When an employer presents a separation agreement and release to an employee out of work for medical reasons, questions sometimes arise regarding that person’s ability to understand and competently execute the document. If an employee presents information indicating that they suffer from cognitive or other issues associated with their medical condition, the employer may want to wait until these issues are resolved before seeking a legally binding release. However, a new decision from the Second Circuit Court of Appeals shows that courts will not assume such incapacity absent clear medical evidence.
In Pucilowski v. Spotify USA, Inc., the plaintiff suffered a panic attack at work, resulting in her losing consciousness, hitting her head, and experiencing a concussion. Her doctor released her to work intermittently from home, but she needed to take an additional leave due to the underlying mental issues. Upon return from this leave, the employer presented her with a separation agreement, paying her severance in return for a release of claims. She signed the release but later sued, alleging that Spotify took advantage of her condition, and that she lacked the capacity to understand the agreement due to her concussion.
The Second Circuit rejected these arguments, affirming dismissal of the claim based on the signed release. The court noted that the plaintiff’s doctor stated that she had largely recovered from the concussion a month before she was presented with the release. The court noted the absence of any evidence that the plaintiff was cognitively impaired, or that she lacked the education or experience necessary to understand the document.
Absent clear evidence of an impairment or inability to understand the meaning of a release document, courts are hesitant to overturn them, especially where the plaintiff’s main complaint appears to involve dissatisfaction with the payments contained in the agreement. If an employee presented with a separation agreement claims such medical issues, the employer should take steps to review the situation before relying on the validity of the signed document.