In theory, we should never sign anything without reading and understanding its contents. In practice, we are presented with sprawling documents and agreements stuffed with legal jargon that can baffle the best of us on at least a weekly basis.
Our instinct is to sign these things, maybe after skimming and asking a question or two, and get on with our lives. However, as an ERISA claimant recently learned, certain agreements require exhaustive inspection.
In Schuyler v. Sun Life Assurance Co. of Can., a promising ERISA denial appeal was cut short when the plaintiff signed an employment separation agreement, including compensation, without carefully reviewing its contents.
The plaintiff’s initial application for long-term benefits was denied after she stopped working due to lasting symptoms from a traumatic brain injury sustained years earlier. Sun Life’s denial argued that the plaintiff’s symptoms were not severe enough to prevent her from performing the duties of her own occupation as defined by her benefits plan. The plaintiff submitted an administrative appeal.
While the appeal was under review, the plaintiff’s employer presented her with a separation agreement, including a compensation payment of $25,000. The plaintiff asked her employer if signing the agreement would affect her appeal. Her employer allegedly replied that her appeal would be unaffected. But had the plaintiff read or had a lawyer review the entire agreement, she would have encountered the following section:
“Employee of her…own free will, voluntarily releases…any and all known and unknown actions…arising out of or limited to, any alleged violation of…the Employee Retirement Income Security Act of 1974 (‘ERISA’).”
Acting on the alleged verbal reassurance from her employer did not legally excuse the plaintiff from signing away her right to bring a civil suit against Sun Life, estimated to be worth $1.2 million, or her employer. The court ruled against the plaintiff, ending her appeal.
Unfortunately, contemporary life includes a ceaseless bombardment of end-user agreements, privacy statements, liability waivers, legal declarations, and even absurdly long purchase agreements every time we order something as trivial as printer ink online. We’ve gotten into the bad habit of disregarding the contents of these declarations simply because there aren’t enough hours in the day for a line-by-line understanding of every book-length legal document that crosses our eyes.
Hastily signing unread documents rarely ends with regrettable consequences, reinforcing this bad habit. But knowing when to stop, take a breath, and thoroughly review documents adjacent to an ongoing legal dispute can mean the difference between $25,000 and $1.2 million.