As federal workplace disputes go, the case of Zella E. Ellshoff v. Department of Interior has been difficult, unusual and confusing. Ellshoff, a botanist with the U.S. Fish and Wildlife Service, struggled with bouts of severe depression in 1994. In August that year, she did not report for work for almost two weeks and was charged with being absent without leave.

Her doctor recommended she take six weeks off from work so that new medication could take effect and informed Ellshoff's office that she could not work because of depression. She was hospitalized for several days, but in November her doctor told her she could return to work.

Four days before her return, however, the Fish and Wildlife Service said it planned to fire Ellshoff because she was unable to perform her duties because of depression and because she had been AWOL.

Upon her return to her office in Fort Snelling, Minn., Ellshoff retroactively filed the paperwork requesting leave, including time off under the 1993 Family and Medical Leave Act. But the agency rejected the request and fired her in late December.

Ellshoff, a $33,000-a-year employee, took her case to the U.S. Merit Systems Protection Board (MSPB), a federal panel that referees federal workplace disputes.

"I was sick, and I took the initiative to try to get better so that I could do my job better, and I was shocked that I wasn't supported by my employer," said Ellshoff, 48.

Ellshoff won. In May 1995, MSPB Administrative Judge Howard J. Ansorge in Chicago said the agency "failed to establish by a preponderance of the evidence that {Ellshoff} is unable to perform the duties of her position due to depression." But, saying that Ellshoff's return would be "unduly disruptive" to the Fort Snelling office, the Fish and Wildlife Service placed her on paid leave while the agency appealed. That leave lasted for more than two years.

The notion that the agency's only botanist in an eight-state region would be paid to stay at home for that long drew attacks from a nonprofit watchdog group, Public Employees for Environmental Responsibility, as a waste of taxpayer dollars.

Now, the verdict on the appeal is in, and Ellshoff has won again. The merit board reinstated her July 29, based on its reading of the Family and Medical Leave Act. She is slated to return to work later this month.

The act has been championed by President Clinton as a way to give workers unpaid time off to be with their families during times of crisis. Federal agencies generally have administered it with the understanding that employees have to give advance notice to claim the benefit.

But the board's decision said Ellshoff qualified for coverage and that she could be excused from any obligation to provide advance notice. The law "is silent regarding the employee's notice obligation when the need for leave is unforeseeable," the MSPB said.

William F. Hartwig, the Fish and Wildlife director for the region where Ellshoff is assigned, said this is the first case decided in which a federal worker has been able to retroactively claim rights under the act.

"We felt that we had a situation where the agency could not depend on this employee to be at work and work while she was there, so we proceeded to remove her for failure to be at work," Hartwig said.

The Ellshoff case, though, also underscores how careful agencies must be when they seek to dismiss career employees.

In Ellshoff's case, Judge Ansorge found the agency "presented a great deal of evidence" showing that the botanist, who was responsible for coordinating plans designed to protect endangered species, missed deadlines and did not complete important tasks, such as getting draft plans out to the public for comment. The judge also heard testimony that Ellshoff and co-workers did not get along in the office.

But MSPB also learned that supervisors had failed to conduct annual performance evaluations of Ellshoff and that she had been promoted from General Schedule Grade 9 to GS-11.

"The agency stated they felt her presence was disruptive and a basis for not letting her come back, but they didn't state any reason for that belief," said Ellshoff's lawyer, Thomas B. James of Cokato, Minn.

Jeff Ruch, the counsel for Public Employees for Environmental Responsibility here, said Ellshoff's career "is in shambles" because of the Fish and Wildlife attempt to fire her.

"This was a completely stupid tactic for the agency to take, and they compounded their stupidity by appealing it. Why they would want to create case law in this area is beyond me," Ruch said.

What Ellshoff's case means for federal workers and the Family and Medical Leave Act, however, remains open to question.

MSPB noted in its ruling that, in addition to the Family and Medical Leave Act, it relied on Office of Personnel Management (OPM) interim regulations to interpret the law.

But OPM, effective Jan. 6, issued final regulations reaffirming that employees must notify their supervisors before taking leave under the law.

In general, when MSPB and OPM interpret law in different ways, OPM has the option of asking the board to reconsider a decision. An OPM official said the agency is aware of the MSPB ruling on Ellshoff but declined to comment on the case. CAPTION: ZELLA E. ELLSHOFF