Yes, you can still fire employees for lying, even when they are seeking FMLA leave

67 employees of CSX Transportation submitted a required internal form requesting medical leave. Those requests had four key problems: 1.) each was submitted shortly after CSXT informed the employees that they would be furloughed; 2.) each was submitted by one of two chiropractors; 3.) each contained the same or substantially similar language referencing general minor musculoskeletal conditions such as sprains or muscle spasms with no individualized assessments and requiring at least eight weeks of leave; and 4.) they were all submitted within a very tight time period.

As a result, CSXT's Chief Medical Officer, Dr. Heligman, became suspicious of fraud. Following an internal investigation, which included an evidentiary hearing at which each employee could appear and testify, represented by their labor union, the company fired all 67 employees for violating its Code of Ethics and its policy against workplace dishonesty.

In their subsequent litigation, the plaintiffs argued that CSXT's investigation was discriminatory because its disciplinary investigations were "predetermined." Dr. Heligman, they argued, the only witness who testified on behalf of the company, "had already concluded that the Plaintiffs engaged in fraud and were guilty." Thus, the investigation was a predetermined sham.

The 4th Circuit disagreed. 

While Dr. Heligman's conclusions may have been "predetermined" as of the time of the hearings, that fact does not make the conclusions pretextual. Pretext calls for an inquiry into whether the suspected dishonesty and fraud were the real reasons for CSXT's decision. And nothing that the plaintiffs have pointed to calls into question whether suspected dishonesty and fraud were Dr. Heligman's real reasons for pursuing the investigation and employee discipline.

Thus, the plaintiffs' FMLA interference claims failed as a matter of law.

The FMLA serves the important purpose of allowing employees to take leave for legitimate family needs and medical reasons, but it is not a right that can be fraudulently invoked with impunity. In order to maintain the integrity of the FMLA, employers must be able to investigate and address plausible allegations that employees have been dishonest in their medical leave claims. In this case, CSXT did just that, and the plaintiffs have failed to meet their burden of showing that CSXT's explanation for their termination — that is, that the company determined that the employees had violated workplace rules regarding dishonesty — was pretextual.

Or, to put it more succinctly, honesty is, and always remains, the best policy.