CHARLESTON – The West Virginia Supreme Court has overturned a ruling in Kanawha Circuit Court that said a retired railroad worker released his employer from liability when he took early retirement.
Ohio Circuit Judge Arthur Recht in 2007 granted summary judgment to Norfolk Southern Railway Company in a lawsuit brought on by Freda Marlene Ratliff, whose husband Sparrell Ratliff died shortly after being diagnosed with mesothelioma.
Sparrell's diagnosis came some 19 years after he accepted an early retirement package from Norfolk Southern after 40 years with the company and a predecessor, Norfolk & Western Railway Company.
Sparrell started working for the railroad in 1947 at the age of 23. He eventually became a locomotive engineer, court records say.
The company offered the early retirement packages as a way to reduce employment costs in the mid-1980s.
After her husband's death in July 2005, Freda filed an action against Norfolk Southern to recover damages under the Federal Employer's Liability Act.
The company argued that the early retirement agreement Sparrell signed in 1986 contained language that exempted it from any future employment-related claims Sparrell might bring, like under the FELA.
But the West Virginia justices, in a unanimous decision, ruled that an early retirement agreement does not exempt a company from future liability.
In its opinion, written by Justice Robin Jean Davis, the court cited two specific federal cases that involved FELA.
One of the cases – Babbitt v. Norfolk & Western Company – involved several former rail employees who agreed to an early retirement from the company, but later sued under FELA to recover damages for hearing loss.
The other case – Wicker v. Consolidated Rail Corporation – involved five former rail employees who had taken early retirement during the course of settling one FELA claim before filing another later.
In the Babbitt case, the federal court ruled that a release is only valid under FELA if it relates to a specific injury. In the Wicker case, the court ruled that the workers realized the risks involved in railroad work.
In an amicus brief filed by the Association of American Railroads in the Ratliff appeal, the association urged the justices to follow the logic in the Wicker case. The association said that under the reasoning in the Babbitt case, railroads wouldn't be able to "buy their peace" with employees through settlement and release of FELA claims.
The association said releases are becoming more important to the industry as it sees a rise in FELA claims for occupational diseases.
"General releases play an important role in the settlement of these claims," the brief says. "Many occupational diseases are characterized by long latency periods and typically cannot be tied to a specific accident or event. It often is in the interest of both employer and employee to settle any and all occupational disease claims when a settlement is entered into, even if it is not obvious at the time that the employee will ever manifest a released condition.
"The employee bargains for more money up front, to compensate for illness which may or may not occur in the future; the railroad, knowing it has satisfied its obligation to the employee, buys its peace. Having done so, should a condition allegedly caused by past exposure to some agent in the workplace become manifest years later, neither party will need to be concerned about addressing the claim in a lawsuit, and producing evidence, many years after the fact."
The justices disagreed. They said the Ratliff circumstances were more similar to the facts in the Babbitt case.
"A Wicker-type employee is involved in negotiating a FELA claim and, therefore, meets the requirement ... that a controversy exists," Davis wrote. "Under this circumstance, a release does not violate (FELA) so long as the risk released was one known to the parties and was a risk the employee intended to release.
"A Babbitt-type employee, on the other hand, is not negotiating the settlement of a claim. A Babbitt employee has merely agreed to a voluntary end to his or her employment. Unlike an employee who is negotiating a FELA claim, an employee who is participating in a voluntary separation program is not engaged in a controversy as to liability ..."
Using that logic, the justices ruled that the early retirement agreement Sparrell signed in 1986 did not exempt the company from future FELA claims. The case was reversed and remanded to Kanawha Circuit Court.
State Supreme Court case number: 34156