Practice Tip: When seeking to have the claimant sign a Resignation Agreement or General Release, it must now be included in the Section 32 agreement. You need to consider whether its inclusion might jeopardize approval of the Section 32.
When settling workers’ compensation claims by a Section 32 agreement, some employers have also required the claimant to sign a Resignation Agreement and/or a General Release of Liability. This has been a separate agreement outside of the four corners of the Section 32 settlement agreement.
The Workers’ Compensation Board has now issued guidance indicating that it will disapprove a Section 32 agreement if it becomes aware that as a condition of entering into the settlement agreement, the parties entered into a separate agreement which terms are not included in the agreement submitted to the Workers’ Compensation Board.
The Board indicates that in order to determine whether an agreement is unfair, unconscionable or improper as a matter of law, it must be aware of and review all of the terms of the settlement agreement. The Board notes that a provision calling for a general release to all claims will be given significant scrutiny because of the disparity in bargaining power and financial resources between the claimant and the carriers and employers.
As part of this new process, beginning on December 6, 2021, all Section 32 Waiver Agreements submitted to the Board must be accompanied by an Affirmation or Affidavit executed by the person who signs the agreement on behalf of the carrier and employer that the agreement submitted to the Board contains all other terms and agreements between the parties and there is no separate agreement that exists.
Employers or carriers who seek to include a Resignation Agreement or General Release of Liability must now either exclude these from the settlement process or include them in the agreement, and risk disapproval of the Section 32 settlement.
If you have any questions about this or any other issue, contact Donald R. Gitto at dgitto@gittolaw.com or (607) 723-0600 or any of the attorneys in our office. If you would like a training session on this or any area of the Workers’ Compensation Law, please do not hesitate to contact our firm.
This information is provided for general guidance only. This information should not be used as a substitute for consultation with legal counsel. Each case presents unique facts requiring individual analysis.
