Court rules Sun Life cannot use severance agreement to block disability benefits claim

NORTHRIDGE, Calif., Aug. 26, 2025 /PRNewswire/ -- Kantor & Kantor, LLP announced a significant appellate victory in the U.S. Court of Appeals for the Second Circuit on behalf of client Kristen Schuyler, who is challenging Sun Life Assurance Company of Canada's denial of her long-term disability benefits. The appellate court vacated the lower court's ruling, finding that Schuyler did not knowingly or voluntarily waive her rights under the Employee Retirement Income Security Act (ERISA) when she signed a separation agreement with her former employer.

The case stems from Schuyler's traumatic brain injury in 2015, which left her with lasting cognitive and physical impairments. After Sun Life denied her disability claim, Schuyler left her job at Benco Dental Supply Company and entered into a severance agreement. Benco assured her the agreement would not affect her right to pursue her claim against Sun Life. Nonetheless, Sun Life argued that the agreement released her claims and obtained summary judgment in the district court.

In a precedent-setting decision, the Second Circuit sided with Schuyler, emphasizing that ERISA waivers require "particularly close judicial scrutiny." The court concluded that based on the communications between Benco and Schuyler, and the circumstances surrounding the agreement, her waiver of ERISA rights could not be considered knowing and voluntary.

"This ruling is a powerful reminder that disability insurers cannot hide behind technicalities or exploit confusing contract language to escape their obligations," said Glenn R. Kantor, founding partner of Kantor & Kantor, who argued the case with co-counsel. "It ensures that individuals like Ms. Schuyler have their day in court when insurers wrongfully deny legitimate claims."

The decision not only reopens Schuyler's case but also strengthens protections for workers nationwide who face similar tactics by insurers.

About Kantor & Kantor, LLP

Kantor & Kantor is one of the largest law firms in the country exclusively representing plaintiffs in insurance benefit claims. Based in Northridge, California, the firm has won landmark cases under ERISA and private insurance law, helping thousands of individuals secure the benefits they deserve.

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SOURCE Kantor & Kantor, LLP