Repa, Alice M. v. Roadway Express Inc ( 2007 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 06-2360
ALICE M. REPA,
Plaintiff-Appellee,
v.
ROADWAY EXPRESS, INC.,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Eastern District of Wisconsin
No. 03 C 1071—Charles N. Clevert, Jr., Judge.
____________
ARGUED DECEMBER 7, 2006—DECIDED FEBRUARY 26, 2007
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Before BAUER, MANION, and SYKES, Circuit Judges.
MANION, Circuit Judge. Alice Repa (“Repa”) sued her
employer, Roadway Express, Inc. (“Roadway”), alleg-
ing Roadway violated the Family Medical Leave Act
(“FMLA”), 29 U.S.C. § 2601, et seq. Specifically, Repa
alleged that Roadway improperly required her to use
sick and vacation leave while she was using FMLA leave
and receiving disability benefits. The district court granted
Repa’s summary judgment motion. Roadway appeals,
and we affirm.
2 No. 06-2360
I.
Roadway is a commercial trucking company that is a
member of a multi-employer bargaining unit, which is
party to a collective bargaining agreement with the Interna-
tional Brotherhood of Teamsters. That agreement, known
as the National Master Freight Agreement and Central
Region Local Cartage and Over-the-Road, Motor Freight
Supplemental Agreement (“NMFA”), requires employers,
including Roadway, to make financial contributions to the
Wisconsin Health Fund (“WHF”). The WHF is a Taft-
Hartley trust fund established to provide, in part, “Health
and Welfare Benefits,” which include Loss of Time Dis-
ability Benefit, a short-term disability benefit program for
employees covered by the NMFA. This benefit is available
to an employee who is “disabled and cannot work” due to
an injury incurred outside of work. A Board of Trustees,
comprised of four employer and four employee representa-
tives who are parties to the NMFA either individually or
through their union, administers the WHF. NMFA also
provides benefits for sick leave.
Repa, an employee of Roadway, suffered a non-work-
related injury that required surgery and a six-week absence
from work. Repa applied for and was granted Loss of Time
Benefit through the WHF, receiving $300 per week for six
weeks. On May 23, 2003, the same day that she applied for
disability benefits, Repa notified Roadway of her need for
leave under the FMLA, requesting leave from May 19, 2003
through June 30, 2003. Roadway granted Repa’s request
and notified her that she was required to “substitute any
accrued paid leave for any unpaid FMLA leave.” Upon
Repa’s return from leave, Roadway paid her for five sick
days and two weeks of vacation. Repa received this pay in
addition to the $300 per week she received through the
WHF.
No. 06-2360 3
Repa filed suit alleging that Roadway had violated the
FMLA by requiring her to use her sick and vacation leave
days when she was receiving disability benefits during her
FMLA leave. The parties filed cross motions for summary
judgment. Citing 29 C.F.R. § 825.207(d)(1), Repa argued
that because she was receiving temporary disability
benefits through the WHF, the FMLA “provision for sub-
stitution of paid leave is inapplicable,” and therefore
Roadway should restore her vacation and sick time. In its
motion for summary judgment, Roadway asserted that
the FMLA and its regulations permit an employer to
substitute paid leave for FMLA leave. Roadway argued
that 29 C.F.R. § 825.207(d)(1) was not applicable to Repa’s
claim because it precluded paid leave substitution only
when an employee was receiving disability benefits for
the birth of a child. Roadway also contended that be-
cause the disability benefits Repa received were not from
an employer disability plan, the substitution was appropri-
ate. The district court granted Repa’s motion and denied
Roadway’s motion, concluding that because Repa received
disability benefits from the WHF, Roadway could not
require Repa to substitute her paid leave for her FMLA
leave. See Repa v. Roadway, No. 03-C-1071, 2005 WL
2275939, at *9 (E.D. Wisc. Sept. 19, 2005). Roadway appeals,
asserting the arguments it raised below and that 29 C.F.R.
§ 825.207(d) is invalid because it conflicts with the FMLA.
II.
We review the district court’s grant of summary judg-
ment de novo. Cady v. Sheahan, 467 F.3d 1057, 1060 (7th Cir.
2006) (citation omitted). Summary judgment is proper
when the “pleadings, depositions, answers to interrogato-
ries, and admissions on file, together with the affidavits, if
4 No. 06-2360
any, show that there is no genuine issue as to any material
fact and that the moving party is entitled to a judgment as
a matter of law.” Fed. R. Civ. P. 56(c).
The FMLA guarantees qualifying employees twelve
weeks of unpaid medical leave each year. Ragsdale v.
Wolverine World Wide, Inc., 535 U.S. 81, 84 (2002). The
purpose of the FMLA is, in part, “to entitle employees to
take reasonable leave for medical reasons . . . in a man-
ner that accommodates the legitimate interests of em-
ployers.” 29 U.S.C. § 2601(b)(2), (3). An employer is not
required to pay an employee while the employee is on
FMLA leave, 29 U.S.C. § 2612(c), though an “employee may
elect, or an employer may require the employee, to substi-
tute any of the accrued paid vacation leave, personal leave,
or family leave of the employee for leave provided,” under
the FMLA, 29 U.S.C. § 2612(d)(2). This substitution, though,
is limited by Department of Labor regulations. Specifically
29 C.F.R. § 825.207(d)(1) provides:
Disability leave for the birth of a child would be
considered FMLA leave for a serious health condition
and counted in the 12 weeks of leave permitted under
FMLA. Because the leave pursuant to a temporary
disability benefit plan is not unpaid, the provision for
substitution of paid leave is inapplicable. However, the
employer may designate the leave as FMLA leave
and count the leave as running concurrently for pur-
poses of both the benefit plan and the FMLA leave
entitlement. If the requirements to qualify for pay-
ments pursuant to the employer’s temporary disabil-
ity plan are more stringent than those of FMLA, the
employee must meet the more stringent requirements
of the plan, or may choose not to meet the require-
ments of the plan and instead receive no payments
No. 06-2360 5
from the plan and use unpaid FMLA leave or substi-
tute available accrued paid leave.
29 C.F.R. § 825.207(d)(1). The regulation also provides: “As
the workers’ compensation absence is not unpaid leave,
the provision for substitution of the employee’s accrued
paid leave is not applicable.” 29 C.F.R. § 825.207(d)(2).
In this case, the parties do not dispute that Repa was
receiving disability benefits while on FMLA leave. The
parties dispute, however, whether Roadway “may require
[Repa], to substitute any of the accrued paid vacation leave,
personal leave, or family leave of the employee for leave
provided,” 29 U.S.C. § 2612(c), while she was receiving
disability benefits from the WHF while on FMLA leave. As
noted, Repa relies on 29 C.F.R. § 825.207(d)(1), which
provides: “Because the leave pursuant to a temporary
disability benefit plan is not unpaid, the provision for
substitution of paid leave is inapplicable.”
Roadway argues that § 825.207(d)(1) does not apply to
Repa’s case, contending it applies only to disability leave
for the birth of a child. Roadway’s argument rests on the
language of the first sentence of the regulation. However,
the remainder of the regulation belies Roadway’s posi-
tion. As noted above, the regulation provides that “[b]e-
cause the leave pursuant to a temporary disability bene-
fit plan is not unpaid, the provision for substitution is
inapplicable.” Id. While the first sentence of this regulation
focuses on “disability leave for the birth of a child,” none
of the other three sentences discusses “disability leave for
the birth of a child.” Additionally, the remaining three
sentences of the regulation do not reference the first
sentence, but each addresses temporary disability benefit
plans. Accordingly, we reject Roadway’s argument that
the regulation applies only to disability leave for the birth
of a child.
6 No. 06-2360
Roadway also argues that the regulation does not apply
to Repa because § 825.207(d)(1) applies only to leave
benefits paid by an employer’s temporary disability bene-
fit plan and not a third-party plan. Roadway contends
that the disability benefits Repa received from the WHF
were third-party plan benefits, and consequently,
§ 825.207(d)(1) is inapplicable. However, as the district
court in this case correctly noted, “[n]othing in the sec-
ond sentence of the regulation limits this outright pro-
hibition [of substitution of paid leave] where the tem-
porary disability benefit plan is the employer’s plan.” Repa,
No. 03-C-1071, 2005 WL 2275939, at *6. Therefore, the fact
that the WHF Board of Trustees manages the plan is
irrelevant.
Alternatively, Roadway asserts that § 825.207(d) contra-
venes Congress’s intent and is therefore invalid. See
Chevron v. Nat’l Res. Def. Council, Inc., 467 U.S. 837, 842-43
(1984). Roadway argues the FMLA’s purpose is to provide
twelve weeks of leave and, because it does not restrict an
employer’s right to substitute paid leave, the regulation
“effects an impermissible alteration of the statutory
framework and cannot be within the Secretary’s power to
issue regulations ‘necessary to carry out’ the Act.” Ragsdale,
535 U.S. at 96. Roadway further argues that the effect of the
regulation permits employees to extend their leave beyond
the twelve weeks provided by the FMLA, which upsets the
balance struck by Congress in trying to meet the needs of
families and employers when it devised the twelve week
figure. See id. at 93-94. Repa responds that Roadway has
waived its right to challenge the validity of the regulation
because it did not present this argument in the district
court.
Before addressing the regulation’s validity, we must
first determine whether Roadway has waived its right
No. 06-2360 7
to assert this argument on appeal. “Waiver is the inten-
tional relinquishment and abandonment of a known right,
which precludes appellate review.” United States v. Parker,
469 F.3d 1074, 1079 (7th Cir. 2006) (citations omitted). At
oral argument, Roadway’s counsel admitted that the
regulations were considered and argued, although it did
not challenge their validity under the statute. Because
Roadway addressed the regulation’s application, but did
not argue it was invalid before the district court, we
conclude that Roadway waived its right to challenge
its validity on appeal. Id.; Caisse Nationale de Credit Agricole
v. CBI Indus., Inc., 90 F.3d 1264, 1275 (7th Cir. 1996) (citation
omitted). See generally In re Midway Airlines, Inc., 383 F.3d
663, 671 (7th Cir. 2004). Accordingly, we deem Roadway’s
argument that 29 C.F.R. § 825.207(d)(1) is “contrary to the
clear congressional intent [set forth in the FMLA]” waived.
Chevron, 467 at 843 n.9 (1984). Declining to address this
issue, we, therefore, express no opinion regarding this
regulation’s validity and leave that question for another
case.
III.
Roadway waived its right to challenge the validity of
29 C.F.R. § 825.207(d)(1) and under the terms of
§ 825.207(d)(1) the FMLA provision for substitution of
paid leave does not apply. Accordingly, we AFFIRM the
district court’s grant of summary judgment to Repa.
8 No. 06-2360
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—2-26-07