The opinion
Opinions of the United
1998 Decisions States Court of Appeals
for the Third Circuit
4-29-1998
Wicker v. Consolidated Rail
Precedential or Non-Precedential:
Docket 97-3034
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Filed April 29, 1998
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 97-3034, 97-3035, 97-3036
97-3037 and 97-3038
EDWARD L. WICKER, SR.,
Appellant at No. 97-3034
SAMUEL D. WEAVER,
Appellant at No. 97-3035
THOMAS E. KLEINER,
Appellant at No. 97-3036
JOHN W. McKEE,
Appellant at No. 97-3037
JOHN M. KALTENBRUNNER,
Appellant at No. 97-3038
v.
CONSOLIDATED RAIL CORPORATION
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civil Action Nos. 93-cv-00041J, 94-cv-00015J
94-cv-00036J, 94-cv-00132J and 95-cv-00105J)
Argued September 23, 1997
Before: BECKER, Chief Judge, SCIRICA and McKEE,
Circuit Judges
(Filed: April 29, 1998)
JAMES M. FLOOD, ESQUIRE
(ARGUED)
HOWARD S. STEVENS, ESQUIRE
Stevens & Johnson
740 Hamilton Mall
Allentown, Pennsylvania 18101
Attorneys for Appellants
STEPHEN M. HOUGHTON, ESQUIRE
(ARGUED)
PETER T. STINSON, ESQUIRE
Dickie, McCamey & Chilcote
Two PPG Place, Suite 400
Pittsburgh, Pennsylvania 15222-5402
Attorneys for Appellee
OPINION OF THE COURT
SCIRICA, Circuit Judge.
The issue on appeal is whether S 5 of the Federal
Employers' Liability Act1 voids a general release of claims
given as part of a negotiated settlement.
I.
A.
Plaintiffs Edward Wicker, Sr., Samuel Weaver, Thomas
Kleiner, John McKee and John Kaltenbrunner are all
former employees of defendant Consolidated Railroad
Corporation who were injured during the course of their
_________________________________________________________________
1. Section 5 of FELA provides:
Any contract, rule, regulation, or device whatsoever, the purpose
or
intent of which shall be to enable the common carrier to exempt
itself from any liability created by this chapter, shall to that
extent
be void . . . .
45 U.S.C. S 55 (1986).
2
employment. Each plaintiff negotiated a settlement of
claims with Conrail and executed a release. While the
releases were not identical, each appeared to settle all
claims for all injuries past and future. Plaintiffs
subsequently suffered injuries as a result of exposure to
toxic chemicals at Conrail's Hollidaysburg Reclamation
Plant in Blair County, Pennsylvania.
B.
Edward Wicker retired from Conrail in 1982. Before
retiring, Wicker suffered injuries as a result of exposure to
asbestos and, in January 1988, signed a release settling his
asbestos related claims. Wicker believed the release related
solely to his asbestos injuries, and testified he would not
have executed a release with a broader scope. Wicker
claims he was also exposed to trichlorethylene and
trichloroethane while employed at Conrail, and may have
been exposed to other toxic chemicals without his
knowledge. Wicker now suffers from blackouts, seizures,
vertigo, stiffness in his hands, and burn spots in front of
his eyes, all of which he attributes to his exposure to
chemicals while employed at Conrail. He does not believe
any of his injuries are related to asbestos exposure, the
subject of his initial settlement.
Samuel Weaver was employed by Conrail from 1974 until
1991. In February 1989, Weaver severely injured his back
on the job. In September 1991, Weaver signed a release and
a Letter of Agreement not to return to work. Weaver
believed the release related only to his back injury, and
said he would not have signed it otherwise. Weaver testified
that he was exposed to chemicals during the course of his
employment, and alleges that he suffers from swollen eyes,
infected tear ducts, nosebleeds, headaches, respiratory
difficulties, an enlarged liver, skin rashes, dizziness,
lipomas, cracking lips, indigestion, overgrowth of skin on
his thumbs, xerodermatitis, shortness of breath, fatigue,
black mucous substances in his mouth and nose, foot
numbness, muscle cramps, spastic colon and benign
lumps. Weaver claims that while some symptoms existed at
the time he executed the release, many are recent
3
developments which were not discovered until after he had
signed the release.
Thomas Kleiner was exposed to asbestos while employed
by Conrail. In August 1992, Kleiner signed a general
release. Kleiner's attorney, Robert Kosseff, testified that
neither he nor Kleiner were aware at the time the release
was executed that Kleiner had been injured by exposure to
chemicals other than asbestos. Kleiner said that he was
exposed to various chemicals when he worked on a "slop
truck," cleaning out vats filled with caustic soda, soaps,
cleaners, chlorinated solvents, and other chemical wastes.
As a result, Kleiner suffers from respiratory difficulties,
black mucous in his nose and mouth, skin rashes, fatigue,
headaches, chest pain, numbness, muscle cramps, nose
bleeds, coughing and sinusitis.
In April, 1990, John McKee injured his back while
working for Conrail and, as a result, was unable to work for
approximately two years. He returned to work briefly and
before retiring signed a release and letter of agreement on
September 11, 1992, similar to those signed by Weaver. At
the time he executed the release, McKee was represented by
Robert Kosseff, who testified that neither he nor his client
was aware that McKee had been injured by exposure to
toxic chemicals. McKee suffers from headaches, respiratory
difficulties, nausea, light headedness, skin rashes, chronic
indigestion, a bleeding stomach ulcer, kidney stones, blood
clots, nervous disorder, and dermatitis. Although McKee
testified that he had experienced many of these symptoms
before executing the release, he explained that hefirst
connected his symptoms to chemical exposure after he
signed the release.
John Kaltenbrunner injured his back in April 1990 while
employed by Conrail. In November 1994, Kaltenbrunner
signed a release, and a letter of agreement identical to
those signed by Weaver and McKee stating that he would
not return to his job. Kaltenbrunner testified he was
unaware of his exposure to toxic chemicals during his
employment, and that, as a result, he suffers injuries apart
from his back injury, including rashes, joint pain,
respiratory problems, sinusitis, skin "eruptions," and
Legionnaires Disease. Kaltenbrunner also testified that
4
some of these symptoms manifested themselves before
executing the release.
C.
The releases signed by Wicker and Kleiner were similar in
form and substance, and appear to release Conrail from
liability for all claims, both past and future, relating to their
employment. Wicker's release provides, in part:
I, Edward Wicker . . . for the sole consideration of
Twenty-one Thousand Dollars ($21,000) . . . hereby
release and hereby discharge Consolidated Rail
Corporation . . . from any and all losses, claims,
liabilities, actions, causes of action . . . and demands
of any kind whatsoever in nature . . . which I have or
to which I claim to be entitled by reason of any
injuries, known or unknown, foreseen or unforeseen
. . . which now exist or which may arise in the future
as a result of or in any way connected with my alleged
exposure to any material, substance, product, and/or
good(s) of any kind or nature (including but not limited
to dust, fumes, vapors, mists, gases, agents, asbestos
or toxic substances of any kind) supplied or permitted
to exist by [Conrail], and/or arising out of any working
condition, of any kind, during my employment by
[Conrail] . . . .
I hereby declare and represent that the injuries and
illnesses which have been or may be sustained,
including mental conditions resulting from asbestos
exposure or exposure to any substance, condition or
environment or a belief that I was exposed to asbestos,
or any substance, condition or environment, are, or
may be permanent, and that recovery therefrom is
uncertain and indefinite, and that they may cause or
lead to other deleterious conditions, including but not
limited to cancer, and that in making this Release, it is
understood and agreed that I rely wholly upon my own
judgment, belief, and knowledge of the nature, extent,
effect, duration, and other possible results of said
injuries, illnesses, conditions, exposures, and liability
therefore, and that the release is made without reliance
5
upon any statement or representation by [Conrail] . . .
and that possible future conditions, as yet undetected,
including but not limited to cancers of any kind, are
included.
McKee and Weaver each signed a standard release form
entitled "General Release." These releases provide in part:
I, [Plaintiff] hereby release and forever discharge
[Conrail] from all claims, demands, actions and causes
of action of every kind whatsoever and including but
without limitation of the foregoing, all liability for
damages, costs, expenses and compensation of any
kind, nature or description now existing or which may
hereafter arise from or out of injuries and damages,
known or unknown, permanent or otherwise, sustained
or received by [plaintiff arising from the specific
incident being settled].
The release signed by Kaltenbrunner, while similar to
those signed by Weaver and McKee, also contains a
separate exclusion preserving his claims for carpal tunnel
syndrome. That release provides in part:
I, John M. Kaltenbrunner, for the sole consideration of
Fifty Thousand Dollars ($50,000.00) . . . do hereby
release and forever discharge [Conrail] from all claims,
demands, actions and causes of action of every kind
whatsoever and including, but without limitation of the
foregoing, all liability for damages, costs, expenses and
all incidents, illnesses, diseases, conditions, injuries
and damages, known or unknown, permanent or
otherwise . . . .
THIS RELEASE SPECIFICALLY EXCLUDES ANY
CLAIMS OR CAUSES OF ACTION THAT JOHN
KALTENBRUNNER HAS OR MAY HAVE IN THE
NATURE OF OCCUPATIONALLY RELATED CARPAL
TUNNEL SYNDROME OR OCCUPATIONALLY RELATED
REPETITIVE MOTION INJURIES INVOLVING THE
UPPER EXTREMITIES ONLY BUT DOES NOT WAIVE
ANY SUBSTANTIVE OR PROCEDURAL DEFENSES
THERETO.
6
D.
Each plaintiff brought suit under FELA, alleging various
injuries because of exposure to hazardous and toxic
substances during the course of their employment with
Conrail. Conrail sought summary judgment, citing the
previously executed releases. Contending the releases
barred only their claims for back injury and asbestos
exposure, plaintiffs raised contract defenses of mutual
mistake, fraud, ambiguity and lack of consideration. They
also argued the releases were unenforceable underS 5 of
FELA, 45 U.S.C.A. S 55 (1986). The district court
consolidated the cases and granted Conrail's motions. This
appeal followed.
E.
The able district judge observed that the executed
releases "contain language which, on its face, relieves the
defendant from future liability for any type of damage or
harm suffered by the plaintiffs while in the railroad's
employ." Edward L. Wicker, Sr., et al. v. Consolidated Rail
Corporation, Civ. Nos. 93-41J, 94-15J, 94-36J, 94-132J,
95-105J (W.D. Pa. December 31, 1996) ("Wicker") at 6.
Finding the language of the releases unambiguous and no
evidence of mutual mistake, the court rejected plaintiffs'
contract defenses. Because plaintiffs were represented by
counsel and the releases were negotiated at arm's length,
the court also rejected plaintiffs' argument that these were
contracts of adhesion.
Addressing plaintiffs' FELA defense, the court
acknowledged the split of authority on the enforceability of
broadly written releases. It then turned to its recent
decision in Wicker v. Conrail, Civ. No. 94-16J (December
19, 1996) ("Wicker II"), which "accorded great weight to the
plaintiff 's continuing employment with Conrail after
settlement of his [original claim]." Wicker at 18. By
contrast, each plaintiff here negotiated his release in the
context of terminating, or already having terminated, his
employment with Conrail. According to the court, these
releases "served the beneficial purpose of adjusting, and
providing finality to, all claims between the parties." Id.
7
The district court also looked to Wilson v. CSX Transp.
Inc., Civ. No. 91-1398, slip op., (W.D. Pa. March 9, 1994),
in which plaintiff sued his employer for shoulder injuries
sustained in a work-related accident. Through settlement,
plaintiff released his employer from "all claims, suits, [etc.]
. . . which the [plaintiff] has or might have against [the
railroad] . . . for any and all injuries . . . occurring prior to
the date of [the release], including but not limited to
injuries arising out of or in any way connected with[the
shoulder injury]." Wilson, slip op. at 4. The term "injury"
was defined in the release to include both known and
unknown injuries. Several years later, plaintiff sued for an
occupational hearing loss, arguing the claim was not barred
because the release related only to claims arising from the
injury to his shoulder, and the hearing loss did not accrue
until after the settlement was signed. Granting the
railroad's motion for summary judgment, the court noted
the release specifically encompassed all injuries occurring
prior to the date of settlement, regardless of whether
plaintiff was aware of them. The Wilson court also noted the
general release at issue "indicates that the parties were
settling all known and unknown claims of injury . . . [and]
that the parties were severing their relationship for all time
and defendant was `buying its peace' with plaintiff as to any
such injuries." Wilson at 7.
In addition, the district court here reasoned that the
economic motivation behind negotiating a broadly worded
release is consistent with the congressional purposes of
FELA. The court found that persons who sign general
releases tend to receive larger settlements, and that
defendants are willing to pay higher sums to settle claims
under a general release.2 This, together with plaintiffs'
representation by counsel led the court to believe that
enforcement of the releases was "in the interest of both
parties, when viewed from the time of the negotiating of the
agreement." Wicker at 20.
_________________________________________________________________
2. "Broadly worded releases negotiated with departing or retired
employees, as a matter of economic analysis, do not permit a FELA
employer to exempt itself from future liability . . . [because] the liable
employer under such a release pays the full discounted value of the
known and unknown injuries of the settling parties." Wicker at 20.
8
F.
On appeal, plaintiffs have abandoned their arguments of
mutual mistake, fraud, ambiguity, and lack of
consideration. Their appeal relies entirely on the assertion
that their executed general releases are void under S 5 of
FELA, 45 U.S.C.A. S 55 (1986). Plaintiffs contend they were
unaware of either the injuries or the cause of those injuries
at the time the releases were executed, and offer supporting
affidavits from the attorneys who represented them at the
time. The releases are invalid, they claim, because "[u]nder
FELA a release is only valid if it compromises a claimed
liability." Pls.' Brief at 11. Consequently, S 5 of FELA
"prevents workers from releasing claims which they do not
know existed at the time they executed a release for a
separate known claim." Id. Plaintiffs maintain a general
release of unknown and future claims does not bar later
claims for injuries unknown at the time the release was
executed. Id. at 13 (citing Forry, Inc. v. Neundorfer, Inc., 837
F.2d 259 (6th Cir. 1988)); see also Lanham v CSX Transp.
Inc., 1995 WL 368171 (E.D. Pa. June 21, 1995)(finding that
a general release executed in settlement of an employee's
claim for a back injury did not bar a subsequent claim for
an occupational disease of which the employee was
unaware when he executed the release).
Conrail relies on the district court's analysis, especially
the distinction between current and former employees.
Because the releases were executed as part of a settlement
of existing claims and the termination of employment,
Conrail contends they were meant to put to rest all present
and future claims. Conrail also contends plaintiffs' asserted
symptoms or injuries existed before they executed the
releases. Thus, even if the releases cover only those injuries
manifest at the time of settlement, the "new" injuries were
nonetheless released because plaintiffs were on notice of a
potential health problem at that time.
G.
The district court had jurisdiction under 28 U.S.C.
S 1331 and 45 U.S.C. S 51, as well as supplemental
jurisdiction under 28 U.S.C. S 1367. We have jurisdiction
under 28 U.S.C. S 1291.
9
We exercise plenary review of a grant of summary
judgment. Dyszel v. Marks, 6 F.3d 116, 123 (3d Cir. 1993).
We apply the same test as the district court. Berner Int'l
Corp. v. Mars Sales Co., 987 F.2d 975, 978 (3d Cir. 1993).
In so doing, we must view all evidence and draw all
inferences therefrom in the light most favorable to the non-
moving party. Id. In this case, the party attacking the
validity of the release bears the burden of proof as to its
invalidity. Callen v. Pennsylvania R. Co., 332 U.S. 625, 630
(1948).
II.
A.
In this appeal we must interpret the scope of S 5 of FELA,
and in particular, whether its bar of "[a]ny contract . . . the
purpose of which shall be to enable [an employer] to exempt
itself" from FELA includes a general release of claims
executed by an employee as part of a settlement. A brief
review of the history of FELA and the accompanying case
law is warranted.
In 1908, FELA "was enacted because the Congress was
dissatisfied with the common-law duty of the master to his
servant." Rogers v. Missouri Pacific R. Co., 352 U.S. 500,
507 (1957). Congress sought to "ensure that the employees'
suits would not be defeated by the same devices which
Congress perceived to have been used in the immediate
past by the railroads to avoid liability." Damron v. Norfolk &
W. Ry. Co., 925 F. Supp. 520, 523 (N.D. Ohio 1995). Thus,
FELA was designed "to enable injured railroad workers to
overcome a number of traditional defenses to tort liability
that had previously operated to bar their actions." Lewy v.
Southern Pac. Transp. Co., 799 F.2d 1281, 1287 (9th Cir.
1986). For example, the Act abolished the doctrine of
assumption of risk, applied comparative rather than
contributory negligence, and sought to prevent employers
from contracting out of FELA liability. See S. Rep. 460,
60th Cong., 1st Sess. 2-3 (1908). With respect to the last of
these, Congress noted that many railroads "insist[ed] on a
contract with their employees, discharging the company
10
from liability for personal injuries." H.R. Rep. 1386, 60th
Cong. 1st Sess. 6 (1908). Section 5 was passed specifically
to remedy this problem.
B.
Shortly after FELA's adoption, the Supreme Court began
to establish the boundaries of S 5. The Court upheld the
validity of S 5 in Mondou v. New York, N.H. & H.R. Co., 223
U.S. 1, 52 (1912), noting that "if Congress possesses the
power to impose liability . . . it also possesses the power to
insure its efficacy by prohibiting any contract, rule,
regulation or device in evasion of it." The same year, the
Court examined S 5 in the context of a relief fund
agreement by which acceptance of benefits constituted a
release of all claims against the employer. Philadelphia, B.
& W.R. Co. v. Schubert, 224 U.S. 603 (1912). Reasoning
that this stipulation was simply a way for the employer to
avoid liability by contract, and that it fell within the scope
of S 5, the court held the release violated FELA. Id. at 612.
Although Schubert addressed only agreements signed
before injury, the Court later extended the bar to releases
signed after injury. Duncan v. Thompson, 315 U.S. 1, 5-6
(1942). In Duncan, the injured employee accepted $600 to
cover his living expenses, agreeing to return the money in
the event he brought suit against the employer. When the
employee filed a claim without first refunding the $600, the
railroad raised the contract as a defense. Focusing on
whether "the purpose or intent" of the agreement was to
enable the employer "to exempt itself from any liability"
under FELA, the Court noted that, because of Duncan's
financial condition, requiring the refund before commencing
suit was tantamount to depriving him of the right tofile
suit, thereby exempting the employer from liability. Id. at 7.
It also noted the $600 was specifically earmarked for living
expenses, and the agreement was a form commonly used to
benefit employees until final settlement was negotiated. Id.
at 7-8. Consequently, it declined to discuss the validity of
a release signed as part of a bona fide settlement, finding
that the "very language of the agreement indicates it is not
a compromise and settlement." Id.
11
The Court addressed that issue in Callen v. Pennsylvania
R. Co., 332 U.S. 625 (1948), where a railroad employee
brought a FELA action after injuring his back in a work-
related accident. As a defense, the railroad pleaded a
general release executed by the employee, signed in
exchange for $250, that relieved the railroad of "all claims
and demands which [plaintiff] can or may have against the
said Pennsylvania Railroad Co. for or by reason of personal
injuries sustained." Callen, 332 U.S. at 626. Plaintiff
claimed that when he signed the release he was unaware
he had a permanent injury. Although the primary issue on
appeal was whether the trial judge had improperly
withdrawn the question of the release's validity from the jury,3
the Court also addressed whether the release violated S 5 of
FELA. Rejecting this argument, the Court said:
It is obvious that a release is not a device to exempt
from liability but is a means of compromising a claimed
liability and to that extent recognizing its possibility.
Where controversies exist as to whether there is
liability, and if so for how much, Congress has not said
that parties may not settle their claims without
litigation.
Id. at 631. The language is clear. Releases are not per se
invalid under FELA. Although the Court did not explain
what will qualify as a "compromis[e] [of] a claimed liability"
it did say that parties may settle "[w]here controversies
exist as to whether there is liability, and if so for how
much." The explicit requirement is that a controversy must
exist.
The Court provided some clarification in Boyd v. Grand
_________________________________________________________________
3. The Supreme Court held that the validity of the release was a jury
question and that the trial judge's misleading instructions had
effectively
withdrawn the issue from the jury's consideration. The Court also
rejected the argument that the burden of proof with respect to validity
should be shifted to the railroad, noting that, regardless of the
potential
inequality of bargaining power between the parties, such a change was
appropriately left to the discretion of Congress. Thus, until Congress
"adopt[s] a policy depriving settlements of litigation of their prima
facie
validity . . . the releases of railroad employees stand on the same basis
as the releases of others." Id. at 630.
12
Trunk W.R. Co., 338 U.S. 263, 266 (1949), noting that its
Callen decision "distinguished a full compromise enabling
the parties to settle their dispute without litigation, which
we held did not contravene the Act, from a device which
obstructs the right of the Liability Act plaintiff to secure the
maximum recovery if he should elect judicial trial of his
cause." In Boyd, the railroad advancedfifty dollars to its
employee twice during the month following his work-related
injury. On each occasion, the employee signed an
agreement which provided that, if he elected to sue, "such
suit shall be commenced within the county or district
where I resided at the time my injuries were sustained, or
in the county or district where my injuries were sustained
and not elsewhere." Id. at 264. The employee brought his
claim in a different venue and the employer sued to enjoin
the action. Examining the venue provision contained in S 6
of FELA,4 the Supreme Court held"the right to select the
forum granted in s. 6 is a substantial right." Id. at 266.
Consequently, "contracts limiting the choice of venue"
obstruct a FELA plaintiff's fundamental right of recovery,
and are therefore "void as conflicting with[S 5 of] the
[Federal Employers'] Liability Act."5 Id. at 265.
Despite this ruling, the proper application and reach of
S 5 remains unclear. One reason may be that the Court's
decisions rejecting general releases as bars to subsequent
claims have been fact-driven, and consequently do not
provide a generally applicable rule of law. Although the
Supreme Court in Callen refused to void the releases
_________________________________________________________________
4. Section 6 of FELA provides, in part:
Under this chapter an action may be brought in a district court of
the United States, in the district of the residence of the
defendant,
or in which the cause of action arose, or in which the defendant
shall be doing business at the time of commencing such action.
45 U.S.C. S 56 (1986).
5. In addition to voiding general releases of FELA claims under S 5, the
Court has also held such releases void on the grounds of fraud, Dice v.
Akron, Canton & Youngstown R. Co., 342 U.S. 359, 362 (1952), and lack
of consideration, Maynard v. Durham & S. Ry. Co., 365 U.S. 160 (1961).
Neither holding, however, provides any guidance as to the proper
application of S 5.
13
executed in compromise of an employee's claims, the Court
has not had occasion to explain how wide a net its ruling
casts. Nonetheless, the case law provides us with some
rough guidelines.
C.
To begin with, Schubert underscores that S 5 of FELA was
designed to prevent employers from making the waiver of
claims a quid pro quo of the employment contract. Unlike
this case, Schubert dealt with a release that was signed
before the employee was injured, clearly the type of
contractual "shield" FELA was designed to prevent.
Nonetheless, Schubert makes clear that Congress intended
to prevent employers from depriving their employees of the
right to recover for job-related injuries.
Duncan and Callen are also instructive. In Duncan the
Court began shaping the requirements of S 5, concluding
that the release was not part of a compromise and
settlement. Callen was more specific and explicitly
permitted releases "where controversies exist." Of course
the release in Callen addressed only a specific injury.
Boyd holds that a FELA plaintiff may not waive his
fundamental rights under the statute.6 But Boyd relied on
the specific venue provision in S 6 of FELA to support its
conclusion that S 5 prohibited a waiver of venue. As noted,
there is no specific section of the statute which addresses
the rights of FELA plaintiffs to settle their claims.
_________________________________________________________________
6. The Court has held, in the context of the Fair Labor Standards Act,
that an employee cannot waive certain statutorily conferred rights. See
Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 704 (1945) (noting that a
"statutory right conferred on a private party, but affecting the public
interest, may not be waived or released if such waiver or release
contravenes the statutory policy" and thus the plaintiffs could not waive
minimum or overtime wages or liquidated damages); D.A. Schulte, Inc. v.
Gangi, 328 U.S. 108 (1946) (holding that an employee could not waive
his right to liquidated damage, even if the release is made in settlement
of a bona fide dispute as to coverage). While it is arguable that this is
analogous to an employee waiving his fundamental right to file a FELA
claim, making a general release invalid, the Court's decision in Callen
would appear to undercut this reasoning.
14
In South Buffalo Ry. Co. v. Ahern, 344 U.S. 367 (1953),
the Court upheld a provision of the New York Workers'
Compensation Law that effectively allowed an employee to
waive its FELA rights. Plaintiff had been awarded $28 per
week under the New York Workers' Compensation Law for
injuries sustained while employed as a switchman. Two
years later, after the employee died -- and his remedy
under FELA had lapsed -- the employer attacked the award
on the ground that the Workers' Compensation Board did
not have jurisdiction. According to the employer, S 113 of
the statute, which granted the Board jurisdiction to hear
claims for injuries "subject to the admiralty or other federal
laws," was unconstitutional as applied because permitting
the Board to hear claims covered by FELA constituted a
waiver of an employee's FELA rights. The Supreme Court
disagreed. Noting that S 113 was permissive, and did not
coerce an employee to give up its federal rights, the Court
held that S 113 of the New York Workers' Compensation
Law did not constitute an impermissible waiver under S 5 of
FELA.7
The New York statute at issue in Ahern -- allowing waiver
of an employee's FELA claims when he or she receives
compensation under the Workers' Compensation Law-- is
arguably no different than a private agreement to waive
such claims as part of a settlement between the employee
and the employer. But the facts of the case counsel against
extracting such a clearly defined rule of law. Unlike
plaintiffs here, who have filed claims unrelated to their
previous injuries, the employee in Ahern received benefits
for injuries received in a specific accident only.
_________________________________________________________________
7. The Court reviewed another attack on a FELA release in its per curiam
decision in Hogue v. Southern R. Co, 390 U.S. 516 (1968). The issue in
that case was whether a plaintiff who attacks the validity of a previously
executed release must return the consideration paid for that release
prior to commencing his FELA action. While the Court did not find it
necessary to "decide whether the release here involved violated s. 5," it
noted that "a rule which required a refund as a prerequisite to
institution of suit would be `wholly incongruous with the general policy
of the Act to give railroad employees a right to recover just compensation
for injuries negligently inflicted by their employers.' " Id. at 518
(quoting
Dice v. Akron, Canton & Youngstown R. Co., 342 U.S. 359, 362 (1952)).
15
Consequently, Ahern is closer to Callen, and while it
supports the notion that releases are not per se invalid
under FELA, it does not shed much light on the validity of
the general releases at issue here. To the extent there is a
key to understanding this question, it may be found in
Callen where the court said parties may settle "[w]here
controversies exist as to whether there is liability, and if so
for how much."
D.
Not surprisingly, lower courts that have addressed this
issue have disagreed on the proper interpretation of S 5.
Some courts, including the district court here, have held
that general releases do not contravene the purposes of
FELA and may bar a subsequent claim. See, e.g., Wilson v.
CSX Transp., Inc., Civil Action No. 91-1398, slip op. (W.D.
Pa. 1994); Williams v. Norfolk Southern Corp., CA 1:92-CV-
545-HTW (N.D. Ga. Jan. 22, 1993); Satterfield v. CSX
Transp., Inc., No. 93-002-R (W.D. Va. Dec. 22, 1993).
Others have refused to allow a defendant to use a
previously executed general release to block a subsequent
FELA claim. See, e.g., Babbitt v. Norfolk & Western Ry. Co.,
104 F.3d 89 (6th Cir. 1997); Lanham, 1995 WL 368171
(E.D. Pa. June 21, 1995); Manis v. CSX Transp., Inc., 806
F. Supp. 177 (N.D. Ohio 1992).
As we have noted, the district court here gave great
weight to the termination of plaintiff's employment.
Because the parties severed and terminated their
relationship thus "buying [their] peace," the court reasoned
the general release of claims signed by plaintiffs barred any
subsequent claims for unrelated injuries.
The contrary view has been set forth by the United States
Court of Appeals for the Sixth Circuit in Babbitt, and
appears to establish a broad, legal rule prohibiting the use
of general releases in cases such as this. The plaintiffs in
Babbitt were former railroad employees who signed
Resignation and Release Agreements as part Norfolk's
Voluntary Separation Program. Subsequently, plaintiffs
brought FELA claims for occupational hearing loss, and the
district court granted defendant's motion for summary
16
judgment, finding the releases barred plaintiffs' claims. The
Sixth Circuit reversed, holding that "[t]o be valid, a release
must reflect a bargained-for settlement of a known claim for
a specific injury, as contrasted with an attempt to
extinguish potential future claims the employee might have
arising from the injuries known or unknown by him." 104
F.3d at 93.
Conrail contends that Babbitt is distinguishable on its
facts because the releases in Babbitt were part of a
"Voluntary Separation Program" which offered early
retirement to railroad employees. Rather than the result of
compromise of claims, the releases were a take-it-or-leave-it
option offered to all employees. By contrast, the releases at
issue here were all negotiated as part of the settlement of
an existing claim - each was the result of arms-length
bargaining between the plaintiff, his counsel, and the
defendant railroad. No case cited by plaintiffs prohibiting
general releases corresponds to the facts here. In both
Lanham, 1995 WL 368171 (E.D. Pa. June 21, 1995), and
Manis, 806 F. Supp. 177 (N.D. Ohio 1992), cited by
plaintiffs to support a broad reading of S 5, the courts
focused on the nature of the releases signed, which were
expressly limited to prior injuries and thus were not
"general" releases of all claims.
III.
To be valid under FELA, a release must at least have
been executed as part of a negotiation settling a dispute
between the employee and the employer. Schubert and
Duncan hold that a release of FELA claims given as a
condition of employment, or signed without negotiation, is
void under S 5. As noted, the holding in Babbitt was based
in part on the fact that the releases formed part of a
voluntary separation program, and were not the product of
negotiations settling a claim. See also Damron v. Norfolk &
Western Railway Co., 925 F. Supp. 520, 525 (N.D. Ohio
1995).
It is also clear that an employer may not demand a
release against potential claims as a condition of
employment. The language of S 5 focuses on whether the
17
employer is attempting to evade liability. Schubert
invalidates those releases whose only purpose is to deprive
employees of their FELA rights. Schubert, 224 U.S. 603
(1912); see also S. Rep. 460, 60th Cong., 1st Sess. 2-3
(1908); H.R. Rep. 1386, 60th Cong. 1st Sess. 6 (1908). But
as noted, Callen permits an employer and an employee to
negotiate a release of existing claims.
As the district court here noted, and review of the case
law confirms, "FELA cases are inherently fact-bound."
Wicker at 18. The evaluation of the parties' intent at the
time the agreement was made is an essential element of
this inquiry. See, e.g., Lanham, 1995 WL 368171 at *1;
Forry, 837 F.2d at 263; Manis, 806 F. Supp. at 179. In
Lanham, for example, the court's decision turned on its
belief that the release was intended to apply to the
employee's earlier injury only, and could not bar a claim for
subsequent injury. Lanham at *1.8 The Forry court also
noted that the "meaning to be given to the words of a
contract must be the one that carries the intent of the
parties as determined by the circumstances under which
the contract was made." 837 F.2d at 263.
Examination of the parties' intent raises the troublesome
question whether a general release in FELA cases is merely
an engine by which an employer can evade FELA liability,
or represents a rational and considered way to resolve
claims and liabilities. On the one hand, FELA's underlying
goal of allowing liberal recovery might counsel a finding
that a general release of claims permits the employer to
avoid FELA liability altogether and therefore violates S 5.
But the Supreme Court appears to have rejected this view
in Callen, permitting releases which "compromis[e] a
claimed liability and to that extent recogniz[e] its
possibility." 332 U.S. at 631. The question remains whether
_________________________________________________________________
8. The plaintiffs, attempting to distinguish the Lanham decision from the
Wilson decision relied on by the district court, argue that "the railroad
in
Lanham was unsuccessful [at avoiding liability] because of the protection
provided by 45 U.S.C. Section 55." Plaintiffs' Brief at 16. As Conrail
points out, however, the Lanham court's analysis turned on the specific
language of the release and the intent of the parties, and not on some
general prohibition grounded in the language ofS 55. Consequently, the
Lanham court's reference to 45 U.S.C. S 55 is dictum.
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there is a way to protect employees' statutory rights while
also upholding the parties' right to settle claims by
contract.
A bright line rule like the one set forth in Babbitt, limiting
the release to those injuries known to the employee at the
time the release is executed, has the benefit of
predictability. Under Babbitt, "a release must reflect a
bargained-for-settlement of a known claim for a specific
injury, as contrasted with an attempt to extinguish
potential future claims the employee might have arising
from injuries known or unknown by him." 104 F.3d at 93.
The Sixth Circuit noted that the releases in Shubert and
Duncan were void because they "granted general immunity
to the railroad as opposed to addressing a specific instance
of disputed liability." Id.
Yet, it is entirely conceivable that both employee and
employer could fully comprehend future risks and potential
liabilities and, for different reasons, want an immediate and
permanent settlement. The employer may desire to quantify
and limit its future liabilities and the employee may desire
an immediate settlement rather than waiting to see if
injuries develop in the future. To put it another way, the
parties may want to settle controversies about potential
liability and damages related to known risks even if there is
no present manifestation of injury.
The question still remains whether a rule allowing parties
to release claims related to known risks rather than known
injuries reflects FELA's remedial goals. We believe it does.
We hold that a release does not violate S 5 provided it is
executed for valid consideration as part of a settlement, and
the scope of the release is limited to those risks which are
known to the parties at the time the release is signed.
Claims relating to unknown risks do not constitute
"controversies," and may not be waived underS 5 of FELA.
See Callen, 332 U.S. at 631. For this reason, a release that
spells out the quantity, location and duration of potential
risks to which the employee has been exposed -- for
example toxic exposure -- allowing the employee to make a
reasoned decision whether to release the employer from
liability for future injuries of specifically known risks does
not violate S 5 of FELA.
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To the extent that a release chronicles the scope and
duration of the known risks, it would supply strong
evidence in support of the release defense. But we are wary
of making the validity of the release turn on the writing
alone because of the ease in writing detailed boiler plate
agreements; draft releases might well include an extensive
catalog of every chemical and hazard known to railroad
employment. For this reason, we think the written release
should not be conclusive. We recognize that what is
involved is a fact-intensive process, but trial courts are
competent to make these kinds of determinations. While
the elusiveness of any such determination might counsel in
favor of a bright-line rule such as the Sixth Circuit adopted
in Babbitt, we decline to adopt one here.
Instead, we conclude that a release may be strong, but
not conclusive, evidence of the parties' intent. Where a
specific known risk or malady is not mentioned in the
release, it would seem difficult for the employer to show it
was known to the employee and that he or she intended to
release liability for it. Furthermore, where a release merely
details a laundry list of diseases or hazards, the employee
may attack that release as boiler plate, not reflecting his or
her intent. We recognize that this is a different (and more
difficult) standard for railroad employers than is typical in
non-FELA situations, but given the Supreme Court's pro-
employee construction of the FELA, see Kernaw v. American
Dredging Co., 355 U.S. 426, 432 (1958) ("it is clear that the
general congressional intent was to provide liberal recovery
for injured workers"); Boyd, 338 U.S. at 265 ("Congress
wanted Section 5 to have the full effect that its
comprehensive phraseology implies.") (internal quotation
omitted), we adopt it.
IV.
Applying this standard, we hold that the releases in
question are invalid under S 5 of FELA. While there is little
doubt the parties were involved in settling claims, the
question of the parties' intent is more problematic.
As a general matter, the language of the releases appears
to recite a standard waiver of liability. Even though there is
20
no factual dispute that the agreements were reached during
settlement negotiations, and that plaintiffs were all
represented by counsel, the releases do not demonstrate
the parties understood, let alone addressed or discussed,
the scope of the claims being waived. For example, the
McKee and Weaver releases are short, pro forma waivers,
and do not indicate the parties negotiated any part of the
releases other than the amount of settlement. At the other
extreme, the releases signed by Wicker and Kleiner are
more detailed, blanket releases which attempt to cover all
potential liabilities. But these releases merely recite a series
of generic hazards to which Wicker and Kleiner might have
been exposed, rather than specific risks the employees
faced during the course of their employment. Consequently,
the releases do not demonstrate the employees knew of the
actual risks to which they were exposed and from which
the employer was being released. Even the Kaltenbrunner
release, which contains a special exclusion for claims
relating to carpal tunnel syndrome, does not recite that
plaintiff was aware of and understood the other risks to
which he was exposed. Consequently, there is no evidence
that any of the plaintiffs, despite being represented by
counsel, was aware of the potential health risks to which he
had been exposed. Therefore, they could not have properly
waived these claims.
Conrail contends that even if the releases apply only to
injuries plaintiffs were aware of at the time they signed the
releases, their claims here are still barred because they had
knowledge of at least some of their symptoms. Although
plaintiffs testified they were aware of certain symptoms
when they signed the releases, the record does not
demonstrate that they knew that these symptoms were
related to their exposure to toxic chemicals at Conrail's
plant. To the contrary, plaintiffs testified they did not
connect the symptoms with their chemical exposure until
after they had signed the releases, and that they were not
aware of the risks associated with the various chemicals
used at Conrail's facility. Therefore, the releases could not
have settled claims with respect to those risks, and cannot
bar plaintiffs' claims.
As noted, we hold that S 5 of FELA allows an employer to
negotiate a release of claims with an employee provided the
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release is limited to those risks which are known by the
parties at the time the release is negotiated. In the case
before us, we find the releases signed by the parties violate
S 5 because they purport to settle all claims regardless
whether the parties knew of the potential risks. Because
the releases cannot bar plaintiffs' FELA claims, we will
reverse the judgment of the district court and remand for
proceedings consistent with this opinion.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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