(a) In order to deny restoration to a key employee, an employer must
determine that the restoration of the employee to employment will cause
``substantial and grievous economic injury'' to the operations of the
employer, not whether the absence of the employee will cause such
substantial and grievous injury.
(b) An employer may take into account its ability to replace on a
temporary basis (or temporarily do without) the employee on FMLA leave.
If permanent replacement is unavoidable, the cost of then reinstating
the employee can be considered in evaluating whether substantial and
grievous economic injury will occur from restoration; in other words,
the effect on the operations of the company of reinstating the employee
in an equivalent position.
(c) A precise test cannot be set for the level of hardship or injury
to the employer which must be sustained. If the reinstatement of a ``key
employee'' threatens the economic viability of the firm, that would
constitute ``substantial and grievous economic injury.'' A lesser injury
which causes substantial, long-term economic injury would also be
sufficient. Minor inconveniences and costs that the employer would
experience in the normal course of doing business would certainly not
constitute ``substantial and grievous economic injury.''
(d) FMLA's ``substantial and grievous economic injury'' standard is
different from and more stringent than the ``undue hardship'' test under
the ADA (see, also Sec. 825.702).
