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Resolution of a PA Workers Compensation Claim by Compromise and Release Agreement does not preclude other Labor Claims

By: Attorney Gary E. Adams & Attorney Barry A. Dratch
On September 11, 2017, the U.S. Court of Appeals for the Third Circuit held that a worker’s 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 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.

In the case,  Zuber v. Boscov's, Inc., No. 16-3217 (3d Cir. 2017), Craig Zuber was working as a manager at Fairgrounds Farmers Market in Reading, Pennsylvania.  On August 12, 2014 he suffered an eye injury requiring medical attention.  He returned to work two days after the injury, but suffered complications of his injury, and was given a doctor’s note to remain out of work from August 17, 2014 to August 24, 2017.  Mr. Zuber returned to work on August 26, 2014, but was terminated on September 10, 2014.  The employer claims a “security breach” as the basis for the firing.

Mr. Zuber filed a worker’s compensation claim as a result of this work injury.   Mr. Zuber and his employer resolved the worker’s compensation claim on April 8, 2015, by way of Compromise and Release Agreement for $10,000.00.  The language of the Compromise and Release Agreement included, “The settlement calls for a one time payment of $10,000.00…In exchange for employee forever relinquishing any and all rights to seek any and all past, present, and/or future benefits, including but not limited to wage loss, specific loss benefits, disfigurement benefits, and/or medical benefits for or in connection with the alleged 8/12/2014 work injury claim…”  The release further 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.”

Subsequent, to resolution of the worker’s compensation claim, Zuber brought suit under the Family and Medical Leave Act, 29 U.S.C. 2617, and common law, claiming that Boscov’s failed to notify him of his FMLA rights and to designate his leave as FMLA protected; retaliated against him for exercising his FMLA rights; and retaliated against him for filing a workers’ compensation claim.  
Defendant, Boscov’s filed a Motion to Dismiss the claim, arguing that Zuber waived his rights to pursue further litigation against the company when he signed the Compromise and Release Agreement.  Boscov’s motion was granted by the District Court and the case was dismissed. The district Court’s reasoning for granting the motion to dismiss was the Judge’s finding that  plaintiff waived his FMLA claims against defendant by the execution of the C&R in his Workers’ Compensation matter. The Judge found that the release in this case contains broad, all-encompassing language and  that the placement of (the)…“broad, all-encompassing” language,  makes the release agreement even stronger…”  and would therefore  allow for the termination of plaintiff’s claims.

On September 11, 2017, the U.S. Court of Appeals for the 3rd Circuit overturned the District Courts decision.  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 found that language of the agreement which states, that it is a final resolution  of the work injury claim and its sequela doesn’t necessarily disallow an FMLA claim.

The Court explained that “sequela” a singular noun, means “a suit”.  As a result, the sentence in the C & R Agreement only prohibits Zuber from bringing an additional work injury claim such as a worker’s compensation claim or tort.  The Judge rejected  Defendant’s argument that sequela means not just a single suit , but all claims arising out of the injury.  

The court stated:

“Because of the C&R’s ordinary meaning and structure, we hold that the  C & R is unambiguously a specific and and limited release rather than a general release.”

The Court found that when Zuber signed the C & R he merely released his right to bring future worker’s compensation claims against Boscov’s.  The Court found that the C & R Agreement did not prohibit an FMLA claim.

When an employee sustains a work injury, an employee is entitled to worker’s compensation benefits.  That employee may also have claims against his employer for violations of laws intended to protect his employment, when injured on the job, specifically the FMLA.  An employer may attempt to resolve all claims the employee may have against an employee by entering into a Compromise and Release Agreement with that employee.  However, the U.S. Court of Appeals of the 3rd Circuit is telling us that a Compromise and Release Agreement with general language is not sufficient to prevent an employee from bringing an FMLA claim against the employer, unless it is clear within the Compromise and Release Agreement that both sides are agreeing to the release of future FMLA claims.  “Broad, all-encompassing” language within the Compromise and Release Agreement is not sufficient to prevent the employee from bringing an FMLA claim.

If you have entered into a Compromise and Release Agreement which does not have specific language preventing future FMLA or other labor claims, the right to bring these labor claims will, most likely, still exist.  Should you have questions regarding these issues, be sure to seek a labor attorney familiar with worker’s compensation and labor law.  
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