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Peters v. Gilead Sciences

July 14, 2008


Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 04 C 1338-John Daniel Tinder, Judge.

The opinion of the court was delivered by: Sykes, Circuit Judge.

ARGUED MAY 22, 2007

Before EASTERBROOK, Chief Judge, and WILLIAMS and SYKES, Circuit Judges.

Steven Peters suffered a shoulder injury while he was employed by Gilead Sciences, Inc. He took a relatively short medical leave to have corrective surgery, and when his condition did not improve after returning to work, he took another leave. During his second absence, Gilead filled his position with another employee, and when Peters returned to work, Gilead offered him a different position. He declined and Gilead terminated his employment.

Peters filed suit against Gilead, alleging (as relevant here) a violation of the Family and Medical Leave Act ("FMLA"), 29 U.S.C. §§ 2601 et seq., and a claim for promissory estoppel under Indiana law. Gilead moved for summary judgment on the FMLA claim, arguing that Peters was ineligible for FMLA leave based on a provision in the Act that excludes employees at worksites at which less that 50 employees are employed "if the total number of employees employed by that employer within 75 miles of that worksite is less than 50." 29 U.S.C. § 2611(2)(B)(ii). It was undisputed that Gilead employed less than 50 employees within 75 miles of Peters' worksite, making him statutorily ineligible for FMLA leave. It was also undisputed that if Peters was eligible for FMLA leave, Gilead had miscalculated the 12-week duration of his leave and replaced him before it expired.

Relying on language in Dormeyer v. Comerica Bank-Illinois, 223 F.3d 579, 582 (7th Cir. 2000), Peters argued that Gilead was equitably estopped from asserting the FMLA's 50/75 exclusion based on representations made in Gilead's employee handbook and in letters it sent to Peters regarding his entitlement to 12 weeks of medical leave. The district court concluded Peters had not established the elements of equitable estoppel and granted summary judgment for Gilead.

We reverse. While Dormeyer suggested that FMLA eligibility might, "in an appropriate case," arise by estoppel, the issue need not have been addressed in this case. Peters alleged a state-law claim for promissory estoppel-an equitable contract remedy that permits enforcement of a promise that induces actual and reasonable reliance on the part of the plaintiff, at least to the extent of the plaintiff's reliance damages. The doctrine is available when a promise lacks the elements of contract; a threshold question is whether the promise created an enforceable contract.

The medical-leave representations contained in Gilead's employee handbook (repeated in its letters to Peters) may have created an enforceable contract under Indiana law, giving Peters a contractual right to the equivalent of FMLA leave (that is, 12 weeks) regardless of his statutory ineligibility. If the representations in the handbook are not contractually enforceable, Indiana's promissoryestoppel cause of action allows enforcement of Gilead's promises to the extent of the reliance harm Peters suffered. Accordingly, we need not decide whether this is an "appropriate case" to apply FMLA eligibility-by-estoppel, a possibility assumed but not decided in Dormeyer.

I. Background

In July 2001 Peters began employment as a Therapeutic Specialist for Gilead, a pharmaceutical company. As a Therapeutic Specialist, Peters worked from his home in Indianapolis representing and marketing Gilead's products to physicians and healthcare professionals in its Midwest region. In November 2001 Peters suffered a work-related injury to his neck and right shoulder. When he reaggravated his shoulder in October 2002, Peters reported the injury to Gilead and filed a worker's compensation claim. At the end of November, his physician imposed lifting restrictions, and Peters worked under these restrictions until early December of that same year. He then underwent corrective surgery, taking what he thought was FMLA medical leave from December 5 through December 16, 2002.

The day after his leave started, Peters received a letter from Gilead stating in part:

The Federal Family and Medical Leave Act ("FMLA") went into effect August 5, 1993. The act grants eligible employees of covered employers up to twelve weeks of unpaid leave in a twelve month period to care for a newborn or adopted or foster child, to care for the seriously ill parent, child, or spouse of the employee, or to attend to the employee's own serious health condition. To be eligible for FMLA benefits, an employee must have worked for a covered employer for a total of 12 months and have worked at least 1,250 hours over the previous twelve months.

You will retain your employee status during the period of your FMLA Leave. This includes accrual of tenure and vacation, in addition to continued health benefits coverage. You will be guaranteed reinstatement in your position, or equivalent position, if you return to work by the time your FMLA leave expires. In this case, since your leave began December 5, 2002, you will need to return to work by February 28, 2003 to be guaranteed such reinstatement.

This excerpt (with the exception of the specific start and end dates for the leave) tracks language in Gilead's employee handbook regarding employees' entitlement to family and medical leave. The handbook provides, under the bold heading "FAMILY AND MEDICAL CARE LEAVE" and the subheading "ELIGIBILITY": "A request for family and medical care leave will be granted for all employees employed by the Company [Gilead] for at least twelve months and who have worked 1,250 hours during the twelve months preceding the commencement of leave." Like the letter Peters received, the handbook guarantees 12 ...

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