California Supreme Court To Decide Whether Settlement Of Workers' Compensation Claims Includes Discrimination Claims

Author:Ms Rebecca Ceniceros
Profession:Livingston & Mattesich

Co-written by Susan Denious

California employers frequently find themselves challenged in two separate forums by disgruntled employees who claim that discrimination or harassment on the job caused them emotional harm. Such employees often file workers' compensation claims, asserting that job-induced stress rendered them disabled. At the same time, they pursue discrimination or harassment claims against the employer in civil court. An interesting question is posed when employees settle their workers' compensation claims but want to pursue their discrimination and harassment claims, even though both are based on the same purported mistreatment.

Does the release of an employee's workers' compensation claim include discrimination claims? Or, to the contrary, can an employee pursue discrimination or harassment claims even though he or she has settled and is receiving payment for the resolution of his or her workers' compensation claim?

The Jefferson Decision Limits Employees' Options

Recently, a California court of appeal decided that settlement of a workers' compensation case meant that the employee in question also waived her right to pursue a sex discrimination claim against her employer. In Jefferson v. California Department of Youth Authority, an employee filed a workers' compensation claim asserting psychological injuries because of degrading words allegedly used to refer to females at the workplace. About seven months later, she also filed an administrative charge of sex discrimination with the California Department of Fair Employment and Housing. When she settled her workers' compensation claim, she signed a form used by California Workers' Compensation Appeals Board which stated that she "released and forever discharged her employer from all claims and causes of action . . . ." When she filed suit for sex discrimination, the employer asserted that the broad language contained in the workers' compensation release also encompassed her civil discrimination claim.

The Court of Appeal ruled in favor of the employer. It reasoned that employees releasing claims are personally aware of other claims that they do not intend to relinquish; as such, it decided, they have an affirmative duty to specify in any release they sign that they are not waiving certain claims. The employee in Jefferson, it held, should have made her...

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