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Workers’ Compensation Settlement Does Not Preclude a Subsequent FMLA Suit

As Published in the October Issue of the PELRAS Newsletter

Published on: Tue 10th Oct, 2017 By: John P. McLaughlin

A Compromise and Release Agreement (“C&R”) executed under the Pennsylvania Workers’ Compensation Law (“WCL”) settling a workers compensation claim does not preclude a subsequent suit under the Family Medical Leave Act (“FMLA”) or Pennsylvania common law.  The Third Circuit Court of Appeals, which has jurisdiction over all Pennsylvania municipalities, recently issued the decision in Zuber v. Boscov’s.  The decision clarifies an issue that has a direct impact in disputes involving medical issues that are common for many Pennsylvania public employers.

The dispute arose out of a work-related injury suffered for which the employee, Zuber, immediately filed a workers’ compensation claim.  He returned to work two days later, but after a few days, Zuber requested an additional week of leave, which Boscov’s granted. Zuber returned to work after the week of leave, but was fired two weeks later. 

On April 8, 2015, Boscov’s and Zuber signed a C&R ending the workers’ compensation claim, and on July 9, 2015, Zuber sued Boscov’s under the FMLA and Pennsylvania common law. The District Court dismissed the suit based on its reading of the C&R, and Zuber appealed.  The Third Circuit reversed, finding that the ordinary meaning of the C&R’s language did cover the FMLA or common law claims. The court based its ruling on two specific sentences and the overall structure of the C&R.

The first sentence highlighted by the court was that the “employer and employee intend for the herein Compromise and Release Agreement to be a full and final resolution of all aspects of the 8/12/14 alleged work injury claim and its sequela whether known or unknown at this time.”  The court found that the sentence referred only to the work injury claim and future work injury claims.  The court found that the sentence revealed that there was no intent to waive any claim or law suit regarding alleged FMLA violations.  

The second sentence that swayed the court outlined all of the possible future damage claims Zuber could have possibly brought arising out of the specific work injury claim or any other outstanding work injury claim against Boscov’s. Once again, the court found that the use of the language “work injury claim” limited the C&R to suits centered on the work injury claim itself, and not based on the FMLA. 

Though the impact of this ruling is potentially significant, it highlights the necessity for a thorough parsing of any language used in all settlement agreements, not just workers’ compensation C&R settlement agreements. If an employer, or any party, intends to waive any specific claim, it must carefully draft and review the applicable language and the facts of each case and each situation.  Additionally, the ruling shows the extent to which courts in general, and the Third Circuit specifically, may go to protect individuals where a waiver of future claims is concerned.