IS YOUR SETTLEMENT GOING TO PROTECT YOU AGAINST SUBSEQUENT CLAIMS? YOUR JOINT EMPLOYER, STAFFING COMPANY, PAYROLL COMPANY, PEO OR OTHER VENDOR/PARTNERS MAY BE SUBJECT TO CLAIMS AND THEN YOU MAY LATER BE FIGHTING INDEMNITY AND BREACH OF CONTRACT CLAIMS FROM THEM

IS YOUR SETTLEMENT GOING TO PROTECT YOU AGAINST SUBSEQUENT CLAIMS?  YOUR JOINT EMPLOYER, STAFFING COMPANY, PAYROLL COMPANY, PEO OR OTHER VENDOR/PARTNERS MAY BE SUBJECT TO CLAIMS AND THEN YOU MAY LATER BE FIGHTING INDEMNITY AND BREACH OF CONTRACT CLAIMS FROM THEM

Scenario:  an employer settles claims by an employee.  The employer believes that even with a waiver of all claims, the matter is behind them.  But, there are circumstances when an employee goes on to sue others, such as the employer’s staffing company, the franchisor or another company that plays a part in the employer’s management or employment affairs.  The case of Lynn Grande v Eisenhower Medical Center is one of those circumstances.

All of Epps & Coulson, LLP’s healthcare clients should especially pay attention:  a nurse settled class action claims against a nursing staffing agency for work done at the staffing company’s client, Eisenhower Medical Center.  But after settlement with the staffing company, the nurse then sued Eisenhower Medical Center (“EMC”) in a new class action.  While EMC tried to get the matter dismissed because of the settlement of the prior class action against the staffing company, the Court wasn’t having any of it and allowed the new lawsuit against EMC to proceed.

Why?  Because EMC was not a party in the first lawsuit and was not released in the settlement.  Specifically, EMC and the staffing company had different legal interests.  So, two different businesses may in the end be liable to employees for the same related claims.  And, the staffing company contract may require it to defend and indemnify its client, EMC – or there may be equitable or other indemnity claims that EMC may later bring against the staffing company.  Vice Versa, the same is true: if EMC might have been sued and settled first, it may be in the position of the staffing company looking to it for indemnity or breach of contract.

How could this have been avoided?  Answer:  a carefully worded settlement agreement that includes (sometimes specifically by name, if possible) all/anyone involved in the employment of employees.  Here at Epps & Coulson, LLP, we are on top of these ever-evolving employment matters.  Please contact Dawn at: dcoulson@eppscoulson.com if you have any questions.

Information contained in this Memo is intended for informational and educational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.  It is likely considered advertising.  Epps & Coulson, LLP encourages you to call to discuss these matters as they apply to you or your business.

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