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Is Your General Release Enforceable?
In a decision that caught many employers by surprise, the U.S. Court of Appeals for the Fourth Circuit recently held in Taylor v. Progress Energy, Inc., 415 F.3d 364 (4th Cir. 2005), that claims arising under the Family and Medical Leave Act, 29 U.S.C. '2601, et seq. (FMLA), including post-dispute claims, cannot be waived or settled via private agreement between an employee and employer. The only other Court of Appeals ever to consider this issue in the dozen years since the FMLA was enacted reached an opposite result. See, Faris v. Williams WPC-I, Inc., 332 F.3d 316 (5th Cir. 2003). In light of Taylor, employers inside and outside of the Fourth Circuit must now review the language of their general release agreements and evaluate what, if any, changes are needed.
The Facts
Plaintiff Barbara Taylor worked for Carolina Power & Light Company, a subsidiary of Progress Energy, Inc. In Spring 2000, Taylor began experiencing extreme pain and swelling in her leg. After a brief period of bed rest, Taylor underwent a series of medical tests to determine the cause of her pain. Taylor inquired whether her absences during this period qualified as leave under the FMLA. A Human Resources representative (incorrectly) informed her that they could not be counted as FMLA leave because she had never been absent from work for 5 consecutive days. Thereafter, the company issued Taylor a written warning for attendance and informed her that she needed to improve in this area. In December 2000, Taylor underwent surgery to remove a mass from her abdomen and was out of work for 6 consecutive weeks. The company agreed that this absence would be deemed leave taken under the FMLA (although Taylor subsequently discovered that only 4 of the 6 weeks were actually recorded as FMLA leave).
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