[Code of Federal Regulations]
[Title 29, Volume 3]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR825.218]

[Page 778]
 
                             TITLE 29--LABOR
 
         CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR
 
PART 825_THE FAMILY AND MEDICAL LEAVE ACT OF 1993--Table of Contents
 
 Subpart B_What Leave Is an Employee Entitled to Take Under the Family 
                         and Medical Leave Act?
 
Sec. 825.218  What does ``substantial and grievous economic injury'' mean?

    (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).