Hartford Fire Insurance Company (Hartford) employed Blanche Paylor as a Long Term Disability Analyst III. Between January 2008 and September 2009, Paylor requested and received 390 hours of leave under the Family Medical Leave Act (FMLA). Paylor submitted a request for additional FMLA leave in or around early September 2009. Hartford either acknowledged or approved the request on September 4, 2009. On September 11, 2009, Paylor received a performance evaluation in which she was warned about/criticized for her job performance. On September 16, 2009, Hartford provided Paylor the following choice: she could accept a one-time offer of 13 weeks of severance benefits in exchange for signing a severance agreement under which she waived any claims she might have under the FMLA, or Paylor could agree to a performance improvement plan that would require her to meet various performance benchmarks or face termination. Paylor signed the severance agreement on September 17, 2009.
Paylor then joined two other plaintiffs in filing a complaint against Hartford for FMLA violations, alleging that Hartford interfered with her FMLA rights and retaliated against her for exercising her rights. Hartford filed a motion for summary judgment, arguing that Paylor waived her FMLA claims when she signed the severance agreement because she knowingly and voluntarily signed the agreement after the events allegedly giving rise to her FMLA claims occurred. The district court granted summary judgment to Hartford, and Paylor appealed. The Court of Appeals for the Eleventh Circuit affirmed.
On appeal, Paylor argued that she did not waive her FMLA rights because the FMLA does not permit employees to waive "prospective rights" without Department of Labor or court approval, and that her rights in this case were "prospective" because she had an outstanding request for FMLA leave when she signed the agreement.
Title 29, section 825.220 of the Code of Federal Regulations, one of the Department of Labor's FMLA regulations, provides that employees cannot waive their prospective rights under the FMLA, but also states that "[t]his does not prevent the settlement or release of FMLA claims by employees based on past employer conduct…." Paylor argued that "prospective rights" meant any unexercised rights of a current eligible employee to take FMLA leave and to be restored to the same or equivalent position after the leave. The Court of Appeals disagreed, stating that prospective rights should be interpreted as rights that allow an employee to invoke FMLA protections at some unspecified time in the future, and that a prospective waiver is a waiver of something that has not yet occurred. For instance, an employer could not offer all new employees a one-time cash payment in exchange for a waiver of claims for any future FMLA violations.
In this case, Hartford did not ask Paylor to waive claims for any future FMLA violations, but to release any claims she might have based on past FMLA violations. All of the conduct Paylor complained about occurred before she signed the severance agreement. Therefore, Paylor settled claims based on past employer conduct, and the district court did not err when it concluded that the agreement was valid.
Paylor also argued that her waiver was not "knowing and voluntary." In considering whether a waiver was knowing and voluntary, courts apply the totality of the circumstances test, and evaluate the following factors: (1) the education and business experience of the employee; (2) the time the employee spent considering the agreement before signing it; (3) the clarity of the language in the agreement; (4) the employee's opportunity to consult with an attorney; (5) whether the employer encouraged or discouraged consultation with an attorney; and (6) the consideration given in exchange for the release compared to the benefits the employee was already entitled to receive.
In this case, Paylor was 56-years-old when she signed the agreement, and she had worked in the insurance industry for over 20 years. The agreement expressly stated that Paylor had 21 days to review it. The agreement was clearly worded, and Paylor acknowledged in her deposition that she understood the waiver language and that the agreement recommended she consult with an attorney. By signing the agreement, Paylor received severance pay to which she was not otherwise entitled. Thus, the Court of Appeals held that there was no material issue of fact as to whether Paylor's waiver was knowing and voluntary, and the district court did not err by granting summary judgment in favor of Hartford.
Because this case was decided by the Court of Appeals for the Eleventh Circuit (which has jurisdiction over the states of Alabama, Florida, and Georgia), this opinion is not binding on the Ninth Circuit. However, the Ninth Circuit could view it as persuasive authority if faced with a similar issue.
Just as an employee may not waive his or her prospective rights, employee associations cannot waive the prospective rights of their represented employees. A collective bargaining representative may not, for instance, trade the represented employees' rights to take FMLA leave for another benefit offered by the employer.
Paylor v. Hartford Fire Insurance Company (11th Cir. 2014) __ F.3d __ [2014 WL 1363544].