Lawful FMLA Release: Northern District of Illinois Gives GREEN LIGHT

In a previous edition of the Informed Employer, we discussed the uncertainty surrounding the release of FMLA claims in severance agreements. In particular, we highlighted a decision from the United States Court of Appeals for the Fourth Circuit (South Carolina, North Carolina, Virginia, West Virginia, Maryland, and the District of Columbia), Taylor v. Progress Energy, which held that releases of present claims for past violations of the FMLA are invalid, absent the approval of the United States Department of Labor or a court. The uncertainty on this issue for employers in other jurisdictions has made the issue of obtaining viable FMLA releases tentative at best. For some employers in the Seventh Circuit, however, the task of entering into a lawful FMLA release just received - at least for the time being - a green light.

Six years after holding that all waivers of FMLA rights are unenforceable, a United States District Court for the Northern District of Illinois recently held in Butler v. Merrill Lynch Bus. Fin. Servs., Inc. that employees may release known and unknown claims for FMLA violations that occurred in the past. The Northern District of Illinois analyzed whether it should follow the Fourth Circuit's approach in Progress Energy or the Fifth Circuit's approach in Faris v. Williams WPC-I, Inc. In 2003, the Fifth Circuit held that the plain reading of § 825.220(d), a United States Department of Labor regulation implementing the FMLA, prohibits the prospective waiver of rights only and not retroactive settlement of claims arising prior to the release. The Northern District of Illinois chose between those two approaches because its appellate court, the United States Court of Appeals for the Seventh Circuit (Illinois, Indiana and Wisconsin), has yet to issue an opinion on this subject.

Ultimately, the Northern District of Illinois found the Fifth Circuit's approach more compelling. In reaching its conclusion, the Northern District of Illinois specifically analyzed whether the Progress Energy decision was consistent with (1) the express language of the regulations implementing the FMLA; (2) the relevant law with respect to the waiver of claims under similar employment-related statutes; and (3) the opinion of the federal agency charged with carrying out the FMLA, the United States Department of Labor. The Court found Progress Energy to be inconsistent in all respects.

Although the Merrill Lynch decision is good news for employers located in the Northern District of Illinois, as mentioned above, the Seventh Circuit has yet to espouse its own opinion on the issue of FMLA waivers. When it does, that opinion will be controlling for all federal courts in Illinois, Indiana, and Wisconsin. Although it is possible that the Seventh Circuit could adopt the Northern District of Illinois' analysis, employers nonetheless must proceed with great caution and be aware of the risks before asking employees to sign general release and severance agreements.

To find out if your general release and severance agreements comply with the law and can be enforced, contact one of Ice Miller's labor and employment attorneys.

Ryan Metzing is an associate in Ice Miller's Labor and Employment Practice Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.