Miller v. RK Grocers, LLC et al

Filing 35

OPINION AND ORDER Granting Defendant's Motions for Summary Judgment (Dkts. 24 , 27 ). Signed by District Judge Mark A. Goldsmith. (Sandusky, K)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

DEENA MILLER,
Plaintiff,

Civil Action No. 15-CV-10806
HON. MARK A. GOLDSMITH

vs.
RK GROCERS, LLC and
SPARTANNASH ASSOCIATES, LLC,
Defendants.
_______________________________/

OPINION AND ORDER GRANTING DEFENDANTS’ MOTIONS FOR SUMMARY
JUDGMENT (Dkts. 24, 27)
I. INTRODUCTION
Plaintiff Deena Miller brought claims against Defendants RK Grocers, LLC (“RK”) and
SpartanNash Associates, LLC (“SpartanNash”) pursuant to the Family Medical Leave Act
(“FMLA”), 29 U.S.C. § 2601, et seq., alleging that both Defendants violated her right to job
restoration as guaranteed by the Act. During the Court’s initial scheduling conference, and at the
parties’ request, the Court agreed to entertain early motions for summary judgment on the
limited issue of whether a contractual release bars Plaintiff’s present claims against Defendants.
See 6/18/2015 Order (Dkt. 23). As explained fully below, the Court now concludes that the
release bars Plaintiff’s claims against Defendant SpartanNash, entitling it to judgment as a matter
of law. Because the release absolved SpartanNash of any further or continuing obligations under
the FMLA, RK also had no such duties to Plaintiff — even assuming it is a successor in interest
under the statute. Accordingly, Plaintiff cannot proceed against RK on her claim, and it, too, is
entitled to judgment as a matter of law.

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II. BACKGROUND
From December 29, 2008 until her termination on May 27, 2014, Plaintiff was employed
as a deli clerk at SpartanNash’s Pontiac, Michigan grocery store. Compl. ¶ 5 (Dkt. 1). On April
23, 2014, SpartanNash informed Plaintiff in writing that it had entered into an agreement to sell
its Pontiac location, and, consequently, Plaintiff’s employment with SpartanNash would
terminate on or before May 31, 2014. SpartanNash Br. at 2 (Dkt. 24); see also 4/23/2014 Letter,
Ex. A to SpartanNash Mot., at 26 of 39 (cm/ecf page) (Dkt. 24). The letter also explained to
Plaintiff that employees could (i) apply for and receive consideration for continued employment
at the store under new management; (ii) apply for open positions for which they were qualified at
other SpartanNash stores (although employees would not have “bumping rights to other
SpartanNash stores”); or (iii) receive a lump sum severance payment upon termination.
SpartanNash Br. at 2; 4/23/2014 Letter at 26 of 39 (cm/ecf page). The letter stated that should an
employee receive and accept an offer of continued employment with either the store’s new
owner or with SpartanNash, or otherwise accept a third-party offer of employment, the employee
would be ineligible for the severance program. 4/23/2014 Letter at 26 of 39 (cm/ecf page).
On May 12, 2014, Plaintiff requested FMLA leave, to begin retroactively on May 9,
2014. SpartanNash Br. at 2; Compl. ¶¶ 10-11. Plaintiff’s request was approved through July 28,
2014. FMLA Designation Notice, Ex. 1 to Compl. (Dkt. 1-2).
On May 27, 2014, SpartanNash sold its Pontiac store location to RK. Compl. ¶ 7. That
same day, SpartanNash terminated Plaintiff as a result of the sale. Id. ¶ 12. On June 13, 2014,
Plaintiff applied, and was approved, for unemployment insurance benefits beginning June 8,
2014. SpartanNash Br. at 3; see also Unemployment Insurance Benefits, Ex. C to SpartanNash
Mot., at 32 of 39 (cm/ecf page) (Dkt. 24).
On June 30, 2014, Plaintiff applied for employment with RK, but RK elected not to hire
her. Compl. ¶ 13; RK Br. at 7 (Dkt. 27). Also on June 30, 2014, Plaintiff signed a separation
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agreement with SpartanNash. Pl. Resp. at 2 (Dkt. 30); SpartanNash Br. at 3; see also Separation
Agreement, Ex. D to SpartanNash Mot., at 37 of 39 (cm/ecf page) (Dkt. 24).
The separation agreement sets forth the following relevant provisions:


“[Plaintiff’s] employment with the Company shall be considered
terminated as of May 27, 2014.”



“By signing this Agreement, [Plaintiff] release[s] the Company
from any known or unknown claims that [she] may have
against the Company.” “The release applies to the Company . . .
and its directors, officers, employees, successors and assigns. It
also includes any employee benefit plans or funds sponsored or
administered by the Company [except vested benefits in retirement
plans].” “This is a general release that applies to any and all
claims, whether known or unknown, arising out of [Plaintiff’s]
employment with the Company or the termination of [Plaintiff’s]
employment. This release specifically includes any claims in
existence at the time [Plaintiff] signed this Agreement arising
under . . . any and all other federal, state, and local statutes and
claims for wrongful discharge, whether based on contract, tort, or
public policy.” The release “does not apply to claims that may not
be released as a matter of law.”



“[Plaintiff] understand[s] and agree[s] that the termination of
[her] employment with the Company is permanent, and that
[she] will have no right to future employment with the
Company.”



Plaintiff had the right to revoke the agreement within seven days
after she signed it, and the agreement would not become effective
or enforceable unless the seven-day revocation period had lapsed
without Plaintiff exercising her right of revocation.

See Separation Agreement at 1-3 (37-39 of 39 (cm/ecf pages)) (emphasis added, in part).1 The
separation agreement is signed by Plaintiff and the human resource director for SpartanNash. Id.
at 3 (39 of 39 (cm/ecf page)). RK was not a party to the agreement.
On November 11, 2014, Plaintiff sent RK a letter notifying it of its purported obligation
to restore Plaintiff to her position, because RK was a successor in interest to SpartanNash.
Compl. ¶ 17. Subsequently, on March 5, 2015, Plaintiff filed suit alleging: (i) that SpartanNash
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The “Company” is defined as SpartanNash and its subsidiaries and affiliates. Separation
Agreement at 1 (37 of 39 (cm/ecf page)).
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violated the FMLA in failing to restore Plaintiff to equivalent available positions within
geographically proximate worksites; and (ii) that RK “interfered with and denied” Plaintiff’s
FMLA rights by refusing to restore Plaintiff to her former position. Id. ¶¶ 18, 24-25.
III. STANDARD OF DECISION
A court “shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). The Sixth Circuit has stated the following with respect to summary judgment
motions:
[C]redibility judgments and weighing of the evidence are
prohibited. Rather, the evidence should be viewed in the light
most favorable to the non-moving party. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255 (1986). Thus, the facts and any
inferences that can be drawn from those facts must be viewed in
the light most favorable to the non-moving party. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
Biegas v. Quickway Carriers Inc., 573 F.3d 365, 373 (6th Cir. 2009) (brackets omitted).
IV. ANALYSIS
There is no dispute as to the underlying events that comprise the relevant facts necessary
to dispose of the current motions, although the parties do disagree as to the characterization and
significance of those facts. As discussed in detail below, the Court concludes first that Plaintiff
validly waived any claims she had arising out of SpartanNash’s conduct that occurred prior to
the execution of the separation agreement. The Court further concludes that, despite Plaintiff’s
characterization to the contrary, the conduct comprising the alleged FMLA violation — i.e.,
SpartanNash’s action in terminating Plaintiff and foreclosing her right to future employment —
did occur prior to the execution of the agreement.

Therefore, Plaintiff validly released

SpartanNash from that claim, entitling SpartanNash to summary judgment on that basis.
Additionally, because an employee’s entitlements under the FMLA are the same under a
successor in interest as they would have been under a predecessor employer, RK’s obligations
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under the FMLA are coextensive with those of SpartanNash’s — assuming RK is a successor in
interest. And once Plaintiff signed the separation agreement, SpartanNash owed her nothing
further, nor were there any FMLA duties for RK to inherit. Thus, RK also is entitled to summary
judgment.
A. Liability as to SpartanNash
As an initial matter, there is no suggestion that Plaintiff’s FMLA claims do not fall within
the plain language of the release. Indeed, the language broadly encompasses “any and all
claims” arising out of Plaintiff’s employment or termination, and explicitly includes those claims
arising under federal statutes. E.g., Int’l Union, UAW, and UAW Local 1869 v. Gen. Motors
LLC, 529 F. App’x 760, 765-766 (6th Cir. 2013).2 Rather, the heart of the matter is whether
Plaintiff’s release is valid, given a Department of Labor (“DOL”) regulation, 29 C.F.R.
§ 825.220(d), which prohibits employees from waiving their “prospective rights” under the
FMLA.
SpartanNash’s position is simply that, because Plaintiff signed the separation agreement
after she was terminated, her FMLA rights were not prospective in nature and the release is
valid. SpartanNash Br. at 10. Plaintiff takes a different view, contending that her lawsuit is
predicated not on the initial termination decision, but, rather, on SpartanNash’s subsequent
failure to restore Plaintiff to an equivalent position within a geographically proximate area. Pl.
Resp. at 7-8. Plaintiff’s theory is that, because her right to restoration under the FMLA did not
arise until the end of her leave (July 28), the right was prospective as of the date she signed the
agreement (June 30), and therefore she could not validly release it. Id. at 5-6. At issue then, is
what it means to have a “prospective right” within the meaning of the regulation.

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In any event, by not addressing SpartanNash’s argument that the release language does
encompass her FMLA claim, Plaintiff has waived any argument she may have on that issue. See
Gomery v. Cont’l Cas. Co., No. 1:13-cv-947, 2014 WL 4209648, at *4 (W.D. Mich. Aug. 25,
2014) (collecting cases).
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Upon review of the relevant legal landscape, the Court concludes that the proper focus is
on the timing of the conduct allegedly denying or interfering with FMLA rights relative to the
execution of any release. On this issue, SpartanNash has the better argument, because the
conduct that actually gave rise to the alleged FMLA violation occurred, at the latest, when
Plaintiff was presented with and signed the separation agreement. By that point, SpartanNash
had clearly communicated to Plaintiff that her employment was terminated, that the termination
was “permanent,” and that she would have “no right to future employment” — i.e., she would
not be restored to her job. Plaintiff’s suggestion that the “failure to restore” conduct could not
have occurred until after the signing of the agreement is unpersuasive, because it departs from a
common-sense understanding of how employers and employees communicate their intentions
regarding the termination of their relationship. Plaintiff’s theory prohibiting the release of a
claim for denial of future restoration — when the parties had clearly understood such restoration
would not come about — would also effectively render post-dispute settlements meaningless,
contrary to the intent expressed by the regulation.
A brief examination of the history behind the regulation is instructive. Prior to 2009, the
regulation broadly prohibited any waiver of FMLA rights, rather than prohibiting only
prospective waivers:
Employees cannot waive, nor may employers induce employees to
waive, their rights under FMLA. For example, employees (or their
collective bargaining representatives) cannot “trade off” the right
to take FMLA leave against some other benefit offered by the
employer.
29 C.F.R. § 825.220(d) (2008). For some time, there was a circuit split over the precise meaning
of that language. Some courts applied the language to bar all releases of claims not approved by
a court or the DOL, even releases given after a settlement had been reached, while others read
the regulation as barring only “prospective” waivers of rights. Compare Taylor v. Progress

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Energy, Inc. (“Taylor I”), 415 F.3d 364, 368 (4th Cir. 2005), superseded by regulation, with
Faris v. Williams WPC-I, Inc., 332 F.3d 316, 320 (5th Cir. 2003).
Because the latter view represented the view of the DOL, the regulation was amended in
2009 to clarify that intent. The amended regulation provides, in relevant part:
Employees cannot waive, nor may employers induce employees to
waive, their prospective rights under FMLA. For example,
employees (or their collective bargaining representatives) cannot
trade off the right to take FMLA leave against some other benefit
offered by the employer. This does not prevent the settlement or
release of FMLA claims by employees based on past employer
conduct without the approval of the Department of Labor or a
court.
29 C.F.R. § 825.220(d) (2009) (emphasis added).
In its explanation of the changes, the DOL “make[s] clear that an employee may waive
his or her FMLA claims based on past conduct by the employer, whether such claims are filed or
not filed, or known or unknown to the employee as of the date of signing the settlement or the
severance agreement.” The Family and Medical Leave Act of 1993, 73 Fed. Reg. 67934-01,
67988 (Nov. 17, 2008). By expressly permitting the release of claims based on “past employer
conduct,” the amended regulation sought to make the timing of the conduct the key to
determining whether a release was valid or not. See also Taylor v. Progress Energy, Inc.
(“Taylor II”), 493 F.3d 454, 458 (4th Cir. 2007) (describing the DOL’s argument as
distinguishing between prospective waivers for future violations and retrospective waivers for
past violations), superseded by regulation.
In keeping with this interpretation, courts have focused on the timing of the allegedly
unlawful conduct vis-à-vis the release, and have rejected the view that a release is prospective if
it covers a claim for future leave or restoration that is already fully identified at the time the
release is signed. In one of the most widely cited cases on the issue, Paylor v. Hartford Fire
Insurance Company, 748 F.3d 1117 (11th Cir. 2014), the Eleventh Circuit rejected an argument
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essentially identical to the one presently advanced by Plaintiff. In Paylor, the plaintiff sought
FMLA leave and was ultimately presented with a choice by her employer: accept a severance
package with a release of the FMLA claim or agree to a performance-improvement plan. Id. at
1120. Although she signed the severance agreement, she brought an FMLA action claiming that
the release was unenforceable as a waiver of “prospective rights,” which she defined as “the
unexercised rights of a current eligible employee to take FMLA leave and to be restored to the
same or an equivalent position after the leave.” Id. at 1123. The Eleventh Circuit disagreed,
holding that “‘prospective rights’ under the FMLA are those allowing an employee to invoke
FMLA protections at some unspecified time in the future.” Id. (emphasis added). The plaintiff’s
release was not prospective, because the severance agreement did not ask her “to assent to a
general exception to the FMLA, but rather to a release of the specific claims she might have
based on past interference.” Id. at 1123-1124. Because the cause of action under the FMLA
attaches to conduct and not “some free-floating set of ‘unexercised’ FMLA rights,” and given
that the regulation explicitly allows for settlement of claims based on past employer conduct, the
Eleventh Circuit held that “‘prospective’ waiver means only that an employee may not waive
FMLA rights, in advance, for violations of the statute that have yet to occur.” Id.
Other courts have similarly concluded that a release of FMLA claims given as part of a
termination of the employer-employee relationship validly includes claims for loss of job
restoration. See Gleich v. St. Andrew Sch., No. 2:10-cv-894, 2011 WL 4573367, at *1-2, 5
(S.D. Ohio Sept. 30, 2011) (rejecting argument that release waived prospective rights when
plaintiff signed away any right to future employment while she was on leave); Camp v.
Bridgeway Ctr. Inc., No. 3:14cv123/MCR/EMT, 2014 WL 5430277, at *4-5 (N.D. Fla. Oct. 22,
2014) (rejecting plaintiff’s argument that in executing a receipt for back wages, liquidated
damages, employment benefits, or other compensation and waiving claims for wages for the

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specified period she retained right to bring suit seeking reinstatement based upon prior
termination, because release covered the prior employer conduct at issue, i.e., the termination).
Our Plaintiff is similarly situated. She claims that the waiver she signed was prospective,
because it covered a yet-unexercised right to restoration. But like the plaintiffs in Paylor and the
other authorities cited above, Plaintiff had a right that was far from unspecified. It was a
specified right that she gave up — a right to be restored to her position on July 28, 2014.
SpartanNash’s manifest intent to deny Plaintiff restoration was unquestionably part of the
conduct that predated the execution of the release.
Notably, there was nothing ambiguous about the termination’s impact on Plaintiff’s right
of restoration. The separation agreement unambiguously manifested both that her termination
was permanent and that she had no right to future employment with SpartanNash.

See

Separation Agreement at 2 (38 of 39 (cm/ecf page)). This was all in accord with the information
contained in the letter provided to Plaintiff back in April.

Indeed, Plaintiff applied for

unemployment benefits on the grounds that she had been “laid off” from SpartanNash even
before she signed the separation agreement. See Unemployment Insurance Benefits at 1 (32 of
39 (cm/ecf page)). To agree with Plaintiff that the termination did not encompass the loss of job
restoration would defy the economic reality of the parties’ actions and is at odds with the
conventional manner in which employers and employees alike communicate expectations and
manage the termination of their relationship.
Plaintiff’s attempt to segregate the alleged failure to restore from the actual termination is
further undermined by court decisions rejecting her argument. See Killian v. Yorozu Auto.
Tenn., Inc., 454 F.3d 549, 556 (6th Cir. 2006) (concluding that the employer interfered with the
plaintiff’s right to restoration under the FMLA when it terminated her); Gleich, 2011 WL
4573367, at *5 (holding that “any claim to reinstatement to [plaintiff’s] job would have accrued
at such point when Defendants interfered with her right to job restoration after taking leave” by
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terminating her, and further concluding that “[plaintiff] forfeited [ ] a claim for retaliatory
discharge, and any remedy of reinstatement, when she waived those claims by executing the
release and receiving compensation”).
And finally, Plaintiff’s proposed framework would work against the regulation’s explicit
allowance for employees to release and/or settle FMLA claims arising out of prior employer
conduct. See 29 C.F.R. § 825.220(d). To adopt Plaintiff’s argument would subject employers to
lingering liability for the denial and/or interference of the right to leave or to job-restoration,
even after the employee settled or released the employer from liability for the underlying conduct
that triggered the violation in the first place. This would effectively render releases contained in
severance or separation agreements meaningless.
There is no indication that the DOL intended such a result. Indeed, the DOL “believes
[out-of-court settlements] promote[ ] the efficient resolution of FMLA claims[,] and [it]
recognizes the common practice of including a release of a broad array of employment claims in
severance agreements.” The Family and Medical Leave Act of 1993, 73 Fed. Reg. at 67988; see
also Taylor II, 493 F.3d at 459 (referencing the DOL’s argument that a reading of the pre-2009
regulation as applying only to prospective waivers “is consistent with the well-accepted policy
disfavoring prospective waivers [of rights], but encouraging settlement of claims, in employment
law.” (quoting the DOL’s amicus brief)); Dougherty v. Teva Pharm. USA, Inc., No. 05-2336,
2007 WL 1165068, *6 (E.D. Pa. Apr. 9, 2007) (“[I]nsofar as the regulation bars the prospective
waiver of rights, but permits (if not encourages) the private settlement of FMLA claims, the
DOL has elected to treat the settlement of FMLA claims as being no different from the
settlement of other federal employment claims.” (collecting cases)).
In sum, because the conduct that gave rise to the alleged violation occurred prior to the
execution of the separation agreement, Plaintiff validly released any claims she may have arising
out of that conduct, and SpartanNash is entitled to summary judgment on that basis.
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B. Liability as to RK
Any potential liability RK may suffer under the FMLA is predicated on it being a
successor in interest to SpartanNash. Compl. ¶¶ 15-16. Specifically, Plaintiff asserts that, as a
successor in interest, RK had a duty to restore Plaintiff to her former position. Id. ¶ 17.
The regulation governing a successor in interest’s obligations under FMLA provides as
follows:
When an employer is a successor in interest, employees’
entitlements are the same as if the employment by the predecessor
and successor were continuous employment by a single employer.
For example, the successor, whether or not it meets FMLA
coverage criteria, must grant leave for eligible employees who had
provided appropriate notice to the predecessor, or continue leave
begun while employed by the predecessor, including maintenance
of group health benefits during the leave and job restoration at the
conclusion of the leave.
29 C.F.R. § 825.107(c).
Both RK and Plaintiff rely on this regulation for their respective positions. According to
RK, a successor employer has the same liability as a predecessor employer; therefore if
SpartanNash is not liable, RK also cannot be liable. RK Suppl. Br. at 2, 3-4 (Dkt. 33). Plaintiff
counters that the regulation states only that an employee’s FMLA entitlements are the same
under a successor employer as a predecessor employer — meaning that Plaintiff’s right to job
restoration carried over from SpartanNash to RK — but that neither the regulation nor RK’s
cited cases address whether a successor employer benefits from a release barring claims against
the predecessor employer. Pl. Suppl. Br. at 2, 4 (Dkt. 34). To read that result into the regulation,
Plaintiff continues, would undermine the remedial purpose of the FMLA, which should be
liberally construed in the employee’s favor. Id. at 3.3

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There also appeared initially to be a dispute as to whether RK was a “successor” as defined by
the separation agreement such that it could take advantage of the release contained in the
separation agreement. See RK Br. at 11 (suggesting that Plaintiff waived her claims against RK
as “successor”); Pl. Resp. at 9-11 (implying that RK is a successor in interest as defined by the
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The answer here is supplied by the plain language of the regulation: Plaintiff’s
“entitlements are the same as if the employment by [Spartan Nash] and [RK] were continuous
employment by a single employer.” Because Plaintiff waived any FMLA rights attendant to her
then-existing leave — including her right to restoration — as to SpartanNash, she had no such
entitlement against RK. There is no indication that an employee has greater rights against a
successor in interest than she would have against the predecessor employer. And the regulation
does not authorize new (or renewed) FMLA rights to spring into being when a successor in
interest replaces a predecessor.
Thus, assuming RK is a successor in interest, it was required to treat Plaintiff in the same
manner as SpartanNash would have treated her. Crucially, Plaintiff was not entitled to any
continuing FMLA rights pursuant to her employment with SpartanNash because she settled all of
her claims — including her FMLA claim — when she signed the separation agreement. At that
point, SpartanNash was relieved of any FMLA obligation to restore Plaintiff to her former
position. If an employee’s entitlements are the same as if the employment was continuous under
a single employer, then RK is correct that it also owed Plaintiff no subsequent duty of
restoration. Therefore Plaintiff’s claim against RK must fail as well.
V. CONCLUSION
For the foregoing reasons, the Court grants both Defendant SpartanNash’s motion for
summary judgment (Dkt. 24) and Defendant RK’s motion for summary judgment (Dkt. 27).
SO ORDERED.
Dated: March 17, 2016
Detroit, Michigan

s/Mark A. Goldsmith
MARK A. GOLDSMITH
United States District Judge

FMLA, but not as defined in the corporate context for purposes of the separation agreement).
However, in supplemental briefing on this issue, RK conceded that it was not a successor for
purposes of the separation agreement. See RK Suppl. Br. at 4.
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CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served upon counsel of record and
any unrepresented parties via the Court's ECF System to their respective email or First Class
U.S. mail addresses disclosed on the Notice of Electronic Filing on March 17, 2016.
s/Karri Sandusky
Case Manager

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