Impact of Compromise and Release Agreements in Wake of 'Zuber'

On Sept. 11,  the U.S. Court of Appeals for the Third Circuit handed down a decision that clarified the impact that a settlement in a workers’ compensation case (referred to as a compromise and release agreement) has on an employee’s rights to bring other claims against an employer, particularly when those claims arise out of the same work event. In Zuber v. Boscov’s, 2017 U.S. App. LEXIS 17484 (3d Cir. Pa. 2017), claimant Craig Zuber suffered a work-related injury which ultimately resolved by way of a compromise and release agreement. Following the resolution of his workers’ compensation case he then sued his employer for FMLA violations and retaliatory termination. In his civil complaint Zuber alleged that following his work-related injury his Employer failed to inform him of his FMLA rights and terminated him in retaliation for both reporting his work injury and attempting to avail himself of FMLA benefits. Boscov’s moved to dismiss the FMLA and retaliatory termination complaint arguing that Zuber waived these complaints by entering into the compromise and release agreement. Specifically, Boscov’s argued that paragraph 19 of the compromise and release contained a general release of any claim. The district court agreed and dismissed Zuber’s complaint. The Third Circuit reversed.

In reversing, the Third Circuit noted that the controversy before them was a matter of contract law. In so finding they noted that the “general release” that Boscov’s attempted to rely upon clearly only applied to workers’ compensation cases. Significantly, all compromise and release agreements are required to be prepared on the same standardized form. Paragraph 19 of that standard form (which is the paragraph of the form that Boscov’s attempted to use to have Zuber’s complaint dismissed) allows the parties to include additional settlement terms that are not already included in another paragraph of the form. In Zuber’s case, the language of paragraph 19 specified that Zuber was giving up past, present and future benefits as they related to his workers’ compensation claim. Appropriately, the paragraph did not include language about Zuber giving up any rights outside of the Workers’ Compensation Act.