Builders and Contractors Exchange
Weekly Bulletin: 8 aug 2008
Employees Cannot Waive Past or Future FMLA Claims
By: Joy Weber
Planning a layoff or settlement? If you intend to have a former employee sign a release or settle claims, be aware that it might not stick if there are potential Family and Medical Leave Act (FMLA) claims involved. The United States Supreme Court recently left employers hanging rather than clarifying a FMLA regulation that caused a split in the courts. The issue arose when a former employee of Progress Energy signed a release waiving her claims against the company in return for severance pay, but later sued the company anyway regarding a violation of the FMLA.
The Fourth Circuit (Virginia, North Carolina, South Carolina, Maryland, and West Virginia) has ruled that employees cannot waive their past or future FMLA rights without either court or Department of Labor (DOL) approval of the agreement. On the other hand, the Fifth Circuit (Texas, Louisiana, and Mississippi) found that only future FMLA rights cannot be waived, thereby allowing an employee to sign a release or enter into a settlement of former claims, regardless of court or DOL approval. The DOL disagrees with the Fourth Circuit interpretation of the regulation at issue, and has said that only a waiver of future rights is prohibited by the regulation. Nevertheless, the Fourth Circuit ruling still stands and is the law for employers located in the five states that make up the Fourth Circuit.
The DOL is supposed to resolve the issue by clarifying the regulation in question when it issues newly revised regulations, which will supposedly occur sometime in the fall. Given the current political climate, however, it may take a lot longer if the revised regulations are not issued prior to the presidential election.
In the meantime, employers are left to anxiously await the release of the revised FMLA regulation and wonder if they will be sued by former employees who previously signed releases as part of reductions in force, private settlements, and voluntary separation agreements. Employers in the Fourth Circuit must carefully review the language of any releases or settlements to be signed in the future, particularly when FMLA claims are involved because, for now, either court or DOL approval are needed to constitute a valid waiver of FMLA rights.
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This article is meant to bring awareness to this topic and is not intended to be used as legal advice.