Virginia Lawyers Weekly

WASHINGTON—The Supreme Court on Monday rejected, without comment, an appeal by Progress Energy Inc. in a labor law dispute.

At issue is whether companies and employees can settle Family and Medical Leave Act disputes without court oversight. The law provides workers the right to take 12 weeks of unpaid leave for health reasons or to care for a child or sick family member.

A 1995 Labor Department rule said that employees cannot waive their rights under the 1993 act, nor can employers encourage them to do so. The Raleigh, N.C.-based utility argues the provision applies only to the waiver of future rights, not to the settlement of past claims.

The dispute began when Barbara Taylor, an employee of a Progress Energy subsidiary, was laid off in 2001. In return for a severance package of approximately $12,000, she signed a form waiving her right to sue under “federal, state and local laws.”

Yet Taylor sued the subsidiary, Carolina Power & Light, two years later, arguing that CP&L laid her off in part because she missed work due to frequent medical absences. Those absences should have been protected under the Family and Medical Leave Act, she said.

A federal district court dismissed her complaint, but the 4th U.S. Circuit Court of Appeals ruled that employees can’t be induced to waive their FMLA rights and reinstated the suit.

Progress Energy and several business groups urged the high court to reverse the appeals court’s ruling. The company said in court filings that the decision will make it much more difficult for companies and employees to settle their disputes out of court.

But Solicitor General Paul Clement, the Bush administration’s lawyer, urged the high court in May to turn down the case. While Clement, who has since resigned his position, agreed with Progress Energy that the appeals court’s ruling was incorrect, he said the Labor Department is issuing a new rule that makes clear the waiver prohibition applies only to prospective rights, rather than past claims.

That rule will render the broader issues in the case moot, he said.

The case is Progress Energy v. Barbara Taylor, 07-539.

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