PUBLICATIONS

Employee Releases May Not Be Valid against Family and Medical Leave Act Claims

8/28/2007

Many employers consider the Family and Medical Leave Act (FMLA) to be, at a minimum, a burdensome administrative challenge. As tempting as it might be to ask employees to enter into agreements prospectively waiving any rights they may have under the FMLA, a prospective waiver of FMLA rights almost certainly would be unenforceable. A U.S. Department of Labor regulation prohibits employee waivers of rights under the FMLA, and the courts have uniformly found such waivers to be unlawful and unenforceable.

What about a backwards-looking waiver? Does the prohibition against waivers of FMLA rights also apply to waivers or releases of possible past violations? Sometimes such waivers are found in severance agreements – in exchange for severance pay, the employee agrees to release all potential claims against the employer. In other cases such waivers are a part of settlement agreements entered into to resolve litigation or an administrative claim by an employee. Releases contained in severance or settlement agreements by which an employee gives up his or her right to pursue legal action for some alleged past legal violation are typically valid even without any court or agency approval – for example, claims under anti-discrimination or disability laws generally may be waived in this way. Some employee claims, however, technically cannot be waived by the language in a general release – for example, claims for unpaid minimum wages or overtime under the Fair Labor Standards Act. A recent court decision may now add employee claims for past FMLA violations to the list of those claims that may not lawfully be released or waived in a private party settlement agreement.

The federal U.S. Court of Appeals for the Fourth Circuit (covering Maryland, Virginia, West Virginia, North Carolina, and South Carolina) recently decided that such retrospective waivers are not valid under the FMLA. Taylor v. Progress Energy, Inc., 2007 U.S. App. LEXIS 15846 (4th Cir. 2007). This court found the plain language of an administrative regulation prohibiting waivers applies to both prospective and retrospective waivers. Under the court’s decision, for an employee waiver of rights under the FMLA to be valid, any waiver that an employer obtains must be approved by a court or by the U.S. Department of Labor. This decision is particularly noteworthy because the Department of Labor, which is responsible for enforcing the FMLA, submitted briefs and argued to the court that the regulation applied only to prospective, and not retrospective, waivers.

This recent decision creates a conflict among courts that have considered the issue. Other courts, including the Fifth Circuit Court of Appeals (covering Texas, Louisiana, and Mississippi), have held that retrospective waivers of claims under the FMLA are valid. California federal and state courts have not addressed the issue. This legal uncertainty means that employers must act carefully when dealing with disputes or potential disputes under the FMLA, and may not be able to take complete assurance in the effect of an employee’s general release in a severance or settlement agreement where FMLA issues are in play until this legal question is ultimately decided by the U.S. Supreme Court.