Issue: Severance packages usually ask departing employees to waive their rights to file various employment lawsuits.
Risk: If you includein that mix, you'll risk having the whole package invalidated.
Action: Scan your severance packages to make sure they don't ask staff to sign away. Severance packages offer great peace of mind. Written correctly, they buy insurance against many kinds of employment-related lawsuits. But written incorrectly, they can cause more harm than good.
One way to draft a lawsuit-waiver incorrectly is to include FMLA rights in that waiver. As a new court ruling clarifies, courts won't uphold severance-package waivers that ask employees to give up their FMLA rights.
Labor Departmentspecifically state that "employees cannot waive, nor may employers induce employees to waive, their rights under the FMLA."
So, any severance deal that seeks to waive those rights, such as the one in the case below, will be deemed unenforceable. (That is, unless the employer has received prior approval of the waiver from a court or the U.S. Labor Department, which is rare.)
Case in point: Progress Energy laid off Barbara Taylor in a reduction in force. Taylor elected to take a $12,000 severance payment in exchange for agreeing not to sue for employment-law violations.
Soon after cashing the check, Taylor filed an FMLA lawsuit. Progress Energy argued that she lost her right to an FMLA lawsuit when she signed the waiver and took the cash. But a federal appeals court disagreed, noting that Labor Department regulations prohibit employees from waiving their FMLA rights. (Taylor v. Progress Energy Inc., No. 04-1525, 4th Cir., 2005)
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