Here’s the situation: One of your employees files a worker’s compensation claim alleging injuries caused by on-the-job harassment. The w.c. claim is settled and the employee signs the preprinted standard Compromise and Release form which states that the employee is releasing and forever discharging the employer from all causes of action and claims, whether know or unknown, which may arise or develop as a result of the injury. Is the employee barred from filing a separate civil suit against the employer for sexual harassment?
The answer is “no” according to the California Supreme Court in the case of Claxton v. Waters, 34 Cal.4th 367 (2004). In Claxton, an office assistant filed a civil action against her former employer and supervisor claiming sexual harassment. Before filing the civil action, the employee filed a claim for workers compensation benefits based on injuries to her psyche due to sexual harassment.
The workers compensation claims were settled. As a part of the settlement, the employee executed a preprinted compromise and release form which referenced her claims for w.c. benefits but not the pending civil action for damages. The release stated that the employee is releasing the employer from any and all claims or causes of action which may arise or develop as a result of her injury.
The California Supreme Court held that the standard release used in workers compensation cases, although broadly worded, only applies to claims that are within the scope of the worker’s compensation system and does not apply to claims asserted in a separate civil action. The Court noted that the intended settlement of claims outside the workers compensation system should be reflected in a separate document. “The separate document need not identify precise claims; it would be sufficient to refer generally to causes of action outside the workers’ compensation law in clear and non-technical language”.
Without an appropriate settlement agreement being executed by the claimant employee, an employee can file an injury, discrimination or wrongful termination claim before the WCAB and after settling those workers compensation claims, the employee may also sue the employer in a civil action in Superior Court on the same or substantially similar claims and injuries. Sound like “double dipping” by an employee? It is.
To protect against this potential problem (and payment of the costs, legal fees, settlement or judgment of state court litigation) it is imperative that the employer or his legal representative negotiate and draft a settlement which includes any existing or potential civil claims arising out of the same injury.
For any questions or comments regarding this Labor Law Update please contact attorney Michael Daly of the Daly Law Firm at (619) 525-7000 or firstname.lastname@example.org.