Non-waivable "Prospective" FMLA Rights Refer to Future, Potential Claims, Not Claims Based on Past Employer Conduct: Eleventh Circuit | Practical Law

Non-waivable "Prospective" FMLA Rights Refer to Future, Potential Claims, Not Claims Based on Past Employer Conduct: Eleventh Circuit | Practical Law

In Paylor v. Hartford Fire Insurance Company, the US Court of Appeals for the Eleventh Circuit affirmed the district court's grant of summary judgment in favor of the employer on the plaintiff's FMLA claims, holding that the plaintiff released the claims she had against her employer for conduct that occurred prior to the date she signed her severance agreement. As a matter of first impression, the Eleventh Circuit interpreted the meaning of "prospective" FMLA rights that are not waivable under 29 C.F.R. § 825.220(d), and held that it does not protect all unexercised claims an employee may have, but only future claims for violations that have not yet occurred.

Non-waivable "Prospective" FMLA Rights Refer to Future, Potential Claims, Not Claims Based on Past Employer Conduct: Eleventh Circuit

by Practical Law Labor & Employment
Published on 11 Apr 2014 • USA (National/Federal)
In Paylor v. Hartford Fire Insurance Company, the US Court of Appeals for the Eleventh Circuit affirmed the district court's grant of summary judgment in favor of the employer on the plaintiff's FMLA claims, holding that the plaintiff released the claims she had against her employer for conduct that occurred prior to the date she signed her severance agreement. As a matter of first impression, the Eleventh Circuit interpreted the meaning of "prospective" FMLA rights that are not waivable under 29 C.F.R. § 825.220(d), and held that it does not protect all unexercised claims an employee may have, but only future claims for violations that have not yet occurred.
On April 8, 2014, in Paylor v. Hartford Fire Insurance Company, the US Court of Appeals for the Eleventh Circuit affirmed the district court's grant of summary judgment in favor of the employer on the plaintiff's FMLA claims, holding that the plaintiff released the claims she had against her employer for conduct that occurred prior to the date she signed her severance agreement. As a matter of first impression, the Eleventh Circuit held that 29 C.F.R. § 825.220(d), which prevents the waiver of prospective rights under the FMLA, does not protect all unexercised claims an employee may have, but only future claims for violations that have not yet occurred (No. 13–12696, (Apr. 8, 2014)).

Background

The plaintiff, while working for Hartford Fire Insurance Company, requested and received FMLA leave from January 2008 and September 2009. In September 2009, she requested additional FMLA leave. Shortly thereafter, Hartford provided the plaintiff with a performance warning and asked her to either accept a severance package in exchange for releasing her FMLA claims, or to agree to a performance-improvement plan requiring her to meet certain performance benchmarks or face termination. The plaintiff chose to sign the severance agreement.
She then filed a complaint against Hartford alleging that:
  • Hartford interfered with her FMLA rights and retaliated against her for exercising these rights.
  • Her severance agreement did not preclude her FMLA claim because Section 825.220(d) prevents the waiver of prospective FMLA rights based on her outstanding request for FMLA leave.
Hartford moved for summary judgment and the district court granted it. The court held that although the Eleventh Circuit had not ruled on whether an employee may legally release her FMLA claims based on past employer conduct, Section 825.220(d) would not save the plaintiff's action because the allegedly unlawful conduct giving rise to her claims occurred prior to the date she executed her severance agreement. The plaintiff appealed to the Eleventh Circuit.

Outcome

The Eleventh Circuit affirmed the district court's grant of summary judgment, holding that the plaintiff released her FMLA claims when she signed the severance agreement. The court found that Section 825.220(d)'s protection of prospective FMLA rights did not save her claims because the alleged violations giving rise to them occurred prior to the date she signed the agreement.
The Eleventh Circuit clarified that Section 825.220(d)'s protection of prospective rights refers only to future violations that have not yet occurred, finding that:
  • After the Department of Labor added the word "prospective" to the regulation in 2009 to resolve the circuit split between the US Courts of Appeals for the Fourth and Fifth Circuits, it is well-settled law that, although employees cannot waive prospective FMLA claims under Section 825.220(d), they can release FMLA claims for violations that occurred in the past (Farris v. Williams WCP-I, Inc., 332 F.3d 316 (5th Cir. 2003); Taylor v. Progress Energy Inc., 493 F.3d 454 (4th Cir. 2007).)
  • The plain language of Section 825.220(d) suggests that prospective rights are rights that an employee may invoke in the future.
  • The plaintiff's position that prospective rights refers to all unexercised FMLA rights, including her claim based on her outstanding request for FMLA leave at the time she signed her severance agreement, is too broad because:
    • that definition would make it unlawful under the FMLA to fire any eligible employee with an outstanding request for leave; and
    • substantive FMLA rights are not absolute, for example, when an employer can show that it refused to restore an employee to a position for a reason unrelated to the FMLA leave.
  • The text of Section 825.220(d):
    • ties an employee's private right of action to the employer's allegedly unlawful conduct, not to an employee's set of unexercised rights; and
    • explicitly permits the settlement or release of FMLA claims by employees based on past employer conduct.
Therefore, the Eleventh Circuit, as a matter of first impression, held that Section 825.220(d)'s protection of "prospective claims" refers only to future violations that have not yet occurred. It then found that plaintiff's claims were waivable and effectively released once she signed the severance agreement because the employer's alleged unlawful conduct occurred before the date she signed it.
The Eleventh Circuit also affirmed the district court's holding that:
  • There was no genuine issue of material fact that the plaintiff knowingly and voluntarily signed her severance agreement.
  • The plaintiff's argument that the waiver was contrary to public policy need not be considered because she failed to raise the issue before the district court.

Practical Implications

In light of the Eleventh Circuit's narrow interpretation of Section 825.220(d), employers have more certainty regarding the enforceability of releases in separation or severance agreements that waive and release FMLA claims based on past employer conduct.