Latest / FLG Disability Insights / Signing an Employment Release? Protect Your Disability Claim
Transcript
- You sign a settlement with your employer. Does that automatically end your fight for disability benefits? In one recent federal case, the answer was no. But the reason matters. Welcome to FLG Disability Insights. I’m Nick Feden of Feden Law Group. Here’s the case—and what you can take from it. Cude versus Lincoln National Life Insurance Company involved a short-term disability claim under a Wells Fargo plan. Lincoln administered the claim. Cude applied in June twenty twenty-three. Lincoln denied it that September, and he appealed the same day. While that appeal was still pending, Cude signed an employment settlement with a general release. Lincoln later upheld the disability denial, in February twenty twenty-four. The plan then argued that the release blocked his ERISA benefits lawsuit. Its position was that his claim had already accrued when Lincoln first denied benefits, before the settlement was signed. On October ninth, twenty twenty-six, a federal court in the Central District of California rejected that defense. Two things drove the result: timing and wording. First, this plan required Cude to finish its claims and appeals process before suing. Applying the cited Ninth Circuit authority, the court found that this particular benefits claim accrued no earlier than the final appeal denial. That happened after he signed the release. Second, the release covered claims based on actions or events occurring before it was signed. Under California law, the court read that backward-looking language against the actual timeline. On these facts, it did not reach the benefits claim. So Cude kept his right to pursue the case. He did not receive a benefits award from this ruling. The court removed the release and waiver defense. Whether he was entitled to disability benefits remained unresolved. Here’s the practical point. If you’re negotiating an employment settlement while appealing a disability denial, put the two files together. The release. The plan. The initial denial. The appeal. And any final decision. Those documents tell the story. A broad settlement clause deserves a close read, even when you’re focused on resolving a separate workplace dispute. And don’t turn this decision into a universal rule. Different language, different plan terms, or different governing law can change the result. A pending appeal does not automatically protect every benefits claim from every release. Feden Law Group helps people challenge disability denials and navigate ERISA appeals and federal litigation. If a settlement overlaps with your claim, contact us to discuss the documents and your options. Visit FedenLawGroup dot com and try FLG Case Analyst Beta. Get a full report generated by an attorney-trained, cutting-edge AI model, then connect with our firm about your next step. This is general information, not legal advice. I’m Nick Feden. Thanks for listening to FLG Disability Insights.