In a Texas case of first impression, Fort Worth Court of Appeals held that an employee on FMLA leave of absence is not entitled to receipt of state unemployment benefits reversing the Texas Workforce Commission’s administrative decision.  In Texas Workforce Commission v. Wichita County, Texas, a county employee applied for state unemployment benefits when she started FMLA leave.  The unemployment hearing officer and Texas Workforce Commission both held that the employee was eligible for state unemployment benefits because she was effectively separated from her last employment when she went on FMLA leave after the employer could not make any accommodations based on her restrictions.

In rejecting the Commission’s interpretation, the Court explained that:

[T]he federal and state statutes generally apply to distinct groups of people: those who cannot perform existing jobs on a temporary basis, desire to return to those jobs, and need protection for the jobs until the reason for leave resolves (FMLA) as opposed to those who desire new jobs and are ready and willing to perform them and need temporary income benefits in the meantime (unemployment under the labor code). We cannot fathom that either Congress or our state legislature intended for a person to be able to proceed down both paths and receive both benefits at the same time.

Thus, although White did not perform services and did not receive wages during her FMLA leave . . . we conclude that she was not qualified to receive unemployment benefits. We hold that the opposite conclusion would be absurd for the reasons stated above and because such a conclusion would thwart the employment-stability purposes of federal and state law by encouraging an individual with protected employment to seek new employment as a condition of obtaining unemployment benefits.  We also agree with the County’s position that the opposite conclusion would amount to a judicial mandate of paid FMLA leave; we are reluctant to reach such a decision in the face of express authorization that such leave may be unpaid under federal law and without clear guidance to the contrary from our state legislature.

Consequently, employees on FMLA leaves of absence (and perhaps other leaves where the employee is still employed by the employer) are not qualified to receive state unemployment benefits.

You can download Texas Workforce Commission v. Wichita County, Texas here.