Employer used an algorithm to detect FMLA fraud

Ferreting out leave abuse

From the employer’s perspective, using FMLA leave solely to avoid working on or around holidays, weekends, vacations, and rest days constituted dishonesty in violation of company policy.

Jolanda from HR had an automated system that ferreted out FMLA misuse. Each week, the system looked back at every employee’s FMLA usage over the preceding 12 weeks. If an employee had 5 suspicious uses of FMLA leave within 12 weeks, the algorithm flagged that employee. A suspicious use was any FMLA use on a weekend and any FMLA use that was taken immediately before or after a day off.

If Jolanda believed that an employee’s actions amounted to FMLA “pattern use,” she would conduct an individualized review. This involved reviewing each employee’s:

• Medical information,
• Absences that were identified as pattern use, and
• Statuses of those absences.

To further investigate this FMLA usage, Jolanda used a modified version of the algorithm, which flagged any employee who had used FMLA leave on 4 of the 10 most recent holidays and other special occasions (such as Black Friday and Christmas Eve). Jolanda removed from the list anyone whose leave involved cancer, a terminal illness, or was about to give birth.

Court disagrees with employer

Despite dozens of employees being terminated for misusing their leave, only three of the employees continued their lawsuit. In court, the judge pointed out that the algorithm didn’t show their total FMLA leave, just their holiday use. It didn’t include non-holiday use, so it didn’t give the whole picture.

If an employee used FMLA leave for 10 days in 12 months, and 5 of those days were holidays, an employer might have reason to suspect misuse. If an employee used FMLA leave for 60 days in 12 months and 5 of those days were holidays, there would be much less reason for an investigation. The employer focused on employees’ use of FMLA leave on holidays without considering the context of each situation.

The employer argued in court that it acted on its honest belief that the employees were abusing FMLA leave.

The employees argued that the company’s stated reason for the discipline was untrue and that retaliation was the actual reason for the discipline. The employees were given an internal hearing, but the hearings were suspicious, as a company manager acted both as judge by conducting the hearing and ruling on objections, and as prosecutor by questioning witnesses. The company witness told the hearing manager which questions the prosecutor (the same manager) should ask.

Employees, on the other hand, weren’t allowed to have legal counsel present, nor were there formal rules of evidence that governed the hearings. They also didn’t know the questions in advance, as the employer did.

In denying the employer’s request to have the entire case dismissed, the court determined that the employer’s decision process wasn’t credible and its reliance on that process was, therefore, not honestly held. It sent the case to a jury.

Burgess, et al., v. CSX Transportation, Inc., District of Maryland, No. JKB-18-0744, July 6, 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 may use procedures and tools to discern FMLA leave abuse, but they have to use those procedures and tools through the lens of the big picture.