U.S. Court of Appeals Decision Highlights Importance of Carefully Drafting Release Agreements
In Zuber v. Boscov’s, the Third Circuit narrowly interpreted a release agreement to permit the plaintiff to pursue a claim under the FMLA for interference and wrongful termination. The employer moved to dismiss on the basis that his claims were barred by a previously-entered Compromise and Release Agreement (“C&R”) settling his workers’ compensation claim. The C&R provided that it constituted a “full and final resolution of all aspects of the 8/12/2014 alleged work injury claim” and that the:
“employee is forever relinquishing any and all rights to seek any and all past, present and/or future benefits, including, but not limited to, wage loss benefits, specific loss benefits, disfigurement benefits, medical benefits or any other monies of any kind including, but not limited to, interest, costs, attorney’s fees and/or penalties for or in connection with the alleged 8/12/2014 work injury claim as well as any other work injury claim(s) Employee may have with or against Employer up through and including 4/7/2015.”
The District Court granted the employer’s motion to dismiss holding the language contained in the C&R was broad enough to encompass the FMLA claims. However, the Third Circuit reversed, finding that the “C&R is unambiguously a specific and limited release rather than a general release,” that was only intended to release future workers’ compensation claims.
The Third Circuit’s decision was limited to the specific agreement at issue, and the Court only discussed its effect on the employee’s FMLA and common law claims. Nevertheless, releases should be drafted carefully to be as comprehensive as legally possible.