Insights from the Costco Lawsuit: How Medical Leave and Reasonable Accommodations Intersect in California

When a medical crisis hits, workers often assume their employer will follow the law, offer support and make reasonable accommodations. But what happens when the company’s leave policy limits clash with California workers’ legal rights?

A recent case against Costco Wholesale Corp. reveals the legal obligations employers have beyond the federal Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA). The lawsuit involves an hourly sales employee who took extended leave to care for his wife, who was battling cancer, and to manage his own medical condition.

His first “continuous leave,” taken under FMLA and CFRA, ran from March to June 2021 while caring for his wife. Following that, he took approved personal medical leave for his own condition from June 2021 to February 2022. After exhausting all available leave under FMLA, CFRA and Costco’s internal policies, the worker asked for additional time off.

Costco denied the request and ordered him to return to work, claiming he hadn’t worked enough hours in the previous year to qualify for further protected leave under company policy. The employee resigned rather than return and later sought reinstatement, which Costco refused. While some of his legal claims were dismissed, a federal judge ruled that several were strong enough to proceed to trial, including failure to accommodate, failure to engage in the interactive process, retaliation and wrongful termination.

What California Law Says About Leave Extensions

Although federal and state leave laws like FMLA and CFRA provide job-protected leave for a limited time, generally up to 12 weeks, California law goes further. Under the Fair Employment and Housing Act (FEHA), an employee with a disability may be entitled to additional leave as a reasonable accommodation. This includes granting medical leave even after the employee’s FMLA or CFRA eligibility has ended and despite any company policies that limit leave duration.

FEHA doesn’t set a maximum amount of leave. Instead, it evaluates whether the leave is reasonable and whether granting it would cause the employer undue hardship. This determination depends on the facts of each case. The employer bears the burden of proving that holding the position open during the employee’s leave would cause undue hardship.

In the Costco case, the employee’s request for additional leave included a specific return-to-work date. Courts have made clear that indefinite leave requests aren’t protected. Time-limited extensions with a clear end date may qualify as reasonable accommodations under FEHA, particularly when supported by a doctor’s recommendation.

The Duty to Engage in a Good Faith Interactive Process

The lawsuit also focused on Costco’s alleged failure to engage in the interactive process. California law requires employers to participate in meaningful dialogue when an employee with a disability requests reasonable accommodations, such as modified schedules or additional leave.

The court noted that Costco appeared more willing to accommodate leave for the employee’s own condition than for his wife’s. This difference raised questions about whether Costco met its legal obligations. FEHA prohibits discrimination not only based on an employee’s disability but also on their association with someone who has one. Refusing to engage in a discussion because the leave was for a family member could violate state law.

While employers aren’t required to grant every accommodation, they must make a good faith effort to consider options. An outright denial without discussion may support a legal claim.

Key Takeaways for Workers

Costco’s internal policy capped continuous leave at 12 months. However, such company policies don’t override California law. Even if the employee reached that limit, the company still had a legal duty to consider whether additional leave could be a reasonable accommodation.

California workers should know that exhausting FMLA or CFRA leave doesn’t necessarily end their legal rights. FEHA protections may also apply if you have a disability or are caring for a disabled family member and need more time off.

To qualify for these protections, your leave request should include a return-to-work date and be supported by medical documentation. Your employer must respond with a genuine dialogue. Ignoring requests, denying leave without discussion or rigidly applying policies may violate the law.

Speak With an Employment Lawyer

California employment law is complex, especially when federal and state leave laws intersect with company policies. Employers can’t ignore the law simply because their handbook says so. 

If your employer has denied your leave request, refused to engage in reasonable accommodation discussions or retaliated after you sought help, you don’t have to face it alone. The experienced Oakland employment attorneys at Erlich Law Firm can help you understand your rights under California law. Contact us today for a free initial consultation.