Leonetti v. MacDermid, Inc.

• Decision Date: 01 October 2013
• Docket Number: SC 19085
• Court: Connecticut Supreme Court
• Parties: STEPHEN J. LEONETTI v. MACDERMID, INC., ET AL.

STEPHEN J. LEONETTI v. MACDERMID, INC., ET AL.

SC 19085

Supreme Court of Connecticut

Argued May 15, 2013

Officially released October 1, 2013

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John Horvack, Jr., with whom, on the brief, were Fatima Lahnin and John Cordani, Jr., for the appellant (named defendant).

Jill F. Morrissey, with whom were David Morrissey and, on the brief, Laura M. Mooney, for the appellee (plaintiff).

Opinion

EVELEIGH, J. General Statutes § 31-296 (a)¹ of the Workers' Compensation Act (act) provides a mechanism through which employers and employees can work together to come to an agreement regarding the compensation owed to an employee who suffers an injury that falls within the purview of the act. Section 31-296 (a) instructs the Workers' Compensation Commissioner (commissioner) to approve these agreements only if the commissioner "finds such agreement to conform to the provisions of this chapter in every regard The principal issue in this appeal is whether the Workers' Compensation Review Board (board) properly affirmed the commissioner's refusal to approve as a valid "stipulation"² a "termination agreement" (agreement) between the plaintiff, Stephen J. Leonetti (claimant), and the named defendant, MacDermid, Inc. (respondent).³ The commissioner, relying on the claimant's testimony, found that there was no consideration offered by the respondent to the claimant in exchange for the release of his previously accepted workers' compensation claim. The respondent appealed from the decision of the commissioner to the board, which affirmed the decision of the commissioner. The respondent appealed from the board's decision to the Appellate Court pursuant to General Statutes § 31-301b.⁴ We transferred the appeal to this court pursuant to General Statutes § 51-199 (c) and Practice Book § 65-1. We now affirm the decision of the board.

The record reveals the following undisputed facts and procedural history. The claimant worked for the respondent for twenty-eight years until he was discharged in early November, 2009. Five years earlier, in June, 2004, the claimant sustained a lower back injury during the course of his employment. The claimant timely filed notice of a workers' compensation claim related to this injury on April 14, 2005. The parties stipulated to the commissioner that the injury suffered by the claimant was a compensable injury.

At the time that the respondent informed the claimant that he would be discharged from his employment, the respondent presented the claimant with a proposed termination agreement. Article II of the agreement signed by the parties provides that the claimant agreed to release the respondent from the following: "any and all suits, claims, costs, demands, attorney's fees, damages, back pay, front pay, interest, special damages, general damages, workers' compensation claims, punitive damages, liabilities, actions, administrative proceedings, expenses, accidents, injuries and any other cause of action in law or equity that [the claimant] has or may have or might in any manner acquire which arise out of, relate to, or is in connection with his/her employment with, relationship with or business dealings with [the respondent] . . . or the termination ofthat employment, relationship or dealings, or any other act, occurrence or omission, known or unknown, which occurred or failed to occur on or before the date this [a]greement is executed."

Article III of the agreement provides that, in consideration "for the agreements and covenants made herein, the release given, the actions taken or contemplated to be taken, or to be refrained from," the claimant would be paid twenty-seven weeks "severance pay, determined solely upon the [claimant's] current base salary," which amounted to $70,228.51, within thirty days of the respondent's receipt of the properly executed agreement; the claimant would continue to earn paid time off through his final day of employment; the claimant would be able to continue to obtain medical and dental benefits for up to eighteen consecutive months from his last date of employment under the Consolidated Omnibus Budget Reconciliation Act of 1985; 29 U.S.C. §§ 1161 through 1168; and the claimant had the option to convert group life insurance to individual life insurance within thirty days of his last day of employment.

Article III of the agreement also provided that "[the claimant] understands that the payments and benefits listed above are all that [the claimant] is entitled to receive from [the respondent]. . . . [The claimant] agrees that the payments and benefits above are more than [the respondent] is required to pay under its normal policies, procedures and plans." (Emphasis in original.)

Article IV of the agreement also required the claimant to enter into a one year noncompete agreement and also contained a clause stating in part that "[the claimant] acknowledges that he has been given a reasonable period of time of at least thirty (30) days to review and consider this [a]greement before signing it. [The claimant] is encouraged to consult his or her attorney prior to signing this [a]greement." (Emphasis in original.)

The claimant did not want to release his preexisting workers' compensation claim relating to the 2004 injury by signing the agreement. He consulted with his attorney, who contacted the respondent's counsel and requested that the respondent remove from the agreement the language that could operate to release the claimant's workers' compensation claim. The respondent refused to modify the language of the agreement. The claimant's counsel wrote a letter to the respondent's counsel asserting that the release language of article II of the agreement "really has no effect without the [c]ommissioner's approval" and scheduled an informal hearing before a workers' compensation commissioner for January 8, 2010. The respondent's counsel did not attend the informal hearing, although a representative of Liberty Mutual Insurance Group, which administered the claim on behalf of the respon-dent, did attend. Nothing was resolved on January 8, and on January 27, 2010, the hearing was rescheduled for March 1, 2010.

On January 26, 2010, the respondent sent the claimant a letter stating that, unless the claimant signed the unmodified agreement within the next ten days, it would withdraw its offer of $70,228.51 in severance pay. The claimant signed the agreement on February 2, 2010, and the commissioner found that the claimant did so because he did not wish to forfeit his severance pay. After the respondent received the signed agreement from the claimant, it paid the claimant the $70,228.51. At that time, the commissioner had not approved the agreement as a "voluntary agreement" or stipulation as defined in § 31-296.

A formal hearing was held several months later to determine the enforceability of the language in article II of the agreement that dealt with the release of the claimant's workers' compensation claim. Specifically, the parties asked the commissioner to determine as follows: (1) "[w]hether a signed termination agreement between [an] employer and [an] employee can effectively waive the parties' rights and obligations set forth in the [act] . . . absent approval of the agreement by a [commissioner]"; and (2) "[i]f the termination agreement does not waive the parties' rights and obligations set forth in the [act]—whether the [c]ommissioner would issue an order that the termination agreement be entered as a full and final stipulation of the [c]laimant's workers' compensation claim against the [respondent]."

The commissioner first found that, without approval by a commissioner, the agreement did not effectively waive the parties' rights and obligations under the act. Next, the commissioner found that the agreement should not be approved as a full and final stipulation of the claimant's workers' compensation claim. In making this determination, the commissioner credited the claimant's testimony that "the [agreement] and payment of $70,228.51 was based on the number of years [the claimant] worked for the [respondent] and there was no money paid in this agreement for [the claimant's] workers' compensation claim." As a result, the commissioner found that the respondent had paid no consideration to the claimant for his accepted workers' compensation claim. In light of these findings, the commissioner found that the Workers' Compensation Commission (commission) retained jurisdiction over the claimant's 2004 injury and scheduled a further hearing on the claimant's assertion that the injury...