Bowman v. Sunoco, Inc. - PA Superior Court Upholds Waiver of Right to Sue Third Parties for Injuries Covered by Workers' Compensation
An employee may sign away her right to sue a third party for injuries covered by workers’ compensation. The Pennsylvania Superior Court recently 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. The plaintiff in the case, Bowman, was employed by a security company and assigned to work as a guard at a refinery. She slipped on ice and injured herself while working. Bowman filed a workers’ compensation claim against her employer, Allied Barton, and eventually resolved it for a lump sum payment of $10,000. One year later, she sued Sunoco, the refinery owner, for negligence in the Philadelphia Court of Common Pleas and claimed that it was responsible for the slippery conditions that caused her fall.
Sunoco filed an amended answer based on a form Bowman signed at the time Allied Barton hired her. Sunoco raised as a defense, the disclaimer Bowman signed at Allied Barton. According to the Superior Court, the disclaimer 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.
Sunoco filed for judgment on the pleadings. There was no Pennsylvania case regarding a waiver of the right to sue a third party as a condition for employment. Plaintiff eventually responded by arguing that the waiver violated public policy and provisions of the Pennsylvania Workers’ Compensation Act. The court entered judgment in favor of Sunoco because there was no factual dispute and commented that the plaintiff failed to raise any issues about duress, a contract of adhesion or fraud.
Both the trial court and the Superior Court rejected the “against public policy” argument. Plaintiff argued that the waiver improperly barred a cause of action that did not exist when Bowman signed the document as a condition of employment. Second, plaintiff asserted that the waiver violated the Workers’ Compensation Act because it improperly extinguished the employer’s right to subrogation. The Superior Court reasoned that there was no specific provision in the Pennsylvania Workers’ Compensation Act that prohibited the use of the waiver. The narrow holding is that: (1) the disclaimer is not against public policy (i.e. the Workers’ Compensation Act) because it did not deprive Bowman of her workers’ compensation benefits; and (2) an employer is free to waive the right to be reimbursed for those payments. The decision did not address how the holding related to duress, a contract of adhesion, fraud or potential fact issues concerning the signing of the disclaimer.
The full impact of this case on the employee/employer relationship and the vendor/service provider relationship remains unclear. On January 15, 2010, Bowman filed a Petition for Allowance of Appeal with the Pennsylvania Supreme Court. We will continue to monitor this appeal and report on the case. The enforceability of a similar third-party claim waiver in a different employment situation may well depend on whether there is evidence of duress, an unenforceable contract of adhesion or fraud. In the meantime, please contact Jerry Anders, Eileen Monaghan Ficaro, or another member of the Construction Practices Group if you are interested in exploring how this waiver and disclaimer may apply to your business to protect your interests and customers from lawsuits.
