Tuesday, July 2, 2002
Broad Workers’ Compensation Release Bars FEHA Suit, S.C. Rules
By ROBERT GREENE, Staff Writer
An employee who signs a broad release to settle a workers compensation claim may be barred from later filing a lawsuit to recover damages for the same actions that sparked the claim, the state Supreme Court ruled yesterday.
Courts generally apply workers’ compensation releases only to workers’ compensation claims, but the unanimous high court ruled that broadly written releases can have a wider effect if the evidence shows the employee knew what rights were being waived.
The decision ended an attempt by a former California Youth Authority teaching assistant, who alleged she was sexually harassed on the job, to recover under the state Fair Employment and Housing Act. Mary J. Jefferson already had received $41,639, plus disability indemnity and medical expenses, to settle her workers’ compensation claim.
The justices said Jefferson could have modified the preprinted form provided by the Workers Compensation Appeals Board to explicitly keep alive her FEHA claim, or could have brought in outside evidence showing that when she signed the form she didn’t know she had another cause of action at her disposal.
Instead, Justice Janice Rogers Brown noted, the form Jefferson signed included an attachment that expressly waived the protections of Civil Code Sec. 1542, which reserves to plaintiffs the right to later sue on claims that were unknown at the time of the release.
Brown said courts must be able to enforce general releases, or else employers would never be finished enumerating all the possible claims the employee might have.
“The employer would never be able to know for sure that it has thought of every claim, and therefore it would never be able to put a definitive end to the matter,” Brown said. “Employers would then be disinclined to enter into settlements, because certainty as to the full extent of liability is one factor that motivates employers to choose settlement over litigation.”
Jefferson began working for the Youth Authority when the school year began in 1992. She alleged that the teacher, as well as the students, used sexually offensive language and didn’t let up even after she complained to supervisors.
She alleged that she was reassigned to a new classroom after a year and a half, but by that time she was suffering from work-related stress and stopped working, on her doctor’s recommendation.
Jefferson filed a workers’ compensation claim and a sex discrimination claim with the state Department of Fair Employment and Housing. The DFEH issued a right-to-sue letter in October 1995.
Nine months later Jefferson settled her workers’ comp claim, using a mandatory form adopted by the WCAB. The form included a statement that she “releases and forever discharges [the Youth Authority] from all claims and causes of action, whether now known or ascertained, or which may hereafter arise or develop as a result of the …injury.” A typed attachment included language applying the release to “all known and unknown an unanticipated injuries and damages resulting from such accident,” and also quoted from Civil Code Sec. 1542, which prevents parties from inadvertently settling unknown claims.
The WCAB approved the settlement on Aug. 2, 1996. Jefferson filed a sex discrimination FEHA suit three weeks later.
The San Bernardino Superior Court granted the Youth Authority’s motion for summary judgment, and the Fourth District Court of Appeal affirmed.
Jefferson told the Supreme Court that it ought to disregard the attachment to the printed form because it did not expressly refer to the FEHA action and because it was “boilerplate.” She also cited cases in which appeals courts have held in favor of plaintiffs who signed broad releases but sought to keep alive pending lawsuits.
Brown said the court could not do that in Jefferson’s case, because she had not yet filed her FEHA action when she executed her release and offered no evidence that she intended to do so.
An employee like Jefferson has the burden of excepting any as-yet uninitiated litigation when executing a release, the justice said.
“Absent this exception, and absent contrary extrinsic evidence, a court will enforce general language, such as is found in the compromise and release and attachment in the present case, releasing all claims including civil claims,” Brown said.
Brown also rejected the attempt to distinguish “boilerplate” absent any explanation as to why a pre-made attachment should be less effective than one tailor-made for Jefferson’s case.
Two justices wrote separately to caution protection for some employees. Justice Joyce Kennard said the waiver language should be clearer so that parties not represented by counsel can easily understand it. Justice Carlos Moreno agreed, and added that workers’ comp claimants like Jefferson who already filed a FEHA claim necessarily had better knowledge of possible lawsuits than claimants, like those in other cases, who had not filed any such additional claims.
The case is Jefferson v. California Department of Youth Authority, S097104.
Copyright 2002, Metropolitan News Company