Can a potential Fair Employment and Housing Act (FEHA) employment discrimination complaint be resolved in a Compromise and Release agreement? The answer is - Yes and No.

In Mary J. Jefferson v. California Dept. of Youth Authority (2002), 67 CCC 727, No. S097104 (Calif. Supreme Court), the California Supreme Court agreed that an employee could resolve her FEHA employment discrimination complaint (related to her workers' comp disability) could be settled in a C&R where the employee agreed the settlement resolved "any and all causes of action related to the injury" covered by the C&R. This means the employee cannot continue with an existing FEHA complaint nor can s/he initiate a complaint after the C&R is approved. The C&R with this language thus protects the employer against legal action initiated by the employee under the FEHA disability provisions.

That's the good news. The bad news for employers is that such a C&R does not protect them from possible action by the Department of Fair Employment and Housing (DFEH). DFEH can still investigate the matter and, if it determines that the employer may have engaged in an act or acts of discrimination based on disability, initiate an action against the employer. Employers cannot assume that a C&R with the language noted above provides absolute protection against an FEHA action nor should claims administrators suggest that it does.

The Jefferson case may, in the end, represent little more than a Pyrrhic victory for employers. It seems unlikely that applicant attorneys will now agree to such language unless there is a significant monetary consideration for the employee.

Contributed by vocational rehabilitation expert Allan Leno, Leno & Associates, (818) 370-8859 allanleno@leno-assoc.com.