Is that your final answer?

You are probably a worker too

Clayton v. J.C. Penney Corp., 2017 VT 87

By Andrew Delaney

Here’s a blast from the past. Sometimes it takes us a while to get to cases. That doesn’t mean a case isn’t important; it just means we’ve got a backlog.

This is a workers’ compensation case. For a historical discussion of workers’ compensation from our very own Daniel Richardson, click here. There’s a lot of legal background in this case, but I’ll make it simple: in general, a workers’ compensation settlement agreement will be treated as a binding contract.

In this case, Ms. Clayton worked for J.C. Penney for many years as a stylist. In 2011, she had left-foot heel and arch pain following a work-related accident. This was accepted as compensable by employer, which puts employer on the hook for medical bills and other benefits. 

While that case was pending, Ms. Clayton got treatment from a podiatrist. She was diagnosed with right-foot plantar fasciitis in addition to his diagnoses pertaining to her left foot. The podiatrist related both the right- and left-foot conditions to Ms. Clayton’s work and standing on her feet all day.

In September 2014, the parties entered a “Modified Full and Final Form 16 Settlement Agreement with Addendum.” It specifically mentioned the left foot and any other related body part or sequelae from the initial injury.

Ms. Clayton received a lump sum payment “in full and final settlement of all claims for any and all benefits, injuries, diseases, illnesses, conditions, and/or symptoms and any and all sequelae allegedly sustained as a result of” her initial workplace injury. The agreement included a “general release” clause.

As part of the approval process—these sort of agreements must be approved by the Department of Labor—the department hearing officer sent Ms. Clayton a letter explaining that full and final pretty much means this is it—no more workers’ compensation payments for anything. Ms. Clayton signed and the department approved the agreement.

Six months later, Ms. Clayton had a new right-foot injury at work. Employer denied the claim as preexisting. Employer also argued that the claim should be dismissed because it was covered by the previous agreement and should have been known at the time of the settlement. Ms. Clayton appealed the denial.

A workers’ compensation specialist found the denial “reasonably supported” but set a formal hearing on the legal effect of the “general release” in the settlement agreement. Employer filed a motion for summary judgment and Ms. Clayton cross-moved for the same.

The Commissioner found that the settlement agreement “convey[ed] a clear and unambiguous message” and that the release was valid and enforceable. But the Commissioner voided the rest of the agreement on public policy grounds. The basic reasoning was that the release covered the left foot but not necessarily the right foot because a broader interpretation—covering the right foot when the original injury was to the left foot—would be against public policy and impermissibly broad.

Employer filed an interlocutory appeal, and the Commissioner certified the following question:

As a matter of law, does the parties' September 24, 2014 approved settlement agreement bar Claimant from asserting a claim for workers' compensation benefits on account of her alleged March 10, 2015 work-related right foot injury?

SCOV agrees with employer that the Commissioner lacked the authority to void the parties’ settlement agreement on public policy grounds.

SCOV reviews summary judgment rulings de novo, using the same standard as the trial court. If you don’t know that standard by now, you need to go to the top of the blog, type “summary judgment” in the search box and read any one of the hundreds of summaries that pop up. If you’re too lazy to do that, here’s the quick-and-dirty version: summary judgment is appropriate when there’s no dispute of material fact and the moving party is entitled to judgment as a matter of law. The nonmoving party gets the benefit of all reasonable doubts and inferences.

SCOV begins by noting that the Department of Labor has a narrower playing field—“[u]nlike courts, which are granted their power by the Constitution, administrative bodies have only the adjudicatory authority conferred on them by statute.” What this means is that the Commissioner has authority to approve settlement agreements and consider “whether a proposed agreement serves a claimant’s or her dependents’ best interests,” but the authority to approve or reject a settlement agreement exists only at the time it is initially presented. The Commissioner has no authority to later invalidate an approved agreement.

In general, settlement agreements are enforced according to their terms to ensure finality. Here, SCOV reasons that the “Commissioner deprived employer of the determinate and final resolution to which it was entitled.” But that doesn’t mean employer “wins” the whole case.

This one gets sent back for the Commissioner to hold a hearing and to determine whether Ms. Clayton’s left- and right-foot injuries are causally related to the new alleged work-related injury or the old one.