A divided panel of the United States Court of Appeals for the Fourth Circuit recently held that employees cannot waive Family and Medical Leave Act (FMLA) claims without approval from the Department of Labor (DOL) or a court. See Taylor v. Progress Energy, Inc., --- F.3d ---, No. 04-1525, 2007 WL 1893362, at *1 (4th Cir. July 3, 2007). In doing so, the Court expressly rejected the DOL’s position that employees can waive claims for past violations of the FMLA, but cannot prospectively waive claims for future FMLA violations.

At issue before the Court was the meaning of a regulation promulgated by the DOL. Relying upon the plain language of the regulation stating that “employees cannot waive … their rights under FMLA,” the Court determined that: (1) the regulation’s prohibition on the waiver of rights necessarily includes a prohibition on the waiver of claims; and (2) the regulation did not, by its terms, distinguish between prospective and retrospective waivers.

To further justify its decision, the Court construed the FMLA as more analogous to the Fair Labor Standards Act (FLSA) than to federal anti-discrimination statutes such as Title VII or the Age Discrimination in Employment Act. The Court noted that the reason for the prohibition on private settlement of FLSA claims – namely, Congress’ intent to impose minimum uniform standards – applies equally to FMLA claims.

The Court also explained that, “[b]ecause the FMLA requirements increase the cost of labor, employers would have an incentive to deny FMLA benefits if they could settle violation claims for less than the cost of complying with the statute,” thus “gain[ing] a competitive advantage over employers complying with the FMLA’s minimum standards.”