Jefferson v. Department of Youth Authority

In Jefferson v. Department of Youth Authority (2002) 28 Cal.4th 299, the California Supreme Court held that " when . . . an employee has knowledge of a potential claim against the employer at the time of executing a general release in a workers' compensation proceeding, but has not yet initiated litigation of that claim, the employee has the burden of expressly excepting the claim from the release. Absent this exception, and absent contrary extrinsic evidence, a court will enforce general language, such as is found in the compromise and release . . . releasing all claims including civil claims." (Jefferson, supra, 28 Cal. 4th at p. 310.) In Jefferson, the Supreme Court observed that "if courts did not enforce general releases, an employer . . . seeking a comprehensive settlement, would have to struggle to enumerate all claims the employee might plan to allege. The employer would never be able to know for sure that it had thought of every claim, and therefore it would never be able to put a definitive end to the matter. Employers would then be disinclined to enter into settlements, because certainty as to the full extent of liability is one factor that motivates employers to choose settlement over litigation." (Jefferson, supra, 28 Cal. 4th at p. 306.) The Jefferson court further stated, "when Jefferson executed the compromise and release in this case covering 'all claims and causes of action,' she fully appreciated the possibility of obtaining FEHA damages. In fact, at the time of the settlement, she had already filed a complaint with the Department of Fair Employment and Housing and therefore not only contemplated the possibility of FEHA remedies but was also actively pursuing those remedies. Therefore, when she released 'all claims and causes of action' relating to the injury, she knew, or should have known, that her FEHA claim would fall within the scope of that broad language." (Jefferson, supra, 28 Cal.4th at p. 305.) Her employer, by contrast, had no notice of Jefferson's impending lawsuit. (Id. at pp. 302-303.) The court based its decision on the following two factors: "(1) the parties included an attachment in their settlement agreement that made clear their intent to settle matters outside the scope of workers' compensation; and (2) Jefferson offered no extrinsic evidence establishing the parties' intent to exclude her FEHA claim from the settlement." (Jefferson v. Department of Youth Authority, supra, 28 Cal.4th at page 304.) The Jefferson court further noted that "Asare is distinguishable from this case because extrinsic evidence in Asare established the parties' intent not to settle the FEHA action. " (Jefferson v. Department of Youth Authority, supra, 28 Cal.4th at page 309.)