Section 1542 Release Discharges Civil Action

The California Supreme Court has ruled in a landmark decision that a Workers’ Compensation Compromise and Release (C& R) will settle a civil claim when the language of the C&R intends to include civil claims.

The applicant filed a claim form for workers’ compensation benefits for sexual harassment. The applicant also filed a claim with the Department of Fair Employment and Housing (DEFH). The allegations were essentially the same as those in the workers’ compensation claim.

The applicant was given a right-to-sue letter by DFEH on October 10,1995.  The applicant settled her workers’ compensation claim on July 9,1996.  The settlement was on the mandatory form used for a compromise and release by the workers compensation appeals board (WCAB).

The preprinted compromise and release indicates that the applicant “releases and forever discharges (employer) from all claims and causes of action, whether now known or ascertained, or which may hereafter arise or develop as a result of the (claimed) injury.” In attachment to the compromise and release it indicated that the applicant agrees the compromise and release applied to all unknown and unanticipated injuries and damages, and all rights under Section 1542 of the Civil Code. The attachment then went on to quote Section 1542 of the Civil Code.

The WCAB approved the C&R. Li the case for the violation of FEHA the defendant filed for a motion for summary judgement citing the settlement in the workers’ compensation case. The trial court granted summary judgment. The Court of Appeal affirmed the judgement. The California Supreme Court evaluated the settlement language of the compromise and release. They determined that the language was enforceable as written. They drew their conclusion on two points. The first was that the addendum made clear their intent to settle all matters, even if that included matters outside the workers compensation arena. The second point was that the applicant did not offer any evidence that she did not intend to exclude her FEHA claim in the compromise and release.

The court indicated that you may have a boilerplate attachment releasing all claims without it specifically referring to the cause of action that is being released. The intent was to release all civil claims. Here the FEHA case had not actually been filed yet and the court only determined on this factual basis and not if a civil case had already actually been filed.

Case: Jefferson V. California Department Of Youth Authority

Harvey Brown
3501 Jamboree Rd. Suite 602
Newport Beach, CA 92660

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