Signing Release to Settle Workers Comp Claim did not Waive Right to File FMLA Claims
September 25, 2017
Pointing to the plain language and structure of a settlement agreement, which made clear it was to settle any "work injury claims" arising from an employee’s prior injury, the U.S. Court of Appeals for the Third Circuit concluded that the release did not bar the employee’s lawsuit, which alleged that the employer failed to notify him of his Family and Medical Leave Act (FMLA) rights, failed to designate his leave as FMLA-protected, and fired him for exercising his FMLA rights.
Release agreement. The employee worked for Boscov’s at a farmer’s market. He was injured on August 12, 2014, filed for workers’ compensation, and took medical leave, returning on August 26. He was fired on September 10. The following April, the parties settled his workers’ comp claim, signing a "Compromise and Release Agreement" before the Pennsylvania Department of Labor and Industry Workers’ Compensation Office. In paragraph 19, the first sentence of the agreement stated: "Employer and Employee intend for the herein Compromise and Release Agreement to be a full and final resolution of all aspects of the 8/12/2014 alleged work injury claim and its sequela whether known or unknown at this time."
The second sentence stated that the agreement was a "full and final resolution of all aspects of the 8/12/2014 alleged work injury claim" and the employee was "forever relinquishing any and all rights to seek any and all past, present and/or future benefits, including, but not limited to, wage loss benefits, specific loss benefits, disfiguement [sic] benefits, medical benefits or any other monies of any kind including, but not limited to, interest, costs, attorney’s fees and/or penalties for or in connection with the alleged 8/12/2015 [sic] work injury claim as well as any other work injury claim(s) Employee may have with or against Employer up through and including 4/7/2015."
Lawsuit. A few months later, the employee sued Boscov’s, alleging FMLA interference and retaliation, as well as a state-law claim of retaliation for filing a workers’ comp claim. The district court dismissed his complaint, relying on paragraph 19, and the employee appealed.
No waiver of FMLA, common law claims. Applying Pennsylvania contract law, the Third Circuit reversed. The terms of the contract were unambiguous, so no parol evidence was needed to ascertain the intent of the parties. Under the ordinary meaning and structure of the agreement here, the appeals court found that the employee’s FMLA and common-law claims could not "be fairly said to have been within the contemplation of the parties when the release was given."
The Third Circuit pointed to the first sentence of paragraph 19, which specifically referred to resolution of the "work injury claim" and its "sequela," which means "suit." This, said the court, only prohibited the employee from bringing an additional "work injury claim" suit. Here, the employee alleged that the employer failed to notify him of his FMLA rights, failed to designate his leave as FMLA protected, and fired him for exercising his FMLA rights and bringing a workers’ comp claim. He was not bringing an additional "work injury claim," such as a workers’ compensation tort, explained the court. Thus, his claims were not barred by the release.
The plain meaning of the second sentence of paragraph 19 further supported the appellate court’s conclusion, because the phrase "in connection with the alleged 8/12/2015 [sic] work injury claim as well as any other work injury claim(s)" limited the waiver of claims for "benefits" and "monies" to "work injury claims."
The structure of the release agreement also suggested that the parties did not intend it to cover FMLA or common-law claims. Indeed, the stated purpose was to resolve issues concerning the "nature and extent of the alleged work injuries, disability and need for medical treatment," and the employee certification confirmed that he understood the agreement was a "compromise and release of a workers’ compensation claim." In light of the foregoing, the case was remanded for further proceedings.
