation of the law. Because courts may reach different conclusions, similar situations can lead to different outcomes. Employers should avoid relying on a single case as definitive guidance and instead assess each situation carefully, considering applicable laws, and seeking advice when needed.

Key to remember: Employers are prohibited from taking adverse employment actions because employees exercise their FMLA rights, and giving employees a smaller pay increase or bonus could be seen as adverse employment actions.