Taylor v. Progress Energy, Inc., 04-1525.

• Citation: 415 F.3d 364
• Decision Date: 20 July 2005
• Docket Number: No. 04-1525.,04-1525.
• Parties: Barbara TAYLOR, Plaintiff-Appellant, v. PROGRESS ENERGY, INCORPORATED, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

415 F.3d 364

Barbara TAYLOR, Plaintiff-Appellant, v. PROGRESS ENERGY, INCORPORATED, Defendant-Appellee.

No. 04-1525.

United States Court of Appeals, Fourth Circuit.

Argued February 1, 2005.

Decided July 20, 2005.

April Gordon Dawson, Dawson, & Dawson, P.A., Graham, North Carolina, for Appellant. Zebulon Dyer Anderson, Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, Raleigh, North Carolina, for Appellee.

Before MICHAEL and DUNCAN, Circuit Judges, and ROBERT E. PAYNE, United States District Judge for the Eastern District of Virginia, sitting by designation.

Reversed in part, vacated in part, and remanded by published opinion. Judge MICHAEL wrote the opinion, in which Judge DUNCAN and Judge PAYNE joined.

OPINION

MICHAEL, Circuit Judge.

Barbara Taylor sued Progress Energy, Inc. (Progress), the parent company of her former employer, Carolina Power & Light Company (CP & L), alleging violations of her rights under the Family and Medical Leave Act of 1993 (FMLA or Act), 29 U.S.C. § 2601 et seq., including the violation of (1) her substantive right to twelve weeks of unpaid leave to deal with a serious health condition and (2) her proscriptive right not to be discriminated or retaliated against for exercising her substantive FMLA rights. Progress argued in its motion for summary judgment that a release Taylor signed constituted a valid waiver of her FMLA claims. The district court granted Progress's motion, thereby rejecting Taylor's argument that 29 C.F.R. § 825.220(d), a Department of Labor (DOL) regulation, bars the waiver or release of FMLA rights. We conclude that § 825.220(d) prohibits the release as it relates to Taylor's FMLA claims and that the regulation is valid under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). We therefore reverse the district court's summary judgment order and remand for further proceedings.

I.

Because the district court granted Progress's motion for summary judgment, we state the facts in the light most favorable to Taylor, the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In 1993 Taylor started working for CP & L, a subsidiary of Progress, in the Document Services Unit at the Brunswick Nuclear Plant in North Carolina. She was originally hired as a technical aide and later became a data management assistant. In April 2000 she began experiencing extreme pain and swelling in her right leg. Taylor consulted her doctor, who ordered a week of bed rest that caused her to miss five days of work in late April or early May. The doctor informed Taylor that she would need to undergo a series of medical tests, including heart tests, in an effort to determine the cause of her symptoms. Thereafter, during the months of June and July, Taylor missed a number of days of work due to medical testing and treatment. Immediately after her first health-related absence in April or May, and again when she had to miss work for medical tests in June and July, Taylor asked a representative of CP & L's human resources department about the possibility of leave under the FMLA. The representative told Taylor that she was not eligible for FMLA leave because she had not been absent from work for more than five consecutive days at any one time.

In August 2000 Taylor underwent a spinal tap in a further effort to determine the cause of her health problems. Complications from this procedure caused her to miss a full week (five days) of work and additional days in the following weeks. In October Taylor received a written warning from her supervisor and the human resources representative stating that she "had exceeded the company's average sick time." J.A. 53. When Taylor sought guidance on how best to handle her health-related absences, she was told simply that she needed to improve her attendance. In November Taylor underwent more testing that kept her out of work for another five days. This testing revealed that an abdominal mass was the cause of the pain and swelling in Young's leg, and her doctor recommended immediate surgery to remove the mass. Taylor informed the human resources representative of the most recent test results and again asked whether any of her missed time from work qualified as FMLA leave. Again, the departmental representative answered that the missed time did not qualify because Taylor had not been out of work for more than five consecutive days. Taylor had surgery to remove the abdominal mass in December 2000. She was out of work for approximately six weeks and was told that this period qualified as FMLA leave. Taylor later discovered that she had been credited with FMLA leave for only four of these six weeks.

In February 2001 Taylor received her performance evaluation for the prior year. She was given a poor productivity rating because of her health-related absences, and she received only a one-percent pay raise while the average raise given by CP & L was approximately six percent. Soon thereafter (in March), Taylor learned that CP & L planned to lay off some of its employees in a reduction in force and that the company intended to select employees for dismissal based, at least in part, on past performance. Taylor contacted the DOL about CP & L's refusal to grant her FMLA leave and was told that her prior medical leave qualified under the FMLA and that FMLA absences could not be counted against her for any reason.

In an effort to save her job, Taylor asked CP & L on several occasions to correct her 2000 performance evaluation to reflect that her various absences qualified as FMLA leave. A human resources representative denied Taylor's requests, and the company informed her about two weeks later (on May 17, 2001) that her employment was being terminated. Taylor was told that she was eligible for benefits under CP & L's transition plan, which included seven weeks of paid administrative leave. She was also told that she would receive additional benefits (including monetary compensation) if she signed and returned a general release and severance agreement (the release) within forty-five days. Taylor signed and returned the release to CP & L on June 4. The relevant section reads as follows:

GENERAL RELEASE OF CLAIMS. IN CONSIDERATION OF SEVERANCE PAYMENTS MADE BY THE COMPANY, EMPLOYEE HEREBY RELEASES CP & L[AND] ITS PARENT . . . FROM ALL CLAIMS AND WAIVES ALL RIGHTS EMPLOYEE MAY HAVE OR CLAIM TO HAVE RELATING TO EMPLOYEE'S EMPLOYMENT WITH CP & L . . . OR EMPLOYEE'S SEPARATION THEREFROM, arising from events which have occurred up to the date Employee executes this General Release, including but not limited to, claims . . . for relief, including but not limited to, front pay, back pay, compensatory damages, punitive damages, injunctive relief, attorneys' fees and costs or any other remedy, arising under: (i) the Age Discrimination In Employment Act of 1967, as amended, ("ADEA"); (ii) the Employee Retirement Income Security Act of 1974, as amended, ("ERISA"); (iii) Title VII of the Civil Rights Act of 1964, as amended; (iv) the Energy Reorganization Act and Atomic Energy Act, both as amended; (v) the Americans With Disabilities Act ("ADA"); (vi) any wrongful termination claim under any state or federal law; (vii) claims for benefits under any employee benefit plan maintained by CP & L related to service credits or other issues; (viii) claims under the Older Workers Benefit Protection Act of 1990 ("OWBPA"); and (ix) any other federal, state or local law.

J.A. 18. Thus, while the release does not mention FMLA claims by name, it does include a catchall category for "other federal. . . law" claims besides those specifically listed. Id. On July 20, 2001, CP & L sent Taylor a check for approximately $12,000 pursuant to the terms of the release and related documents. (Taylor did not return the money when she later filed this action against Progress.)

After her separation from CP & L, Taylor again contacted the DOL concerning the company's failure to designate her health-related absences as FMLA leave, the resulting negative performance evaluation, and the company's use of the negative evaluation in its decision to terminate her employment. Taylor was told that she could try to resolve her concerns directly with CP & L, so she contacted the director of the company's human resources department in January 2002. The director corrected Taylor's performance evaluation but failed to adjust her February 2001 salary increase to reflect the improved evaluation and failed to address any of the other issues Taylor had raised.

Thereafter, on May 9, 2003, Taylor sued Progress in federal court under 29 U.S.C. § 2617, alleging that the company had violated the FMLA by (1) not fully informing her of her FMLA rights, (2) improperly denying her requests for medical leave, (3) terminating her employment because of her medical absences, and (4) terminating her employment because she complained about the company's violations of the FMLA. The complaint sought an injunction directing Progress to rehire Taylor, compensatory damages, liquidated damages, and attorneys' fees and costs. Progress filed a motion for summary judgment, arguing that the release was valid and provided the company a complete defense to Taylor's suit. In response Taylor contended that 29 C.F.R. § 825.220(d) — which provides that "[e]mployees cannot waive, nor may employers induce employees to waive, their rights under [the] FMLA" — barred enforcement of the release insofar as her FMLA rights are concerned. At the same time, Taylor moved to amend her complaint to substitute CP & L as a defendant and to add an allegation that CP & L's actions had been willful. The district court granted Progress's motion for summary judgment, holding that § 825.220(d) does not render the release unenforceable.

The district court denied as futile Taylor's motion to amend her complaint, concluding that the release would...