HR Management & Compliance

Employee Lawsuits: Workers’ Comp Release Bars Harassment Claim; 3 Tips On Drafting Releases That Stand Up In Court

No longer limited to back injuries and broken bones, workers’ comp claims have taken on new meaning over the past decade as stress-related claims have become commonplace. While some employers throw their arms up in frustration, a new California Supreme Court ruling demonstrates how handling this kind of claim wisely can limit your exposure to other costly suits—including those for bias, harassment and constructive discharge.

Teaching Assistant Faces Obscenities In Classroom

Mary Jefferson worked part-time for the California Youth Authority (CYA) as Larry Berg’s teaching assistant. Jefferson claimed that Berg and his high school students regularly referred to women in derogatory terms. Jefferson complained to Berg and his supervisors but claimed the sexually offensive conduct continued. CYA eventually transferred Jefferson to another classroom, but her doctor recommended taking some time off for work-related stress.

Jefferson followed her doctor’s advice by leaving the school. She then filed a workers’ compensation claim, contending that she suffered work-related stress from a sexually hostile work environment. Jefferson also filed a harassment charge with the state Department of Fair Employment and Housing.


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Workers’ Comp Claim Settled

Jefferson settled her workers’ comp claim with CYA for $41,639, which was in addition to the significant workers’ compensation benefits she had already received. In settling the case, she signed a standard preprinted workers’ compensation compromise and release form.

The form stated she was releasing her employer from all claims, known and unknown, stemming from her injury. In an attachment to the release, Jefferson agreed this settlement applied to unknown claims resulting from her accident, including civil claims against co-workers.

Employer Claims Release Bars Harassment Lawsuit

Jefferson then sued CYA for sexual harassment. CYA asked the court to dismiss the case because of the signed release. Jefferson argued that she never intended to waive her right to file a harassment claim and that the workers’ comp waiver did not specify that this kind of claim was given up. The trial and appeals courts sided with CYA.

Court Upholds General Release

Now the California Supreme Court has upheld the release and tossed out Jefferson’s lawsuit. The court said that the general release Jefferson signed clearly waived all claims related to her underlying injury and didn’t specifically exclude harassment claims. What’s more, the court noted Jefferson knew about her potential civil harassment claim when she signed the agreement. Plus, the attachment that waived any civil claims against co-workers suggested the release was intended to encompass issues besides workers’ comp.

Drafting Tips

Although the court upheld the broad language in this release, it’s important to be very careful about the wording in releases. Here are some suggestions for avoiding problems in this area:

     

  1. Make sure releases cover all claims. State that the release covers all claims the worker may have against you—and specify any particular claims you believe may arise. Also indicate that it covers any unknown claims resulting from the same injury.

     

  2. Use care with preprinted forms. Pay particular attention to preprinted releases to be sure they aren’t too broad. Modify them if necessary by including attachments. Adding an attachment that referenced civil claims helped support CYA’s argument that Jefferson intended to settle both the civil and workers’ comp claims.

     

  3. Advise employees to review the release and consult an attorney. The court recognized that Jefferson admitted she read the release and sought legal advice. And the court pointed out that the language should be clear and simple so an employee can understand it.