Kentucky Supreme Court Underscores The Value Of Release Agreements
Last week in Humana, Inv. v. Blose, the Kentucky Supreme Court clarified that a valid release of claims operates to bar those claims, not merely provide the basis for a counterclaim.
Last week in Humana, Inv. v. Blose, the Kentucky Supreme Court clarified that a valid release of claims operates to bar those claims, not merely provide the basis for a counterclaim. The plaintiff, Blose, was terminated from her employment with Humana. As part of a severance package Blose signed a release of claims, including statutory discrimination claims. Three years later Blose filed a disability discrimination lawsuit against Humana. Upon Humana’s motion, the trial court dismissed Blose’s suit on the basis of her release of claims. On appeal, however, the Court of Appeals held that Blose’s release would not bar her suit, but instead Humana could file a counterclaim for damages caused as a result of the breach, i.e. the filing of the suit. Of course that is not why Humana wanted the release. The value of a release is in not having to go through a lawsuit in the first place. Thankfully last week the Kentucky Supreme Court reversed the Court of Appeals and held that the proper remedy for a breach of a release is dismissal of the improperly filed lawsuit.
To read this opinion, click here: http://opinions.kycourts.net/SC/2006-SC-000783-DG.pdf
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Deborah S. Adams is a member of Frost Brown Todd LLC and practices in the labor and employment law practice group. She represents management in the areas of employment discrimination and wrongful discharge.