Unstated Takeaways from the Third Circuit’s Recent Decision in the FMLA/Workers’ Compensation Arena
A recent decision rendered by the Third Circuit Court of Appeals serves as a timely reminder that employers must consider the legal implications of the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA) when litigating workers’ compensation claims. In Zuber v. Boscov’s, the Court determined that a release obtained in a workers’ compensation case did not act as a bar to later-asserted FMLA claims.
The case arose when former employee Craig Zuber sustained an injury on the job and filed a workers’ compensation claim against his employer, Boscov’s. Workers’ compensation benefits were awarded. Shortly thereafter, Zuber’s employment was terminated. Zuber and Boscov’s entered into a settlement agreement in connection with Zuber’s workers’ compensation proceedings. Three months later, Zuber sued Boscov’s, alleging FMLA interference and retaliation, and retaliation under Pennsylvania common law. The district court granted Boscov’s motion to dismiss on the grounds that the settlement agreement released all claims, including FMLA claims. The Third Circuit reversed.
Although the FMLA regulations were amended in 2008 to expressly permit settlement or releases of FMLA claims based on past conduct without approval by the U.S. Department of Labor (DOL) or a court, the Third Circuit held that the settlement agreement between Zuber and Boscov’s did not release Zuber’s FMLA claims. The Third Circuit’s decision is based on Pennsylvania contract principals and its interpretation under those principals of the contract’s language. In essence, the Court read the language to mean that the parties intended to only release the work injury claim and damages arising therefrom. The ruling comes as no surprise given the fairly narrow language in the release; specifically, the release language did not contain general language, such as a clause releasing “any and all claims against Boscov’s,” and it did not expressly mention the FMLA.
The ruling does, however, remind employers of this key, unstated takeaway:
Workers’ compensation claims are inherently tied up with ADA and FMLA issues. Employers and their HR and legal professionals must consider whether an employee’s rights and an employer’s obligations under the FMLA and/or ADA may be triggered, even though an employee is only seeking workers’ compensation benefits.
Zuber’s allegations are such an example. He claimed that Boscov’s failed to notify him of his FMLA rights after he reported his injury to Boscov’s, and that Boscov’s failed to designate his absences as FMLA-protected leave, then retaliated against him for exercising his FMLA rights.
Potential FMLA and ADA claims must be front of mind when litigating workers’ compensation claims, especially because workers’ compensation counsel are often different from counsel later retained to handle FMLA and ADA lawsuits. Admissions and evidence amassed for workers’ compensation purposes can create FMLA and ADA hurdles down the road if not approached strategically. If done right, workers’ compensation proceedings can significantly benefit employers in later FMLA and ADA litigation.