The Department of Labor’s final Family and Medical Leave Act rules contain an early Christmas gift for employers in the Carolinas. DOL revised its rules regarding private releases of claims between employers and employees in an effort to administratively reverse the Fourth Circuit Court of Appeals decision in Taylor v. Progress Energy.
In Taylor, an employee accepted a separation package from the employer, and signed a general release of claims, including FMLA claims. She later sued the employer for FMLA violations, ignoring the release’s clear terms. The Fourth Circuit rejected the employer’s attempt to assert the release as a defense to the claim. It concluded that FMLA regulations prohibit private releases of FMLA claims in the absence of court or DOL approval.
DOL never agreed with the Fourth Circuit’s interpretation of its rules. It maintained that its ban on release of FMLA claims only applied to attempts by employers to have employees waive their rights to challenge future violations by the employer. The Department said that it never intended this prohibition to apply to releases of possible violations that already occurred.
The U.S. Supreme Court initially agreed to review Taylor, but dismissed the appeal after DOL told the Court that it would address the issue by changing its release regulations to more clearly express the agency’s intent. The new FMLA rules do just that. Section 825.220(d) of the new final rules specifically allow employers and employees to enter into FMLA waivers involving past conduct.
This change means that employers should be able to rely upon general releases to include possible FMLA claims by separated employees. The new FMLA rules do not change similar restrictions on private releases of claims under the Fair Labor Standards Act.