Fourth Circuit Reissues FMLA Decision On Retrospective Waiver
The Fourth Circuit this week finally issued its awaited panel rehearing decision in Taylor v. Progress Energy, Inc., a very significant case under the Family and Medical Leave Act (FMLA).
In a split decision, the panel reinstated its original decision against the employer (Progress Energy), holding not only that a prospective waiver of FMLA rights is invlaid, but also that retrospective waiver is invalid, under a Department of Labor (DOL) regulation stating, "Employees cannot waive, nor may employers induce employees to waive, their rights under FMLA." 29 C.F.R. 825.220(d). Thus, under the panel majority's reasoning, an employee can't release an FMLA claim (in a settlement) without approval from a court or the DOL.
The panel majority reached this result even though the DOL, in an amicus brief, weighed in with an interpretation of its regulation and maintained that the regulation bars only the prospective waiver of FMLA rights, not the release or settlement of claims based on past violations of the FMLA. The Fourth Circuit panel concluded that the DOL's interpretation of its own regulation was inconsistent with the regulation's plain meaning and thus not entitled to deference. This decision is in tension with the policy of encouraging the private settlement of claims. Indeed, under Title VII and the Age Discrimination in Employment Act (ADEA), the retrospective waiver of claims is allowed. As a result of this decisions, employer-employee settlements of claims must be approved by the DOL or courts.
Judge Allyson Duncan dissented. She had joined the earlier panel decision, the one that issued before rehearing. But she flipped her vote, concluding that the DOL's amicus brief on rehearing, which injected into the case for the first time the DOL's interpretation of its regulation, changed the outcome. The DOL's interpretation is entitled to deference, she insisted.
This case should be heard en banc. Because a district judge sitting by designation is part of the majority, the two Fourth Circuit judges on the panel are split, which makes this case appropriate for en banc review.
In the end, if the panel decision stands, this case is destined to travel up I-95, from Richmond to Washington, since the Fourth Circuit panel majority disregarded the DOL's interpretation of its own regulation, and that interpretation was not plainly erroneous or inconsistent with the regulation. See Auer v. Robbins, 519 U.S. 452, 461 (1997) (deference to DOL's interpretation of its regulation presented in amicus brief).
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One more interesting thing about this case. Judge Duncan's dissent disapproved of the DOL's clumsy handling of this case, making an entry as an amicus only after the panel issued its original decision: "timely intervention by the DOL before we issued Taylor I would have obviated the necessity of an additional hearing in this appeal, with its attendant expenditure of judicial and party resources," Judge Duncan wrote.
This brings to mind what a different panel wrote last summer in an order prepared by Judge Wilkinson in LaRue v. DeWolff, Boberg & Assoc., Inc. In LaRue, as in this week's Taylor v. Progress Energy case, the DOL waited until after the panel issued its decision before seeking leave to appear as an amicus urging that the panel got it wrong. Here is what the Fourth Circuit said last summer in LaRue:
"With respect to the Secretary's views, the court notes that they are always welcome on any matter in which the Secretary has an interest. The timely submission of those views, however, will assist the court in giving them the attention they deserve. Initial submission of these views in a petition for rehearing--and an untimely one at that--affords neither the litigants or this court a proper chance to review the case in single, rather than piece-meal, fashion. Thus, the Secretary's belated entry into [Taylor v. Progress Energy, Inc.] was a discourtesy both to the parties in that case and to the court.
"The same holds true of the even more untimely filing here. . . . [W]aiting until a petition for rehearing has been filed is a disfavored litigation tactic and fails to serve the litigants' interest in having all views considered thoroughly at the initial briefing and argument stage. While it may suit the agency's convenience to troll for panel results to which it takes exception, such a practice is not consistent with the orderly and conscientious disposition of claims in an appellate court. . . . Having served notice that untimely submissions will henceforth be disfavored, the court will out of respect for the Secretary address its views in the instant case."
In a split decision, the panel reinstated its original decision against the employer (Progress Energy), holding not only that a prospective waiver of FMLA rights is invlaid, but also that retrospective waiver is invalid, under a Department of Labor (DOL) regulation stating, "Employees cannot waive, nor may employers induce employees to waive, their rights under FMLA." 29 C.F.R. 825.220(d). Thus, under the panel majority's reasoning, an employee can't release an FMLA claim (in a settlement) without approval from a court or the DOL.
The panel majority reached this result even though the DOL, in an amicus brief, weighed in with an interpretation of its regulation and maintained that the regulation bars only the prospective waiver of FMLA rights, not the release or settlement of claims based on past violations of the FMLA. The Fourth Circuit panel concluded that the DOL's interpretation of its own regulation was inconsistent with the regulation's plain meaning and thus not entitled to deference. This decision is in tension with the policy of encouraging the private settlement of claims. Indeed, under Title VII and the Age Discrimination in Employment Act (ADEA), the retrospective waiver of claims is allowed. As a result of this decisions, employer-employee settlements of claims must be approved by the DOL or courts.
Judge Allyson Duncan dissented. She had joined the earlier panel decision, the one that issued before rehearing. But she flipped her vote, concluding that the DOL's amicus brief on rehearing, which injected into the case for the first time the DOL's interpretation of its regulation, changed the outcome. The DOL's interpretation is entitled to deference, she insisted.
This case should be heard en banc. Because a district judge sitting by designation is part of the majority, the two Fourth Circuit judges on the panel are split, which makes this case appropriate for en banc review.
In the end, if the panel decision stands, this case is destined to travel up I-95, from Richmond to Washington, since the Fourth Circuit panel majority disregarded the DOL's interpretation of its own regulation, and that interpretation was not plainly erroneous or inconsistent with the regulation. See Auer v. Robbins, 519 U.S. 452, 461 (1997) (deference to DOL's interpretation of its regulation presented in amicus brief).
* * *
One more interesting thing about this case. Judge Duncan's dissent disapproved of the DOL's clumsy handling of this case, making an entry as an amicus only after the panel issued its original decision: "timely intervention by the DOL before we issued Taylor I would have obviated the necessity of an additional hearing in this appeal, with its attendant expenditure of judicial and party resources," Judge Duncan wrote.
This brings to mind what a different panel wrote last summer in an order prepared by Judge Wilkinson in LaRue v. DeWolff, Boberg & Assoc., Inc. In LaRue, as in this week's Taylor v. Progress Energy case, the DOL waited until after the panel issued its decision before seeking leave to appear as an amicus urging that the panel got it wrong. Here is what the Fourth Circuit said last summer in LaRue:
"With respect to the Secretary's views, the court notes that they are always welcome on any matter in which the Secretary has an interest. The timely submission of those views, however, will assist the court in giving them the attention they deserve. Initial submission of these views in a petition for rehearing--and an untimely one at that--affords neither the litigants or this court a proper chance to review the case in single, rather than piece-meal, fashion. Thus, the Secretary's belated entry into [Taylor v. Progress Energy, Inc.] was a discourtesy both to the parties in that case and to the court.
"The same holds true of the even more untimely filing here. . . . [W]aiting until a petition for rehearing has been filed is a disfavored litigation tactic and fails to serve the litigants' interest in having all views considered thoroughly at the initial briefing and argument stage. While it may suit the agency's convenience to troll for panel results to which it takes exception, such a practice is not consistent with the orderly and conscientious disposition of claims in an appellate court. . . . Having served notice that untimely submissions will henceforth be disfavored, the court will out of respect for the Secretary address its views in the instant case."
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