You can include FMLA waiver in severance agreement

Until recently, it was unclear whether Pennsylvania employers could require employees to give up the right to sue for FMLA violations in exchange for severance payments. That was because the FMLA explicitly says employees can’t waive their FMLA rights as a condition of employment.

This left employers in a quandary. Naturally, if they wanted a clean break, they would want employees to give up the right to sue. Could they bargain with employees and offer a termination package in exchange for the employees giving up the right to sue for past FMLA violations? Or were employees free to sue even after taking their severance?

A few months ago, the U.S. District Court for the Eastern District of Pennsylvania ruled that employees could sue even if they explicitly agreed not to in exchange for a severance payment. But now that same court has reversed itself.

Recent case: Barbara Dougherty worked for TEVA Pharmaceuticals and was offered a severance payment of two months’ wages in exchange for waiving “any claims she might have under . . . the Americans with Disabilities Act . . . and any and all other federal, state or local statutory claims.” She took the money but sued for alleged FMLA violations anyway.

The court analyzed the FMLA and the U.S. Labor Department’s regulations and concluded that employees can waive the right to sue for an FMLA violation that already occurred. They cannot, however, give up the right to sue for future FMLA violations. (Dougherty v. TEVA Pharmaceuticals USA, No. 05-2336, ED PA, 2007)

Final note: Check with your attorney before drafting your next severance agreement. He or she can make sure you take advantage of this decision. And the decision will likely be appealed, so keep your eyes open for updates.