(Catch 22 and) Release: Employees Can Sue Former Employers For FMLA Violations Despite a Release Agreement
Recently, the U.S. District Court for the Eastern District of Pennsylvania held that an employee’s execution of a general release does not waive the right to sue the employer for violations of the Family Medical Leave Act (FMLA). Dougherty v. TEVA Pharmaceuticals USA, 2006 U.S. Dist. LEXIS 62179 (E.D. Pa., Aug. 29, 2006). While the language of the FMLA itself does not specifically preclude such waivers, the regulations enacted by the Department of Labor (which provide courts with guidance when interpreting the FMLA) do prevent an employee from waiving his or her rights under the FMLA. Thus, the Dougherty court’s decision was based, in large part, on the plain language of a DOL regulation which provides that “employees cannot waive, nor may employers induce employees to waive, their rights under [the] FMLA.” 29 C.F.R. § 825.220(d).
The employee in Dougherty sued her former employer for violations under the FMLA and the Americans with Disabilities Act (ADA). In response, the employer defended itself by relying on the general release that the employee signed when she voluntarily terminated her employment. Moreover, the employer pointed out that the employee had received and retained two months’ payment as severance in exchange for the release. The court, nonetheless, determined that the clear language of § 825.220(d) negated the general release with respect to the employee’s FMLA claim.
Moreover, the release did not contain a savings or severability clause (i.e. a provision meant to ensure that a contract will remain enforceable even if a portion of it is deemed invalid), and the employer did not present an argument as to why the provisions of the release should be treated separately. Thus, while the court stopped short of declaring the entire release to be invalid, it nevertheless denied the employer’s motion for summary judgment with respect to the employee’s ADA claim.
The implications of this decision are significant for employers. In light of the decision, employees could execute a release, collect their severance, and still sue their employer for FMLA violations. In addition, it is quite possible that, in the absence of a savings clause, the entire release agreement could be invalidated by inadvertently causing an employee to waive his or her rights under the FMLA.
To avoid these potentially damaging consequences, employers are strongly advised to have legal counsel review their releases, severance agreements, and other similar documents.