Key Takeaways
- Signing a severance agreement may waive your right to pursue ERISA disability benefits, even if your medical condition continues.
- A valid release can bar future disability claims if it clearly includes ERISA claims and meets legal standards for enforceability.
- This case highlights why legal review is critical before signing any employment separation document.
Background: Disability Benefits Denied After Severance Release
Ms. Alexis Clyburn, a long-time employee of Brother International Corporation, became disabled and filed a claim for short-term disability (STD) benefits under a policy administered by Lincoln National Life Insurance Company. Because the coverage was provided through her employer, it was governed by the Employee Retirement Income Security Act (ERISA).
Lincoln initially approved benefits but stopped payments as of January 3, 2024. Ms. Clyburn appealed the decision, but her appeal was denied.
Shortly after, on February 11, 2024, she signed a severance agreement with Brother International. That agreement included a clause waiving and releasing all ERISA claims.
When Ms. Clyburn later filed a lawsuit to recover unpaid STD benefits, Lincoln moved for summary judgment, arguing that she had already waived her right to bring the claim.
Court Finds Waiver of ERISA Claims Valid and Enforceable
The New Jersey federal district court agreed with Lincoln and dismissed Ms. Clyburn’s case, finding that her severance agreement was a valid waiver of ERISA claims.
The Court Applied the “Totality of the Circumstances” Test
To evaluate whether the waiver was legally enforceable, the court looked at several factors:
- Clear and specific release language – The waiver explicitly included ERISA claims.
- Work and business experience – Ms. Clyburn had several years of professional experience.
- Time to review – She had 10 days to review the agreement.
- Legal counsel option – The agreement advised her to consult a lawyer before signing.
- Consideration given – She received meaningful consideration, including the waiver of a repayment obligation for prior disability benefits.
Based on these factors, the court held that Ms. Clyburn knowingly and voluntarily waived her right to bring an ERISA claim. Her case was dismissed.
Why This Matters: Understand Severance Agreements Before You Sign
Employers often present severance agreements to employees leaving due to illness, injury, or disability. These documents may seem routine but often contain broad waivers of legal rights, including the right to collect disability benefits under an ERISA-governed plan.
What You Need to Know:
- If you’re pursuing short-term or long-term disability benefits, signing a severance agreement without legal review could jeopardize your claim.
- A release may include language that bars lawsuits or appeals under federal law, including ERISA.
- Insurance companies, like Lincoln, may use severance waivers as a complete defense to avoid paying benefits.
ERISA Disability Lawyers Who Protect Your Rights Nationwide
At Dabdoub Law Firm, we focus exclusively on disability and life insurance law, including ERISA claims. We have represented clients in similar cases across the country and know how to protect your rights—before and after you sign any agreement.
Why Choose Dabdoub Law Firm?
- Nationwide representation in ERISA disability claims
- Fought every major insurance company, including Lincoln
- Proven record of winning in federal court
- A litigation powerhouse for complex disability insurance cases
- Recovered millions of dollars for disabled professionals
Don’t Let a Severance Agreement Cost You Your Disability Benefits
If you’re negotiating a separation from your job or facing a denied short-term or long-term disability claim, you need legal guidance. The disability insurance lawyers at Dabdoub Law Firm can:
- Review your severance agreement for harmful language
- Appeal a wrongful denial of disability benefits
- Litigate ERISA claims in federal court
- Pursue a lump-sum settlement for your denied claim
Call Today for a Free Consultation
You don’t have to fight your insurance company alone. We don’t get paid unless you do. Contact Dabdoub Law Firm to speak with an experienced ERISA disability attorney.