Short Term Disability Benefits Creates Enforceable Contract

January 5, 2022.  The PA Superior Court issued its ruling that an insurance company’s short term disability benefits create an enforceable contract under Pennsylvania law in Barbara Evans v. Capital Blue Cross (410 MDA 2021).  This case was on appeal from an order entered March 15, 2021, in the Court of Common Pleas of Dauphin County, Pennsylvania (No. 17-CV-6696).

The three-judge panel overturned the trial court’s ruling with their unanimous opinion authored by Judge John T. Bender.  Judge Bender wrote, “We agree with Ms. Evans that the terms and conditions of the SPD constituted a unilateral offer of employment, which she accepted by continuing the performance of her duties.”  He continued, “a reasonable person in Ms. Evans’s position would understand that her continued performance would entitle her to benefits under the Program if she met its requirements.”  The Court reversed and remanded based on their finding that the insurance company’s short term benefits created an enforceable contract.

Tybe Brett, Of Counsel with Feinstein Doyle Payne & Kravec, LLC, along with Marc H. Snyder of Rosen Moss Snyder LLP represent the Appellant, Barbara Evans.  In an interview with Law360 (January 5, 2022.  Santoni, Matthew) Ms. Brett reiterated that “the ruling gives courts a means to enforce short-term disability benefits under state law, since those programs aren’t governed by the Employee Retirement Income Security Act.”  Because the Court concluded that the employer was contractually obligated to provide the plaintiff with short-term disability benefits to the extent that she met the terms and conditions of the program, she was also entitled to pursue her claim under Pennsylvania’s Wage Payment and Collection Law.

To review the complete Opinion, click here:  Evans Opinion

Posted by Tybe A. Brett, Of Counsel.