News & Updates

Waiver of Right to Sue Third Parties for Injuries Covered by Workers’ Compensation Upheld May 1, 2013

On April 25, 2013, the Pennsylvania Supreme Court ruled in Bowman v. Sunoco, Inc. that a waiver of a right to sue third parties for injuries covered by workers’ compensation — signed as a condition of employment — bars a negligence lawsuit against the employer’s customers. 

Sabrina Bowman was employed by a security company and assigned to work as a guard at a refinery. She slipped on ice while working, injured herself, and ultimately received workers’ compensation benefits. Subsequently, she sued Sunoco, the refinery owner, in the Philadelphia Court of Common Pleas, asserting that Sunoco negligently allowed ice or snow to accumulate on the ground at its refinery. Sunoco raised as a defense the disclaimer Bowman signed at Allied Barton. As a condition of pre-employment, Ms. Bowman signed a disclaimer which included the following language:

I understand that state Workers’ Compensation statutes cover work-related injuries that may be sustained by me. If I am injured on the job, I understand that I am required to notify my manager immediately. The manager will inform me of my state’s Workers’ Compensation law as it pertains to seeking medical treatment. This is to assure that reasonable medical treatment for an injury will be paid for by Allied’s Workers’ Compensation insurance. As a result and in consideration of Allied Security offering me employment, I hereby waive and forever release any and all rights I may have to:

  •  
    •  
      • make a claim, or
      • commence a lawsuit, or
      • recover damages or losses

 

 

from or against any customer (and the employees of any customer) of Allied Security to which I may be assigned, arising from or related to injuries which are covered under the Workers’ Compensation statutes.

The Superior Court entered judgment in favor of Sunoco as there was no factual dispute and commented that Ms. Bowman failed to raise any issues about duress, a contract of adhesion or fraud. The Superior Court found no statutory or case law supporting the application of § 204(a) to third-party customers, and reasoned that third-party releases do not divest employees of workers’ compensation rights. 

The Supreme Court affirmed the order of the Superior Court, noting that until December 5, 1974, the compensation provisions set forth in under the act were elective. Based on the history, the Supreme Court determined that the legislature originally intended and presently intends the provisions of § 204(a) to apply only to agreements to bar a claim against an employer. The employer’s waiver of subrogation is a business decision affecting only itself and does not prevent the employee from receiving full compensation for her work-related injuries. As long as the release relates to recovery from third-parties for work-related injuries covered by the act, an employee may bargain away her rights.   

The decision does not address how duress, a contract of adhesion, fraud, or potential fact issues concerning the signing of the disclaimer would be viewed by the court. 

Under § 319, if the compensable work injury is caused in whole or in part by the act or omission of a third part, the employer shall be subrogated to the right of the employee, his/her personal representative, and his/her estate or dependents against such third party to the extent of the compensation payable. For many employers whose employees work at the customers’ place of business, it is more important to protect their clients from suits than retain a subrogation right under the act.  ny pre-employment disclaimer must fully recognize an employee’s right to receive workers’ compensation for any work-related injury.      

If you have questions about how this may impact your business, please contact: