In Connecticut, Global Release “Non-Binding” with Respect to Workers’ Compensation Claims Until Approved by Commissioner

In a recent decision, the Connecticut Supreme Court gave teeth to the provisions of Connecticut General Statute § 31-296 of the Connecticut Workers’ Compensation Act—which provide a mechanism through which employers and employees can work together to reach a private agreement regarding the compensation owed to an employee who suffers a workplace injury. In so doing, the court offered a stark reminder to employers that “while voluntary agreements or stipulations may be reached between employees and employers regarding the settlement of workers’ compensation claims, such agreements are non-binding until approved by a commissioner.”

In Leonetti v. MacDermid, Inc., the court held that a “global release” entered into between MacDermid, Inc. and its former employee, Stephen Leonetti, paying him over $70,000 in exchange for his release of all claims—including a workers’ compensation claim stemming from a five-year old back injury—was non-binding on Leonetti, because it was not approved by the workers’ compensation commissioner. The court held that “regardless of whether the agreement entered into by the parties might be enforceable at common law,”—and despite the fact that the agreement expressly released the workers’ compensation claim—the agreement had “no effect” on the workers’ compensation claim until it is approved by a commissioner.

In this case, Leonetti made it clear to his former employer that he did not wish to waive his workers’ compensation claim. In fact, Leonetti’s attorney warned the company that the agreement “really has no effect without the commissioner’s approval.” Nonetheless, the company refused to modify the language of the agreement, and refused to attend the hearing scheduled by Leonetti for approval by the commissioner—instead threatening to withdraw its offer if Leonetti did not sign the agreement within 10 days. Leonetti ultimately signed the agreement, collected the $70,000 in severance pay, and then scheduled a hearing with the workers’ compensation commissioner to determine the enforceability of the agreement with respect to his workers’ compensation claim.

The commissioner decided, and the Connecticut Supreme Court affirmed, that the agreement had no effect on Leonetti’s workers’ compensation claim—as it was not approved pursuant to § 31-296. Further, given that Leonetti made it clear that he did not wish to waive his workers’ compensation claim, the commissioner refused to approve of the release retroactively. As a result, Leonetti was free to pursue his claim, despite the clear and agreed-upon language of the “global release”—which expressly included workers’ compensation claims. While not expressly discussed in the ruling, claims brought under Connecticut General Statute § 31-290a (retaliation for bringing a workers’ compensation claim) also cannot be waived without approval from the commissioner.

The lesson to be gleaned from Leonetti is that private agreements, even those containing express language releasing workers’ compensation claims, are virtually meaningless with respect to workers’ compensation claims, unless approved by a commissioner pursuant to § 31-296. The language of the release itself and common law contract principles are insufficient to overcome the protections afforded to employees under the Connecticut Workers’ Compensation Act.