The California Court of Appeal, Fourth Appellate District, in Adrian Camacho v. Target Corporation, D073280 (June 8, 2018), determined that for a workers’ compensation settlement to effectively bar a civil action for violation of employment and civil rights, very particular language must be included in the Compromise and Release.
Mr. Camacho initiated workers’ compensation litigation against his employer, Target Corporation, seeking benefits for injuries “related to head and neck pain, as well as digestive and psychological problems.” After filing his claim before the workers’ compensation appeals board (“WCAB”), he resigned his employment alleging he was forced to do so by harassment, discrimination, retaliation, constructive termination, intentional infliction of emotional distress, negligent infliction of emotional distress, etc. These civil rights claims were specified in an August 2015 civil complaint he filed after receiving a “Right to Sue” letter from FEHA in April 2015.
Mr. Camacho settled his workers’ compensation claim in March 2015, utilizing the pre-printed form mandated for that purpose, a Compromise and Release (“C&R”). The form was augmented with an addendum attached to the C&R. In September 2016 Target filed its motion for summary judgment in the civil matter alleging that the language used in the C&R barred plaintiff from bringing the civil rights action, citing Jefferson v. California Dept. of Youth Authority (2002) 28 Cal. 4th 299. In argument Target pointed to language in the addendum that included “consideration for the settlement by this Compromise and Release of . . . any other claims for reimbursement, benefits, damages, or relief of whatever nature, . . . filed, threatened, or contemplated, through the date of the Order Approving Compromise and Release.” Camacho responded that this language was not sufficiently clear or certain to bar the action under the tests set forth in Claxton v. Waters, (2004) 34 Cal. 4th 367.
In the instant opinion the court of appeal noted that the workers’ compensation process embodies an informality and at the same time puts “certain safeguards in place to protect workers from unknowingly releasing their rights.” Among these safeguards are the requirements that only the issues clearly identified in the C&R are closed, and that the C&R be reviewed by a workers’ compensation administrative law judge (“WCJ”) for fairness and adequate protection of the injured worker. Nevertheless, the Supreme Court in Jefferson held that a C&R may foreclose action against the employer for violations of civil rights where the parties make clear their intent to settle matters outside the scope of workers’ compensation, and where extrinsic evidence establishing the parties’ intent to exclude a FEHA action is lacking. Two years later in Claxton the Supreme Court elaborated that while a C&R may close non-workers’ compensation issues, to effectively accomplish this the document must include language that refers “generally to causes of action outside the workers’ compensation law ‘in clear and non-technical language.’”
In finding that the C&R language signed by Mr. Camacho did not contain the necessary language to bar Mr. Camacho’s civil action, the appellate court here provided guidance for applying the two previous decisions addressing the issue. Jefferson and Claxton agree that parties to a workers’ compensation C&R may concurrently close workers’ compensation benefit rights and non-workers’ compensation claims. However, to effectively do so there must be language, approved by the WCJ as adequate and fair, and that explicitly reflects the intention of the parties to extend the settlement to issues legally outside the jurisdiction of the WCAB. In Mr. Camacho’s C&R there was insufficient clarity or evidence of this intention to enforce the C&R as a bar to the non-workers’ compensation matters alleged in the civil action.
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