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. e du/thir dc ir c uit_1998/95Filed April 29, 1998

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 97-3034, 97-3035, 97-3036

97-3037 and 97-3038

EDWARD L. WICKER, SR., Appellant at No. 97-3034

SAMUEL D. WEAVER, Appellant at No. 97-3035

THOMAS E. KLEINER, Appellant at No. 97-3036

JOHN W. McKEE, Appellant at No. 97-3037

JOHN M. KALTENBRUNNER, Appellant at No. 97-3038

v.

CONSOLIDATED RAIL CORPORATION

On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. Civil Action Nos. 93-cv-00041J, 94-cv-00015J 94-cv-00036J, 94-cv-00132J and 95-cv-00105J)

Argued September 23, 1997

Before: BECKER, Chief Judge, SCIRICA and McKEE, Circuit Judges

(Filed: April 29, 1998)JAMES M. FLOOD, ESQUIRE

(ARGUED)
HOWARD S. STEVENS, ESQUIRE

Stevens & Johnson

740 Hamilton Mall Allentown, Pennsylvania 18101

Attorneys for Appellants

STEPHEN M. HOUGHTON, ESQUIRE (ARGUED)

PETER T. STINSON, ESQUIRE Dickie, McCamey & Chilcote Two PPG Place, Suite 400 Pittsburgh, Pennsylvania 15222-5402

Attorneys for Appellee

OPINION OF THE COURT

SCIRICA, Circuit Judge.

The issue on appeal is whether S 5 of the Federal Employers' Liability Act1 voids a general release o f claims given as part of a negotiated settlement.

I.

A.

Plaintiffs Edward Wicker, Sr., Samuel Weaver, Thoma s Kleiner, John McKee and John Kaltenbrunner are all former employees of defendant Consolidated Railroad Corporation who were injured during the course of t heir

___________________________________________________ ______________

1. Section 5 of FELA provides:

Any contract, rule, regulation, or device wh atsoever, the purpose

or intent of which shall be to enable the commo n carrier to exempt itself from any liability created by this ch apter, shall to that

extent

be void . . . .

45 U.S.C. S 55 (1986).

2employment. Each plaintiff negotiated a settlement of

claims with Conrail and executed a release. While t he releases were not identical, each appeared to settl e all claims for all injuries past and future. Plaintiffs subsequently suffered injuries as a result of expos ure to toxic chemicals at Conrail's Hollidaysburg Reclamat ion Plant in Blair County, Pennsylvania.

B.

Edward Wicker retired from Conrail in 1982. Before retiring, Wicker suffered injuries as a result of e xposure to asbestos and, in January 1988, signed a release set tling his

asbestos related claims. Wicker believed the releas e related solely to his asbestos injuries, and testified he w ould not have executed a release with a broader scope. Wicke r claims he was also exposed to trichlorethylene and trichloroethane while employed at Conrail, and may have been exposed to other toxic chemicals without his knowledge. Wicker now suffers from blackouts, seizu res, vertigo, stiffness in his hands, and burn spots in front of his eyes, all of which he attributes to his exposur e to chemicals while employed at Conrail. He does not be lieve any of his injuries are related to asbestos exposur e, the subject of his initial settlement.

Samuel Weaver was employed by Conrail from 1974 unt il 1991. In February 1989, Weaver severely injured his back on the job. In September 1991, Weaver signed a rele ase and a Letter of Agreement not to return to work. Weaver believed the release related only to his back injur y, and said he would not have signed it otherwise. Weaver testified that he was exposed to chemicals during the course of his employment, and alleges that he suffers from swolle n eyes, infected tear ducts, nosebleeds, headaches, respira tory difficulties, an enlarged liver, skin rashes, dizzi ness, lipomas, cracking lips, indigestion, overgrowth of skin on his thumbs, xerodermatitis, shortness of breath, fa tigue, black mucous substances in his mouth and nose, foot numbness, muscle cramps, spastic colon and benign lumps. Weaver claims that while some symptoms exist ed at the time he executed the release, many are recent

3developments which were not discovered until after he had

signed the release.

Thomas Kleiner was exposed to asbestos while employ ed by Conrail. In August 1992, Kleiner signed a genera l release. Kleiner's attorney, Robert Kosseff, testif ied that

neither he nor Kleiner were aware at the time the r elease was executed that Kleiner had been injured by expos ure to

chemicals other than asbestos. Kleiner said that he was exposed to various chemicals when he worked on a "s lop truck," cleaning out vats filled with caustic soda, soaps, cleaners, chlorinated solvents, and other chemical wastes. As a result, Kleiner suffers from respiratory diffi culties, black mucous in his nose and mouth, skin rashes, fa tigue, headaches, chest pain, numbness, muscle cramps, nos e bleeds, coughing and sinusitis.

In April, 1990, John McKee injured his back while working for Conrail and, as a result, was unable to work for approximately two years. He returned to work briefl y and before retiring signed a release and letter of agre ement on September 11, 1992, similar to those signed by Weav er. At the time he executed the release, McKee was represe nted by Robert Kosseff, who testified that neither he nor h is client was aware that McKee had been injured by exposure t o toxic chemicals. McKee suffers from headaches, resp iratory difficulties, nausea, light headedness, skin rashes , chronic indigestion, a bleeding stomach ulcer, kidney stone s, blood clots, nervous disorder, and dermatitis. Although M cKee testified that he had experienced many of these sym ptoms before executing the release, he explained that hef irst connected his symptoms to chemical exposure after h e signed the release.

John Kaltenbrunner injured his back in April 1990 w hile employed by Conrail. In November 1994, Kaltenbrunne r signed a release, and a letter of agreement identic al to those signed by Weaver and McKee stating that he wo uld not return to his job. Kaltenbrunner testified he w as unaware of his exposure to toxic chemicals during h is employment, and that, as a result, he suffers injur ies apart from his back injury, including rashes, joint pain, respiratory problems, sinusitis, skin "eruptions," and Legionnaires Disease. Kaltenbrunner also testified that

4some of these symptoms manifested themselves before

executing the release.

C.

The releases signed by Wicker and Kleiner were simi lar in form and substance, and appear to release Conrail f rom liability for all claims, both past and future, rel ating to their employment. Wicker's release provides, in part:

I, Edward Wicker . . . for the sole consider ation of Twenty-one Thousand Dollars ($21,000) . . . hereby release and hereby discharge Consolidated Ra il Corporation . . . from any and all losses, c laims, liabilities, actions, causes of action . . . and demands of any kind whatsoever in nature . . . which I have or to which I claim to be entitled by reason of any injuries, known or unknown, foreseen or unfo reseen . . . which now exist or which may arise in the future as a result of or in any way connected with my alleged exposure to any material, substance, product , and/or good(s) of any kind or nature (including but not limited to dust, fumes, vapors, mists, gases, agents , asbestos or toxic substances of any kind) supplied or permitted to exist by [Conrail], and/or arising out of any working condition, of any kind, during my employment by [Conrail] . . . .

I hereby declare and represent that the inju ries and illnesses which have been or may be sustaine d, including mental conditions resulting from a sbestos exposure or exposure to any substance, condi tion or environment or a belief that I was exposed t o asbestos, or any substance, condition or environment, are, or may be permanent, and that recovery therefro m is uncertain and indefinite, and that they may cause or lead to other deleterious conditions, includ ing but not limited to cancer, and that in making this R elease, it is understood and agreed that I rely wholly upo n my own judgment, belief, and knowledge of the natur e, extent, effect, duration, and other possible results of said injuries, illnesses, conditions, exposures, and liability therefore, and that the release is made with out reliance

5upon any statement or representation by [Con rail] . . .

and that possible future conditions, as yet undetected, including but not limited to cancers of any kind, are

included.

McKee and Weaver each signed a standard release for m entitled "General Release." These releases provide in part:

I, [Plaintiff] hereby release and forever di scharge [Conrail] from all claims, demands, actions and causes of action of every kind whatsoever and inclu ding but without limitation of the foregoing, all lia bility for damages, costs, expenses and compensation of any kind, nature or description now existing or which may hereafter arise from or out of injuries and damages, known or unknown, permanent or otherwise, su stained or received by [plaintiff arising from the s pecific incident being settled].

The release signed by Kaltenbrunner, while similar to those signed by Weaver and McKee, also contains a separate exclusion preserving his claims for carpal tunnel syndrome. That release provides in part:

I, John M. Kaltenbrunner, for the sole consi deration of Fifty Thousand Dollars ($50,000.00) . . . do hereby release and forever discharge [Conrail] from all claims, demands, actions and causes of action of eve ry kind whatsoever and including, but without limita tion of the foregoing, all liability for damages, costs, expenses and all incidents, illnesses, diseases, conditio ns, injuries and damages, known or unknown, permanent or

otherwise . . . .

THIS RELEASE SPECIFICALLY EXCLUDES ANY

CLAIMS OR CAUSES OF ACTION THAT JOHN

KALTENBRUNNER HAS OR MAY HAVE IN THE

NATURE OF OCCUPATIONALLY RELATED CARPAL

TUNNEL SYNDROME OR OCCUPATIONALLY RELATED

REPETITIVE MOTION INJURIES INVOLVING THE

UPPER EXTREMITIES ONLY BUT DOES NOT WAIVE

ANY SUBSTANTIVE OR PROCEDURAL DEFENSES

THERETO.

6D.

Each plaintiff brought suit under FELA, alleging va rious injuries because of exposure to hazardous and toxic substances during the course of their employment wi th Conrail. Conrail sought summary judgment, citing th e previously executed releases. Contending the releas es barred only their claims for back injury and asbest os exposure, plaintiffs raised contract defenses of mu tual mistake, fraud, ambiguity and lack of consideration . They also argued the releases were unenforceable underS 5 of FELA, 45 U.S.C.A. S 55 (1986). The district court consolidated the cases and granted Conrail's motion s. This appeal followed.

E.

The able district judge observed that the executed releases "contain language which, on its face, reli eves the defendant from future liability for any type of dam age or harm suffered by the plaintiffs while in the railro ad's employ." Edward L. Wicker, Sr., et al. v. Consolida ted Rail Corporation, Civ. Nos. 93-41J, 94-15J, 94-36J, 94-1 32J, 95-105J (W.D. Pa. December 31, 1996) ("Wicker") at 6. Finding the language of the releases unambiguous an d no evidence of mutual mistake, the court rejected plai ntiffs' contract defenses. Because plaintiffs were represen ted by counsel and the releases were negotiated at arm's l ength, the court also rejected plaintiffs' argument that t hese were

contracts of adhesion.

Addressing plaintiffs' FELA defense, the court acknowledged the split of authority on the enforcea bility of broadly written releases. It then turned to its rec ent decision in Wicker v. Conrail, Civ. No. 94-16J (Dec ember 19, 1996) ("Wicker II"), which "accorded great weig ht to the plaintiff 's continuing employment with Conrail aft er settlement of his [original claim]." Wicker at 18. By contrast, each plaintiff here negotiated his releas e in the context of terminating, or already having terminate d, his employment with Conrail. According to the court, th ese releases "served the beneficial purpose of adjustin g, and providing finality to, all claims between the parti es." Id.

7The district court also looked to Wilson v. CSX Tra nsp.

Inc., Civ. No. 91-1398, slip op., (W.D. Pa. March 9 , 1994), in which plaintiff sued his employer for shoulder i njuries sustained in a work-related accident. Through settl ement, plaintiff released his employer from "all claims, s uits, [etc.] . . . which the [plaintiff] has or might have again st [the railroad] . . . for any and all injuries . . . occu rring prior to the date of [the release], including but not limite d to injuries arising out of or in any way connected wit h[the shoulder injury]." Wilson, slip op. at 4. The term "injury"

was defined in the release to include both known an d unknown injuries. Several years later, plaintiff su ed for an occupational hearing loss, arguing the claim was no t barred because the release related only to claims arising from the injury to his shoulder, and the hearing loss did no t accrue until after the settlement was signed. Granting the railroad's motion for summary judgment, the court n oted the release specifically encompassed all injuries o ccurring prior to the date of settlement, regardless of whet her plaintiff was aware of them. The Wilson court also noted the general release at issue "indicates that the partie s were settling all known and unknown claims of injury . . . [and] that the parties were severing their relationship f or all time and defendant was `buying its peace' with plaintiff as to any such injuries." Wilson at 7.

In addition, the district court here reasoned that the economic motivation behind negotiating a broadly wo rded release is consistent with the congressional purpos es of FELA. The court found that persons who sign general releases tend to receive larger settlements, and th at defendants are willing to pay higher sums to settle claims under a general release.2 This, together with plain tiffs' representation by counsel led the court to believe that

enforcement of the releases was "in the interest of both parties, when viewed from the time of the negotiati ng of the agreement." Wicker at 20.

___________________________________________________ ______________

2. "Broadly worded releases negotiated with departi ng or retired employees, as a matter of economic analysis, do not permit a FELA employer to exempt itself from future liability . . . [because] the liable employer under such a release pays the full discoun ted value of the known and unknown injuries of the settling parties. " Wicker at 20.

8F.

On appeal, plaintiffs have abandoned their argument s of mutual mistake, fraud, ambiguity, and lack of consideration. Their appeal relies entirely on the assertion that their executed general releases are void under S 5 of FELA, 45 U.S.C.A. S 55 (1986). Plaintiffs contend t hey were unaware of either the injuries or the cause of thos e injuries at the time the releases were executed, and offer s upporting affidavits from the attorneys who represented them at the time. The releases are invalid, they claim, because "[u]nder FELA a release is only valid if it compromises a cl aimed liability." Pls.' Brief at 11. Consequently, S 5 of FELA "prevents workers from releasing claims which they do not know existed at the time they executed a release fo r a separate known claim." Id. Plaintiffs maintain a ge neral

release of unknown and future claims does not bar l ater claims for injuries unknown at the time the release was executed. Id. at 13 (citing Forry, Inc. v. Neundorf er, Inc., 837 F.2d 259 (6th Cir. 1988)); see also Lanham v CSX Tr ansp. Inc., 1995 WL 368171 (E.D. Pa. June 21, 1995)(findi ng that a general release executed in settlement of an empl oyee's claim for a back injury did not bar a subsequent cl aim for an occupational disease of which the employee was
unaware when he executed the release).

Conrail relies on the district court's analysis, es pecially the distinction between current and former employee s. Because the releases were executed as part of a set tlement of existing claims and the termination of employmen t, Conrail contends they were meant to put to rest all present and future claims. Conrail also contends plaintiffs ' asserted symptoms or injuries existed before they executed t he releases. Thus, even if the releases cover only tho se injuries manifest at the time of settlement, the "new" injur ies were nonetheless released because plaintiffs were on not ice of a potential health problem at that time.

G.

The district court had jurisdiction under 28 U.S.C. S 1331 and 45 U.S.C. S 51, as well as supplemental jurisdiction under 28 U.S.C. S 1367. We have jurisd iction

under 28 U.S.C. S 1291.

9We exercise plenary review of a grant of summary

judgment. Dyszel v. Marks, 6 F.3d 116, 123 (3d Cir. 1993). We apply the same test as the district court. Berne r Int'l Corp. v. Mars Sales Co., 987 F.2d 975, 978 (3d Cir. 1993). In so doing, we must view all evidence and draw all inferences therefrom in the light most favorable to the nonmoving party. Id. In this case, the party attacking the validity of the release bears the burden of proof a s to its invalidity. Callen v. Pennsylvania R. Co., 332 U.S. 625, 630 (1948).

II.

A.

In this appeal we must interpret the scope of S 5 o f FELA, and in particular, whether its bar of "[a]ny contra ct . . . the purpose of which shall be to enable [an employer] t o exempt itself" from FELA includes a general release of cla ims executed by an employee as part of a settlement. A brief review of the history of FELA and the accompanying case law is warranted.

In 1908, FELA "was enacted because the Congress was dissatisfied with the common-law duty of the master to his servant." Rogers v. Missouri Pacific R. Co., 352 U. S. 500, 507 (1957). Congress sought to "ensure that the emp loyees' suits would not be defeated by the same devices whi ch Congress perceived to have been used in the immedia te past by the railroads to avoid liability." Damron v . Norfolk & W. Ry. Co., 925 F. Supp. 520, 523 (N.D. Ohio 1995). Thus, FELA was designed "to enable injured railroad worke rs to

overcome a number of traditional defenses to tort l iability that had previously operated to bar their actions." Lewy v. Southern Pac. Transp. Co., 799 F.2d 1281, 1287 (9th Cir. 1986). For example, the Act abolished the doctrine of assumption of risk, applied comparative rather than contributory negligence, and sought to prevent empl oyers from contracting out of FELA liability. See S. Rep. 460, 60th Cong., 1st Sess. 2-3 (1908). With respect to t he last of these, Congress noted that many railroads "insist[e d] on a contract with their employees, discharging the comp any

10from liability for personal injuries." H.R. Rep. 13 86, 60th

Cong. 1st Sess. 6 (1908). Section 5 was passed spec ifically to remedy this problem.

B.

Shortly after FELA's adoption, the Supreme Court be gan to establish the boundaries of S 5. The Court uphel d the validity of S 5 in Mondou v. New York, N.H. & H.R. Co., 223 U.S. 1, 52 (1912), noting that "if Congress possess es the power to impose liability . . . it also possesses t he power to insure its efficacy by prohibiting any contract, ru le, regulation or device in evasion of it." The same ye ar, the

Court examined S 5 in the context of a relief fund agreement by which acceptance of benefits constitut ed a release of all claims against the employer. Philade lphia, B. & W.R. Co. v. Schubert, 224 U.S. 603 (1912). Reason ing that this stipulation was simply a way for the empl oyer to avoid liability by contract, and that it fell withi n the scope of S 5, the court held the release violated FELA. I d. at 612.

Although Schubert addressed only agreements signed before injury, the Court later extended the bar to releases signed after injury. Duncan v. Thompson, 315 U.S. 1 , 5-6 (1942). In Duncan, the injured employee accepted $6 00 to cover his living expenses, agreeing to return the m oney in the event he brought suit against the employer. Whe n the employee filed a claim without first refunding the $600, the railroad raised the contract as a defense. Focusing on whether "the purpose or intent" of the agreement wa s to enable the employer "to exempt itself from any liab ility" under FELA, the Court noted that, because of Duncan 's financial condition, requiring the refund before co mmencing suit was tantamount to depriving him of the right t ofile suit, thereby exempting the employer from liability . Id. at 7. It also noted the $600 was specifically earmarked f or living expenses, and the agreement was a form commonly use d to benefit employees until final settlement was negoti ated. Id. at 7-8. Consequently, it declined to discuss the va lidity of a release signed as part of a bona fide settlement, finding that the "very language of the agreement indicates it is not a compromise and settlement." Id.

11The Court addressed that issue in Callen v. Pennsyl vania

R. Co., 332 U.S. 625 (1948), where a railroad emplo yee brought a FELA action after injuring his back in a workrelated accident. As a defense, the railroad pleade d a general release executed by the employee, signed in exchange for $250, that relieved the railroad of "a ll claims and demands which [plaintiff] can or may have again st the said Pennsylvania Railroad Co. for or by reason of personal injuries sustained." Callen, 332 U.S. at 626. Plain tiff claimed that when he signed the release he was unaw are he had a permanent injury. Although the primary iss ue on appeal was whether the trial judge had improperly withdrawn the question of the release's validity fr om the jury,3

the Court also addressed whether the release violat ed S 5 of FELA. Rejecting this argument, the Court said:

It is obvious that a release is not a device to exempt from liability but is a means of compromisin g a claimed liability and to that extent recognizing its possibility.

Where controversies exist as to whether ther e is liability, and if so for how much, Congress has not said that parties may not settle their claims wit hout litigation.

Id. at 631. The language is clear. Releases are not per se invalid under FELA. Although the Court did not expl ain what will qualify as a "compromis[e] [of] a claimed liability" it did say that parties may settle "[w]here controv ersies exist as to whether there is liability, and if so f or how much." The explicit requirement is that a controver sy must

exist.

The Court provided some clarification in Boyd v. Gr and

___________________________________________________ ______________

3. The Supreme Court held that the validity of the release was a jury question and that the trial judge's misleading inst ructions had effectively withdrawn the issue from the jury's consideration. The Court also rejected the argument that the burden of proof with respect to validity should be shifted to the railroad, noting that, reg ardless of the potential inequality of bargaining power between the parties, such a change was appropriately left to the discretion of Congress. T hus, until Congress "adopt[s] a policy depriving settlements of litigat ion of their prima

facie validity . . . the releases of railroad employees s tand on the same basis

as the releases of others." Id. at 630.

12Trunk W.R. Co., 338 U.S. 263, 266 (1949), noting th at its

Callen decision "distinguished a full compromise en abling the parties to settle their dispute without litigat ion, which we held did not contravene the Act, from a device w hich obstructs the right of the Liability Act plaintiff to secure the maximum recovery if he should elect judicial trial of his cause." In Boyd, the railroad advancedfifty dollars to its employee twice during the month following his work- related injury. On each occasion, the employee signed an agreement which provided that, if he elected to sue , "such suit shall be commenced within the county or distri ct where I resided at the time my injuries were sustai ned, or in the county or district where my injuries were su stained and not elsewhere." Id. at 264. The employee brough t his claim in a different venue and the employer sued to enjoin the action. Examining the venue provision contained in S 6 of FELA,4 the Supreme Court held"the right to selec t the forum granted in s. 6 is a substantial right." Id. at 266. Consequently, "contracts limiting the choice of ven ue" obstruct a FELA plaintiff's fundamental right of re covery, and are therefore "void as conflicting with[S 5 of] the [Federal Employers'] Liability Act."5 Id. at 265.

Despite this ruling, the proper application and rea ch of S 5 remains unclear. One reason may be that the Cou rt's decisions rejecting general releases as bars to sub sequent claims have been fact-driven, and consequently do n ot provide a generally applicable rule of law. Althoug h the Supreme Court in Callen refused to void the release s

___________________________________________________ ______________

4. Section 6 of FELA provides, in part:

Under this chapter an action may be brought in a district court of the United States, in the district of the re sidence of the defendant, or in which the cause of action arose, or in which the defendant shall be doing business at the time of comme ncing such action.

45 U.S.C. S 56 (1986).

5. In addition to voiding general releases of FELA claims under S 5, the Court has also held such releases void on the groun ds of fraud, Dice v. Akron, Canton & Youngstown R. Co., 342 U.S. 359, 36 2 (1952), and lack of consideration, Maynard v. Durham & S. Ry. Co., 3 65 U.S. 160 (1961). Neither holding, however, provides any guidance as to the proper application of S 5.

13executed in compromise of an employee's claims, the Court

has not had occasion to explain how wide a net its ruling casts. Nonetheless, the case law provides us with s ome rough guidelines.

C.

To begin with, Schubert underscores that S 5 of FEL A was designed to prevent employers from making the waive r of claims a quid pro quo of the employment contract. U nlike this case, Schubert dealt with a release that was s igned before the employee was injured, clearly the type o f contractual "shield" FELA was designed to prevent. Nonetheless, Schubert makes clear that Congress int ended to prevent employers from depriving their employees of the right to recover for job-related injuries.

Duncan and Callen are also instructive. In Duncan t he Court began shaping the requirements of S 5, conclu ding that the release was not part of a compromise and settlement. Callen was more specific and explicitly permitted releases "where controversies exist." Of course the release in Callen addressed only a specific inj ury.

Boyd holds that a FELA plaintiff may not waive his fundamental rights under the statute.6 But Boyd re lied on the specific venue provision in S 6 of FELA to supp ort its conclusion that S 5 prohibited a waiver of venue. A s noted, there is no specific section of the statute which a ddresses the rights of FELA plaintiffs to settle their claim s.

___________________________________________________ ______________

6. The Court has held, in the context of the Fair L abor Standards Act, that an employee cannot waive certain statutorily c onferred rights. See Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 704 (19 45) (noting that a "statutory right conferred on a private party, but affecting the public interest, may not be waived or released if such wai ver or release contravenes the statutory policy" and thus the plai ntiffs could not waive minimum or overtime wages or liquidated damages); D .A. Schulte, Inc. v. Gangi, 328 U.S. 108 (1946) (holding that an employe e could not waive his right to liquidated damage, even if the release is made in settlement of a bona fide dispute as to coverage). While it is arguable that this is analogous to an employee waiving his fundamental ri ght to file a FELA claim, making a general release invalid, the Court' s decision in Callen would appear to undercut this reasoning.

14In South Buffalo Ry. Co. v. Ahern, 344 U.S. 367 (19 53),

the Court upheld a provision of the New York Worker s' Compensation Law that effectively allowed an employ ee to waive its FELA rights. Plaintiff had been awarded $ 28 per week under the New York Workers' Compensation Law f or injuries sustained while employed as a switchman. T wo years later, after the employee died -- and his rem edy under FELA had lapsed -- the employer attacked the award on the ground that the Workers' Compensation Board did not have jurisdiction. According to the employer, S 113 of the statute, which granted the Board jurisdiction t o hear claims for injuries "subject to the admiralty or ot her federal laws," was unconstitutional as applied because perm itting the Board to hear claims covered by FELA constitute d a waiver of an employee's FELA rights. The Supreme Co urt disagreed. Noting that S 113 was permissive, and di d not coerce an employee to give up its federal rights, t he Court held that S 113 of the New York Workers' Compensati on Law did not constitute an impermissible waiver unde r S 5 of

FELA.7

The New York statute at issue in Ahern -- allowing waiver of an employee's FELA claims when he or she receive s compensation under the Workers' Compensation Law-- is arguably no different than a private agreement to w aive such claims as part of a settlement between the emp loyee and the employer. But the facts of the case counsel against extracting such a clearly defined rule of law. Unli ke plaintiffs here, who have filed claims unrelated to their previous injuries, the employee in Ahern received b enefits for injuries received in a specific accident only.

___________________________________________________ ______________

7. The Court reviewed another attack on a FELA rele ase in its per curiam decision in Hogue v. Southern R. Co, 390 U.S. 516 ( 1968). The issue in that case was whether a plaintiff who attacks the v alidity of a previously executed release must return the consideration paid for that release prior to commencing his FELA action. While the Cour t did not find it necessary to "decide whether the release here invol ved violated s. 5," it noted that "a rule which required a refund as a pre requisite to institution of suit would be `wholly incongruous wi th the general policy of the Act to give railroad employees a right to re cover just compensation for injuries negligently inflicted by their employe rs.' " Id. at 518 (quoting Dice v. Akron, Canton & Youngstown R. Co., 342 U.S. 359, 362 (1952)).

15Consequently, Ahern is closer to Callen, and while it

supports the notion that releases are not per se in valid under FELA, it does not shed much light on the vali dity of the general releases at issue here. To the extent t here is a key to understanding this question, it may be found in Callen where the court said parties may settle "[w] here

controversies exist as to whether there is liabilit y, and if so

for how much."

D.

Not surprisingly, lower courts that have addressed this issue have disagreed on the proper interpretation o f S 5. Some courts, including the district court here, hav e held that general releases do not contravene the purpose s of FELA and may bar a subsequent claim. See, e.g., Wil son v. CSX Transp., Inc., Civil Action No. 91-1398, slip o p. (W.D. Pa. 1994); Williams v. Norfolk Southern Corp., CA 1 :92-CV545-HTW (N.D. Ga. Jan. 22, 1993); Satterfield v. CS X Transp., Inc., No. 93-002-R (W.D. Va. Dec. 22, 1993 ).

Others have refused to allow a defendant to use a previously executed general release to block a subs equent FELA claim. See, e.g., Babbitt v. Norfolk & Western Ry. Co., 104 F.3d 89 (6th Cir. 1997); Lanham, 1995 WL 368171 (E.D. Pa. June 21, 1995); Manis v. CSX Transp., Inc ., 806 F. Supp. 177 (N.D. Ohio 1992).

As we have noted, the district court here gave grea t weight to the termination of plaintiff's employment

. Because the parties severed and terminated their relationship thus "buying [their] peace," the court reasoned the general release of claims signed by plaintiffs barred any subsequent claims for unrelated injuries.

The contrary view has been set forth by the United States Court of Appeals for the Sixth Circuit in Babbitt, and appears to establish a broad, legal rule prohibitin g the use of general releases in cases such as this. The plai ntiffs in Babbitt were former railroad employees who signed Resignation and Release Agreements as part Norfolk' s Voluntary Separation Program. Subsequently, plainti ffs brought FELA claims for occupational hearing loss, and the district court granted defendant's motion for summa ry

16judgment, finding the releases barred plaintiffs' c laims. The

Sixth Circuit reversed, holding that "[t]o be valid , a release must reflect a bargained-for settlement of a known claim for a specific injury, as contrasted with an attempt to extinguish potential future claims the employee mig ht have arising from the injuries known or unknown by him." 104

F.3d at 93.

Conrail contends that Babbitt is distinguishable on its facts because the releases in Babbitt were part of a "Voluntary Separation Program" which offered early retirement to railroad employees. Rather than the r esult of compromise of claims, the releases were a take-it-o r-leave-it option offered to all employees. By contrast, the r eleases at issue here were all negotiated as part of the settl ement of an existing claim - each was the result of arms-len gth bargaining between the plaintiff, his counsel, and the defendant railroad. No case cited by plaintiffs pro hibiting general releases corresponds to the facts here. In both Lanham, 1995 WL 368171 (E.D. Pa. June 21, 1995), an d Manis, 806 F. Supp. 177 (N.D. Ohio 1992), cited by plaintiffs to support a broad reading of S 5, the c ourts focused on the nature of the releases signed, which were expressly limited to prior injuries and thus were n ot "general" releases of all claims.

III.

To be valid under FELA, a release must at least hav e been executed as part of a negotiation settling a d ispute between the employee and the employer. Schubert and Duncan hold that a release of FELA claims given as a condition of employment, or signed without negotiat ion, is void under S 5. As noted, the holding in Babbitt wa s based in part on the fact that the releases formed part o f a voluntary separation program, and were not the prod uct of negotiations settling a claim. See also Damron v. N orfolk & Western Railway Co., 925 F. Supp. 520, 525 (N.D. Oh io 1995).

It is also clear that an employer may not demand a release against potential claims as a condition of employment. The language of S 5 focuses on whether the

17employer is attempting to evade liability. Schubert

invalidates those releases whose only purpose is to deprive employees of their FELA rights. Schubert, 224 U.S. 603 (1912); see also S. Rep. 460, 60th Cong., 1st Sess. 2-3 (1908); H.R. Rep. 1386, 60th Cong. 1st Sess. 6 (190 8). But as noted, Callen permits an employer and an employe e to negotiate a release of existing claims.

As the district court here noted, and review of the case law confirms, "FELA cases are inherently fact-bound ." Wicker at 18. The evaluation of the parties' intent at the time the agreement was made is an essential element of this inquiry. See, e.g., Lanham, 1995 WL 368171 at *1; Forry, 837 F.2d at 263; Manis, 806 F. Supp. at 179. In Lanham, for example, the court's decision turned on its belief that the release was intended to apply to th e employee's earlier injury only, and could not bar a claim for subsequent injury. Lanham at *1.8 The Forry court also noted that the "meaning to be given to the words of a contract must be the one that carries the intent of the parties as determined by the circumstances under wh ich

the contract was made." 837 F.2d at 263.

Examination of the parties' intent raises the troub lesome question whether a general release in FELA cases is merely an engine by which an employer can evade FELA liabi lity, or represents a rational and considered way to reso lve claims and liabilities. On the one hand, FELA's und erlying goal of allowing liberal recovery might counsel a f inding that a general release of claims permits the employ er to avoid FELA liability altogether and therefore viola tes S 5. But the Supreme Court appears to have rejected this view in Callen, permitting releases which "compromis[e] a claimed liability and to that extent recogniz[e] it s possibility." 332 U.S. at 631. The question remains whether

___________________________________________________ ______________

8. The plaintiffs, attempting to distinguish the La nham decision from the Wilson decision relied on by the district court, ar gue that "the railroad

in Lanham was unsuccessful [at avoiding liability] bec ause of the protection provided by 45 U.S.C. Section 55." Plaintiffs' Brie f at 16. As Conrail points out, however, the Lanham court's analysis tu rned on the specific language of the release and the intent of the parti es, and not on some general prohibition grounded in the language ofS 55 . Consequently, the

Lanham court's reference to 45 U.S.C. S 55 is dictu m.

18there is a way to protect employees' statutory righ ts while

also upholding the parties' right to settle claims by

contract.

A bright line rule like the one set forth in Babbit t, limiting the release to those injuries known to the employee at the time the release is executed, has the benefit of predictability. Under Babbitt, "a release must refl ect a bargained-for-settlement of a known claim for a spe cific injury, as contrasted with an attempt to extinguish potential future claims the employee might have ari sing from injuries known or unknown by him." 104 F.3d at 93.

The Sixth Circuit noted that the releases in Shuber t and Duncan were void because they "granted general immu nity to the railroad as opposed to addressing a specific instance of disputed liability." Id.

Yet, it is entirely conceivable that both employee and employer could fully comprehend future risks and po tential liabilities and, for different reasons, want an imm ediate and permanent settlement. The employer may desire to qu antify and limit its future liabilities and the employee m ay desire an immediate settlement rather than waiting to see if injuries develop in the future. To put it another w ay, the parties may want to settle controversies about pote ntial liability and damages related to known risks even i f there is no present manifestation of injury.

The question still remains whether a rule allowing parties

to release claims related to known risks rather tha n known injuries reflects FELA's remedial goals. We believe it does. We hold that a release does not violate S 5 provide d it is executed for valid consideration as part of a settl ement, and the scope of the release is limited to those risks which are known to the parties at the time the release is sig ned. Claims relating to unknown risks do not constitute "controversies," and may not be waived underS 5 of FELA. See Callen, 332 U.S. at 631. For this reason, a rel ease that spells out the quantity, location and duration of p otential risks to which the employee has been exposed -- for example toxic exposure -- allowing the employee to make a reasoned decision whether to release the employer f rom liability for future injuries of specifically known risks does

not violate S 5 of FELA.

19To the extent that a release chronicles the scope a nd

duration of the known risks, it would supply strong evidence in support of the release defense. But we are wary of making the validity of the release turn on the w riting alone because of the ease in writing detailed boile r plate agreements; draft releases might well include an ex tensive catalog of every chemical and hazard known to railr oad employment. For this reason, we think the written r elease should not be conclusive. We recognize that what is involved is a fact-intensive process, but trial cou rts are competent to make these kinds of determinations. Wh ile the elusiveness of any such determination might cou nsel in favor of a bright-line rule such as the Sixth Circu it adopted in Babbitt, we decline to adopt one here.

Instead, we conclude that a release may be strong, but not conclusive, evidence of the parties' intent. Wh ere a specific known risk or malady is not mentioned in t he release, it would seem difficult for the employer t o show it was known to the employee and that he or she intend ed to release liability for it. Furthermore, where a rele ase merely details a laundry list of diseases or hazards, the employee may attack that release as boiler plate, not reflec ting his or her intent. We recognize that this is a different ( and more difficult) standard for railroad employers than is typical in non-FELA situations, but given the Supreme Court's proemployee construction of the FELA, see Kernaw v. Am erican Dredging Co., 355 U.S. 426, 432 (1958) ("it is clea r that the general congressional intent was to provide liberal recovery for injured workers"); Boyd, 338 U.S. at 265 ("Cong ress wanted Section 5 to have the full effect that its comprehensive phraseology implies.") (internal quot ation omitted), we adopt it.

IV.

Applying this standard, we hold that the releases i n question are invalid under S 5 of FELA. While there is little doubt the parties were involved in settling claims, the question of the parties' intent is more problematic

.

As a general matter, the language of the releases a ppears to recite a standard waiver of liability. Even thou gh there is

20no factual dispute that the agreements were reached during

settlement negotiations, and that plaintiffs were a ll represented by counsel, the releases do not demonst rate the parties understood, let alone addressed or disc ussed, the scope of the claims being waived. For example, the McKee and Weaver releases are short, pro forma waiv ers, and do not indicate the parties negotiated any part of the

releases other than the amount of settlement. At th e other extreme, the releases signed by Wicker and Kleiner are more detailed, blanket releases which attempt to co ver all potential liabilities. But these releases merely re cite a series of generic hazards to which Wicker and Kleiner migh t have been exposed, rather than specific risks the employ ees faced during the course of their employment. Conseq uently, the releases do not demonstrate the employees knew of the actual risks to which they were exposed and from wh ich the employer was being released. Even the Kaltenbru nner release, which contains a special exclusion for cla ims relating to carpal tunnel syndrome, does not recite that plaintiff was aware of and understood the other ris ks to which he was exposed. Consequently, there is no evi dence that any of the plaintiffs, despite being represent ed by counsel, was aware of the potential health risks to which he had been exposed. Therefore, they could not have pr operly

waived these claims.

Conrail contends that even if the releases apply on ly to injuries plaintiffs were aware of at the time they signed the releases, their claims here are still barred becaus e they had knowledge of at least some of their symptoms. Altho ugh plaintiffs testified they were aware of certain sym ptoms when they signed the releases, the record does not demonstrate that they knew that these symptoms were related to their exposure to toxic chemicals at Con rail's plant. To the contrary, plaintiffs testified they d id not connect the symptoms with their chemical exposure u ntil after they had signed the releases, and that they w ere not

aware of the risks associated with the various chem icals used at Conrail's facility. Therefore, the releases could not have settled claims with respect to those risks, an d cannot bar plaintiffs' claims.

As noted, we hold that S 5 of FELA allows an employ er to negotiate a release of claims with an employee prov ided the

21release is limited to those risks which are known b y the

parties at the time the release is negotiated. In t he case before us, we find the releases signed by the parti es violate S 5 because they purport to settle all claims regar dless whether the parties knew of the potential risks. Be cause the releases cannot bar plaintiffs' FELA claims, we will reverse the judgment of the district court and rema nd for proceedings consistent with this opinion.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

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