Overview and Case Analysis

On Monday, September 11, 2017, the U.S. Court of Appeals for the Third Circuit held, in a precedent-setting opinion, that a workers’ compensation compromise and release agreement (C&R) did not prevent a former Boscov’s employee from filing claims against its employer for violations of the Family and Medical Leave Act (FMLA) and Pennsylvania common law. The employee alleged that Boscov’s interfered with, and retaliated against him for exercising his FMLA rights and further retaliated against him for filing his workers’ compensation claim.

The Court reasoned that, unlike a general release that the parties would sign to resolve most other employment-related disputes, the C&R was a limited contract that only covered the employee’s “alleged work injury claim and its sequela.”  The Court cited both the everyday dictionary definition of sequela, which includes “an aftereffect of a disease, condition or injury,” and the Black’s Law Dictionary definition, which refers to sequela as a “suit.” Accordingly, under either definition, the Court concluded that the employee only gave up his right to bring a future workers’ compensation claim against Boscov’s.

Best Practices and Conclusion

The Court’s decision was limited to the specific C&R at issue, and the Court only discussed its effect on the employee’s FMLA and Pennsylvania common law claims. However, employers with operations in Pennsylvania have been placed on notice that in order to effectively waive and release other employment-related claims, they should have the employee sign an additional comprehensive release agreement.  Employers in New Jersey, Delaware, and the U.S. Virgin Islands may also be affected.

The Court’s decision could be extended to other employment laws and regulations, as well. Aside from claims arising under the FMLA or at common law, an employer would need to separately release an employee’s claims under the Americans with Disabilities Act (ADA), Age Discrimination in Employment Act (ADEA), Title VII of the Civil Rights Act of 1964 (Title VII), and a whole host of other statutes.

Any general release agreement separate from the C&R would most likely have to be supported by additional consideration, or something of value (like money). This gives employers a new hurdle to jump over when faced with on-the-job injury disputes, and savvy employees may attempt to use this as leverage.

As always, we at HR Legalist urge employers to reach out to preferred legal counsel and find out how this decision may affect your business practices.

A copy of the Third Circuit Court of Appeals opinion can be viewed here.