U.S. Supreme Court Likely to Weigh In On the Question "Whether Employees Can Agree to Settle Employment Claims Under the Family Medical Leave Act"
For the past two years, the answer to this question has been in a state of flux in Pennsylvania. In August 2006, the federal court in the Eastern District of Pennsylvania answered this question in the negative, and allowed an employee’s Family Medical Leave Act (FMLA) claim against her employer to go to trial, despite a severance agreement and release waiving any claim arising from or relating in any way to her employment. Dougherty v. Teva Pharmaceuticals USA, No. Civ. A. 05-2336 (E.D. Pa. August 2006).
Then, eight months later in April 2007, that court reconsidered its decision and reversed itself, ruling that, yes, employers can settle FMLA claims brought by employees. Specifically, the court concluded that the FMLA regulations do not prevent an employee from waiving and/or settling any claims for past violations of the FMLA as part of a severance or settlement agreement. This ruling was supported by the United States Department of Labor (DOL), which has historically encouraged the settlement of such claims.
Three months later, a divided Fourth Circuit Court of Appeals answered the question in the negative for employers in Virginia, West Virginia, North and South Carolina, and Maryland: absent prior court or DOL approval, the FMLA regulations bar all waivers or releases of employees’ FMLA rights, including the right to bring a claim for a past violation of the FMLA. Taylor v. Progress Energy, Inc., 493 F.3d 454 (4th Cir. 2007) . This decision would open the floodgates for employers to submit separation and severance agreements for DOL review, and settlement agreements to the court for approval, unnecessarily injecting the DOL and courts into what had heretofore been private negotiations between employers and employees.
To possibly settle this unsettled issue, the Supreme Court on January 14, 2008 asked the Solicitor General to weigh-in on whether the Taylor v. Progress Energy, Inc. decision was correct. Given the DOL’s position permitting the waiver of FMLA claims, the Solicitor General may recommend that the Supreme Court take on the issue and grant certiorari. Keep in mind that the Solicitor General serves as an advocate for government agencies, and the Supreme Court usually follows the Solicitor General’s recommendation.
Although the answer to the question may be far from certain, the import of these decisions for employers is clear. Employers need to exercise caution when drafting separation, severance, and settlement agreements that contain broadly-worded releases. The agreement should specify the statutes for which a waiver or release of claims is sought, and should include a severability clause that would save the otherwise enforceable provisions of the agreement. If the location of the employment relationship, or the law governing the agreement, lies in the Fourth Circuit, however, any waiver or release of FMLA claims is not valid without court or DOL approval, at least until the Supreme Court weighs in on this issue.
We haven’t heard the latest on this question, and I will keep you updated as the issue develops
