In a victory for common sense, the Eleventh Circuit Court of Appeals recently determined that an employee could not pursue Family and Medical Leave (FMLA) interference and retaliation claims against her former employer regarding a pending request for FMLA leave because she had signed a Severance Agreement waiving those retrospective rights. Paylor v. Hartford Fire Insurance Company, 2014 WL 1363544 (11th Cir. April 8, 2014).
In early September, 2009, Ms. Paylor requested additional FMLA leave. Hartford acknowledged Ms. Paylor’s request via e-mail on September 4, 2009 and provided her with various administrative forms to complete as part of her request.
On September 11, 2009, Ms. Paylor received a substandard performance evaluation from Hartford’s management that criticized the quality of her work and explained what she needed to do to keep her job. On September 16, 2009, Hartford offered Ms. Paylor two options: (i) she could accept a one-time offer of 13 weeks’ severance benefits in exchange for signing a Severance Agreement containing a waiver and release, or (ii) she could agree to a performance improvement plan requiring Ms. Paylor to meet various benchmarks or face termination.
Ms. Paylor selected the first option and signed the Severance Agreement on September 17, 2009. Later, Ms. Paylor filed a lawsuit against Hartford alleging that it interfered with her FMLA rights and retaliated against her for exercising those rights. Further, Ms. Paylor argued that the Severance Agreement was invalid under FMLA regulations because it released what she considered to be “prospective rights” rights regarding her pending request for FMLA leave. The district court upheld the validity of the Severance Agreement, and Ms. Paylor appealed.
The Eleventh Circuit affirmed the lower court’s decision. The controlling FMLA regulation provides that “[e]mployees cannot waive, nor may employers induce employees to waive, their prospective rights under the FMLA.” 29 C.F.R. § 825.220(d). Based on a plain reading of the regulation, the court reasoned that “prospective rights” under the FMLA “are those allowing an employee to invoke FMLA protections at some unspecified time in the future” and did not encompass matters pertaining to an outstanding request for FMLA leave. Therefore, the court held that, for purposes of the regulation, the bar on prospective waivers “means only that an employee cannot waive FMLA rights, in advance, for violations of the statute that have yet to occur.
Applying this rationale to Ms. Paylor’s case, the court determined that the alleged unlawful FMLA interference and retaliation occurred, at the latest, on September 16, 2009, when Hartford offered Ms. Paylor the two options. Therefore, Ms. Paylor “wip[ed] out any backward-looking claims that she might have had against her employer”by signing the Severance Agreement on September 17, 2009.
The Paylor decision reaffirms the notion that an employer can enter into a Severance Agreement with an employee contingent on that employee’s waiver and release of all FMLA-based claims that employee possesses up to the time of his/her execution of the Agreement. However, the Paylor decision makes equally clear that employers cannot use proposed Severance Agreements to overreach. As the court noted, an employer cannot, for example, offer an employee a one-time cash payment in exchange for a waiver of any future or prospective FMLA claims.