A former employee who claimed his termination from a division of the credit rating firm Moody's was retribution for taking time off to deal with a cancer diagnosis saw the U.S. Court of Appeals for the Second Circuit affirm a lower court's dismissal of his claims under the Family and Medical Leave Act Friday.

Gregory Clemens sued Moody's Analytics after he was terminated in 2016 following an internal investigation that recommended the company do so. Investigators said they found Clemens had falsified work claims in an attempt to meet the criteria needed for a yearly commission bonus of approximately $100,000.

Clemens claimed the termination was actually retaliation against him for exercising his right to take medical leave under the FMLA. After being diagnosed with colon cancer, Clemens took medical leave for 63 days in 2015. He claims both his termination, as well as the reduction of his compensation over the work he was said to have falsified, represented adverse employment actions.

In April 2018, U.S. District Judge Paul Crotty of the Southern District of New York agreed with Moody's that Clemens failed to satisfy the prima facie burden of establishing an inference of retaliatory intent on the company's part. No direct evidence was presented, Crotty found, and Clemens failed to show a temporal proximity to the actions taken against him months after the fact.

Crotty said Clemens also failed to show an indirect inference of animus by the company through evidence such as the different treatment of other employees doing similar work. According to Crotty, Clemens was “unable to point to a single similarly-situated [sic] Moody's employee who did not take FMLA leave and who was not disciplined after being found” to have falsified work claims as Clemens had.

On appeal, Circuit Judges Guido Calabresi, Raymond Lohier Jr. and Richard Sullivan found that, even if, for the sake of argument, Clemens was able to make a prima facie test, he failed to satisfy the critical final step of the three-step framework established under the U.S. Supreme Court's 1973 decision in McDonnell Douglas v. Green.

Specifically, Clemens could not show that the reasons provided by Moody's for his termination and reduction of qualifying work were actually motivated by retaliation.

The panel said Clemens failed to back up with evidence his claim that his manager deviated from the ordinary process of alerting an employee about the work time reduction. Similarly, his argument that Moody's proration of his bonus interfered with his FMLA rights failed because evidence showed the company does so based an employee's length of leave regardless of the reason.

While Crotty's decision on the federal law claims was affirmed, the panel did order the suit be remanded back to the district court to deal with the court's decision to exercise supplemental jurisdiction over Clemens' state claims. The panel, finding Crotty had not provided information about his decision to do so, ordered the district court to conduct an inquiry and, if supplemental jurisdiction is declined, to dismiss without prejudice to give Clemens an opportunity to pursue the claims in state court.

Clemens was represented on appeal by Kaiser Sauborn & Mair name attorney David Mair. Moody's was represented by Morgan, Lewis & Bockius partner Kenneth Turnbull. Neither responded to a request for comment.

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