Pennsylvania: Waiver of Future Subrogation Rights Must Be Clear and Explicit

Where the employer joined into a third-party settlement agreement that stated the employer agreed to a payment of a sum certain “in full satisfaction of the defendant/employer’s (and its workers’ compensation insurance carrier’s) right to subrogate against the third party settlement,” the waiver applied only to past workers’ compensation benefits paid. While the claimant testified it was her “understanding” that the employer waived its right to subrogation against future benefits payable to claimant—an earlier draft of the agreement had such a provision—the court concluded that claimant’s “understanding” of the corrected settlement agreement was insufficient evidence to support her burden. The court acknowledged that the corrected agreement’s language could reasonably be interpreted, as claimant suggested, to mean that the accepted sum completely satisfied the employer’s subrogation rights, both for the past and future. However, as the employer noted, there was no explicit waiver or mention of future subrogation rights contained within the corrected agreement. Thus, the term “full satisfaction” could also reasonably be interpreted to merely mean waiver of subrogation rights only to the extent of the employer’s accrued lien, which was specifically calculated in the agreement. Without a clear waiver of future rights, the employer had the absolute right of reimbursement.

Thomas A. Robinson, J.D., the Feature National Columnist for the LexisNexis Workers’ Compensation eNewsletter, is a leading commentator and expert on the law of workers’ compensation.

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See Fortwangler v. Workers’ Comp. Appeal Bd. (Quest Diagnostics), 2015 Pa. Commw. LEXIS 140 (Mar. 31, 2015) [2015 Pa. Commw. LEXIS 140 (Mar. 31, 2015)]

See generally Larson’s Workers’ Compensation Law, § 117.01 [117.01]

Source: Larson’s Workers’ Compensation Law, the nation’s leading authority on workers’ compensation law.