WORKER'S COMPENSATION SETTLEMENT USED TO BAR DISCRIMINATION CLAIMS
In a recent case, an employee who had worked for J.C. Penney was terminated and brought a workers' compensation claim as well as a claim for violations of the discrimination laws. Soltis v. J.C. Penney Corp., 128 FEP Cases 804 (C.A. 6, 2015). After the workers' compensation claim was settled, J.C. Penney moved for summary judgment arguing they were released by the terms of the workers' compensation settlement. As part of the workers' compensation settlement, the claimant signed a release which provided that the claimant releases J. C. Penney from any and all claims arising out of or in connection with her employment, or termination thereof, including but not limited to the various discrimination laws.
The Sixth Circuit Court of Appeals found that in the course of settlement of a workers' compensation claim, the parties may agree to also release ancillary claims, such as a discrimination claim. In determining the enforceability of such releases, basic principles of contract law apply.
Editor's Note: Readers should note that some states do not allow a workers' compensation settlement to go beyond settlement of the workers' compensation claims. Even in such states, however, normally two settlement agreements can be drafted, one settling the workers' compensation claim, and the other settling any and all other potential employment claims.