Be Careful Because Employer Agreements Can Release All Claims Including ERISA Disability Claims

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When you become unable to continue working for an employer due to disability which is long-lasting, you may approach the employer for a severance if it is determined you will never be able to return to that employment. If you are fortunate enough to obtain a severance, be careful, because the agreement you are required to sign with your employer may reduce or even eliminate your rights to later pursue your disability claim. This may be the case even if the insurer of the disability plan is not specifically identified in the severance agreement by name.

Additionally, if you have a dispute with your employer which culminates in termination after the disability claim begins, an agreement to resolve that dispute may impair your rights to pursue a disability claim. That is what occurred in Gonda v. Permanente Med. Group, Inc., 2015 U.S. Dist. LEXIS 18892 (N.D. Cal. Feb. 17, 2015).

Gonda signed a settlement agreement with his employer following his termination. That agreement did not include any language referring to the disability plan other than to state in general terms that all ERISA claims are released. The agreement stated in part: “Dr. Gonda and his agents, successors and assigns agree to release and forever discharge TPMG, KFH, Kaiser Foundation Health Plan, Inc., . . . of and from any and all claims, charges, demands, actions, obligations, liabilities, and causes of action of whatever kind or nature, whether known or unknown . . . concerning or related to his employment by TPMG and Kaiser Foundation Health Plan credentials or his staff privileges at KFH whether based on . . . the Employee Retirement Income Security Act.”

Later, when Gonda’s long term disability benefits were denied, he sued the plan and the insurer, LINA. LINA asserted that Gonda had waived his right to litigation against it or the Plan by signing the agreement. The Court agreed, noting his execution of the settlement agreement was both knowing and voluntary, relying on Upadhyay v. Aetna Life Ins. Co., 2014 U.S. Dist. LEXIS 5982 (N.D. Cal. Jan. 16, 2014). The court noted, “[u]nder the terms of the settlement agreement, plaintiff not only waived [his] right to benefits under the Plan, [he] also waived [his] right to bring an ERISA action in federal court.” The settlement agreement unambiguously released “TMPG and related parties”, which acted to release Lina from Gonda’s ERISA action even though it was not a party to the lawsuit or ever mentioned in the settlement agreement itself. The Court held that with the execution of the settlement agreement, Gonda released his ERISA claims. While Gonda emphasized that he was permitted to pursue internal appeals, which bolstered his assertion that the severance agreement did not forestall litigation, the Court explained that the “[w]illingness to continue internal administrative appeals does not equate to a waiver of Defendants’ contractual right to be released from Dr. Gonda’s claims against them.”

As disability attorneys, we understand how to analyze and interpret the tricky intricacies of settlement agreements. Contact us at Bonny G. Rafel, LLC, we understand the importance of settlement and how they can impact the benefits you deserve.

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