Picture this. You have just settled a problem workers’ compensation case and you or your carrier have disbursed settlement checks totaling $100,000 in exchange for a full and complete compromise and release of “any and all past, present and/or future benefits, including but not limited to, wage loss benefits, disfigurement benefits, medical benefits, or any other monies of any kind including, but not limited to, interest, costs, attorney’s fee and or penalties for or in connection with the alleged 08/12/2015 work injury claims Employee may have with or against Employer…”
Several months later, the same employee sues your company in Federal Court for violating his FMLA rights, retaliation for exercising FMLA rights, and for wrongful discharge based upon unlawful retaliation for filing a workers’ compensation claim in violation of Pennsylvania common law.
“What on Earth,” you say. “But we just paid out a $100,000 settlement!” Unfortunately, the employee may pursue these additional claims because they were not properly released at the time of the workers’ compensation settlement. The United States Court of Appeals for the Third Circuit recently held that a Compromise and Release Agreement under the Pennsylvania Workers’ Compensation Act, covers only those matters which “may fairly be said to have been within the contemplation of the parties when the release was given.” Zuber v. Boscov’s, No. 16-3217 (United States Court of Appeals for the Third Circuit, opinion filed September 11, 2017). In Zuber, the agreement referenced only work injury claims and as such, the settlement document was only read to prevent the employee from seeking additional money related to an alleged work injury claim. Likewise, the employee certification page of the subject agreement specifically stated that the employee “understands that the Compromise and Release is a settlement of his workers’ compensation claim only” and thus, the document was “unambiguously” a specific and limited release rather than a general release.
The above problems could have been avoided, of course, by utilizing separate release documents, coupled with a properly worded letter of resignation, to make it clear that the employee was indeed consenting to and bargaining for a global resolution of all employment issues, including a full compromise and release of his workers’ compensation rights, and a settlement and release of other potential employment claims under other laws and statutes including the FMLA, ADA, ADEA and wrongful discharge.
Often times defense counsel assigned by an insurance carrier in workers’ compensation matters will proceed to settlement without proper consideration of other ancillary employment matters and exposures. Accordingly, employers must be vigilant in making sure that their interests are properly protected and that employees who accept workers’ compensation settlements do not return to court seeking other costly benefits or remedies. Fully insured employers should insist that the carrier appointed attorney consult with employment law counsel on the settlement. Employers who are self-insured or have large deductible plans, who have more leeway in selecting defense counsel should insist on hiring workers’ compensation defense counsel who are familiar with employment laws and statutes, to avoid the result in the Zuber case.
For further information, on this subject, please feel free to contact Denise Elliott, Micah Saul or Paul Clouser, in our Lancaster office.