A federal court recently held that the FMLA does not prohibit an employee from waiving the right to sue for past violations of the FMLA in a severance agreement. Employees may not, however, prospectively waive substantive FMLA rights (i.e., the right to take leave) or procedural FMLA rights (the right to sue).
In Dougherty v. Teva Pharmaceuticals USA, Inc., No. 05-2336, 2007 U.S. Dist. LEXIS 27200 (E.D.Pa. April 9, 2007), the employee signed an agreement which, in exchange for various severance benefits, released TEVA from liability for any employment-related claims, including FMLA claims. The employee took the severance money and promptly sued the employer for violation of the FMLA. TEVA moved to dismiss the case based on the severance agreement. The motion afforded the Court the opportunity to weigh into the split in the courts regarding the meaning and scope of the anti-waiver provisions of 29 CFR 825.220(d).
29 CFR 825.220(d) provides:
Employees cannot waive, nor may employers induce employees to waive, their rights under FMLA.
Some courts have held that 825.220(d) prohibits an employee from prospectively waiving substantive rights only. Procedural rights, such as the right to sue, are not "rights" within the meaning of the FMLA and, therefore, may be waived. See Faris v. Williams WPC-1, Inc., 332 F.3d 316 (5th Cir. 2003). Courts following this approach will enforce a valid severance agreement waiving the right to sue for FMLA violations. The DOL generally favors this interpretation.
Other courts have found that the anti-waiver provisions of the FMLA prohibit the waiver of accrued and prospective substantive and procedural rights. See Taylor v. Progress Energy, Inc., 415 F.3d 364 (4th Cir. 2005), vacated by 2006 U.S. App. LEXIS 15744 (4th Cir. June 14, 2006); Brizzee v. Fred Meyer Stores, Inc., No. 04-1566, 2006 WL 2045857 (D.Or. July 17, 2006). Under this view, the FMLA prohibits an employee from waiving the right to sue for FMLA violations, except where settlement is achieved with the assistance of the U.S. Department of Labor or a court.
The Court in Dougherty stakes out a third position. Focusing on the phrase "rights under the FMLA" in 825.220(d), the Court reasoned that the FMLA prohibits the prospective waiver of substantive and procedural rights, including the right to sue. Past or accrued FMLA claims, however, were no longer "rights under the FMLA" and, therefore, could be waived. Accrued FMLA claims were not longer "rights under the FMLA" because an employee's decision to bring a claim for a past FMLA violation is both discretionary and predicated on an FMLA violation. As such, it is no longer a "right under the FMLA" within the meaning of 825.220(d). The Court explained:
So by settling a past FMLA claim, the employee still retains all of her substantive rights and remedies (proscriptive rights) under the FMLA. After a settlement, an employer cannot, for example, deny her of [sic] FMLA leave. And if it does, the employee always has a remedy (proscriptive rights) under the FMLA to challenge the action. Entering into a settlement or severance agreement therefore doesn't change anything for the employee in terms of rights under the FMLA- she still retains all of them.
Comment: The decision is an interesting attempt to reconcile the language of 825.220(d) with the judicial inclination favoring resolution of claims through means other than litigation. The distinction drawn by the Court that an employee may waive their right to sue for accrued, as opposed to prospective, claims rests, in my opinion, on the dubious proposition that an employee continues to enjoy the benefits and protections of the FMLA post-release. Obviously, an employee who signs a release as part of a severance agreement is no longer an employee. As a non-employee, an employer would not be in a position to deny the employee additional leave. Nor, as a practical matter, would the employee retain the right to sue for future FMLA violations because, as a non-employee, there wouldn't be any future violations.
Note that the decision would preclude enforcement of an agreement to arbitrate FMLA claims. Such arbitration agreements generally are required as part of the hiring process. As such, they are prospective waivers of the right to sue for FMLA violations, which this Court would find violates 825.220(d). A majority of courts have enforced employment agreements to arbitrate FMLA claims.
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