If the person would have been laid off if he was working, then he can legally be laid off while on leave, even FMLA leave. For example, layoffs were needed and were done on a seniority basis, and the next person in line happens to be out on FMLA leave, he can still be laid off. But he can't be laid off BECAUSE he is on medical leave, or placed ahead of others in the line because he is on medical leave.