Settling the Workers’ Comp Claim, But Ignoring the ADA Charge

By Lehr Middlebrooks Vreeland & Thompson, P.C.

March 27, 2019

We often see a workers’ compensation claim paired with an Americans with Disabilities Act violation charge. Due to the EEOC’s low threshold or what is necessary to qualify as a disability, often a workers’ compensation injury may in fact qualify as a disability as defined under the ADA.

Employers should be sure that if there is a settlement of the workers’ compensation claim, the settlement is broad enough to preclude a potential Americans with Disabilities Act claim. An example of this occurred recently in the case of Peddy v. Aaron’s Inc. (E.D. La., February 21, 2019).

In Aaron’s, an employee settled her workers’ compensation claim prior to serving an ADA lawsuit on the employer. The workers’ compensation settlement language provided that the employer was released from “all liability of any nature whatsoever, whether past, present or future including claims arising under the laws of Louisiana, the laws of the United States” or any other federal or state law arising out of the employee’s workplace injury. The employer filed a counterclaim against the employee for breach of the settlement agreement, and the Court found for the employer, ordering the employee to pay the employer’s costs and attorney fees.

The Court ruled that when the employee signed the broadly-worded release, it encompassed any claim of ADA discrimination or any state claim for personal injury. Employers should be sure any workers’ compensation settlement is worded broadly enough under the state in which the employee’s injury arose to foreclose the employee’s opportunity to bring any other type of claim related to the injury, such as under the ADA or FMLA.