Taylor v. Progress Energy Affects FMLA Rights
December 2005
Creating a split in the circuit courts, the
U.S. Court of Appeals for the Fourth Circuit has restricted an employer's ability
to dispose of Family and Medical Leave Act (FMLA) claims. The Fourth Circuit,
in Taylor v. Progress Energy, Inc., No. 04-1525,
2005 U.S. App. LEXIS 14650 (4th Cir. July 20, 2005), held that an employee may
not abdicate their right to bring an FMLA claim against their employer by signing
a waiver or release. The court stated that "without the regulation's nonwaiver
provision, the unscrupulous employer could systematically violate the FMLA and
gain a competitive advantage by buying out FMLA claims at a discounted rate."
by Paul
J. Siegel, Esq.
Jackson Lewis
LLP
Beginning in April 2000, Barbara Taylor missed a significant amount of work
due to severe pain and swelling in her legs. Her employer, Carolina Power &
Light Company (CP&L), gave Ms. Taylor a poor productivity rating because of
her health-related absences, despite the fact that she had requested, and had
been denied, FMLA leave on numerous occasions. With a planned company layoff
pending, Ms. Taylor asked her employer to correct her evaluations to reflect
that the absences qualified as FMLA leave; these requests were also denied.
On May 17, 2001, she was terminated because of her poor performance evaluation.
The company provided Ms. Taylor with certain benefits in exchange for her signing
a general release, waiving her right to bring any federal claim against the
company.
Ms. Taylor then sued her employer, alleging that the company had violated
her FMLA rights. In response, CP&L filed a motion for summary judgment, arguing
that the release provided a complete defense to Ms. Taylor's suit. Ms. Taylor
argued that the Department of Labor (DOL) regulation, 29 C.F.R. 825.220(d),
barred the enforcement of the release. Regulation 29 C.F.R. 825.220(d) provides
that "employees cannot waive, nor may employers induce employees to waive, their
rights under the FMLA." The District Court, relying on the Fifth Circuit Court
of Appeal's decision in Faris v. Williams WPC-I, Inc.,
332 F.3d 316 (5th Cir. 2003), granted the motion for summary judgment. The district
court held that the regulation did not apply to the retrospective waiver or
release of FMLA rights or claims of discrimination or retaliation for exercising
FMLA rights.
The Court of Appeals for the Fourth Circuit disagreed with both the District
Court and the Fifth Circuit Court of Appeals. It held that the regulation's
plain language prohibits both the retrospective and prospective waiver or release
of an employee's substantive and prospective FMLA rights. Substantive rights
under the FMLA include an employee's rights to take up to 12 weeks of unpaid
leave and the prospective rights included an employee's rights not to be discriminated
or retaliated against for exercising their FMLA rights. The court rendered the
release unenforceable because the DOL and Congress intended the FMLA's enforcement
scheme to parallel the Fair Labor Standards Act (FLSA), thus subjecting the
FMLA to the same waiver requirements as the FLSA. The FLSA prohibits any waiver
of substantive or prospective rights without prior DOL or court approval, regardless
of whether the rights are waived by agreement or ratification.
Employers seeking to settle claims of FMLA violations without DOL or court
approval, or negotiate broad releases and waiver of claims in connection with
separation agreements, must consider this important development.
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