General Releases in Workers' Compensation Claims

General Releases in Workers' Compensation Claims

Posted By Douglas F. Kaleita, P.C. || 13-Nov-2013

General Releases are another matter altogether. In the majority of claims that are settled, the defense attorney will send over a release with varying language depending upon the attorney and the defense firm, but all variations upon a common theme, ergo, a release of all manner of claims that could ever possibly have arisen from the employment relationship. Of course, most of these potential claims have nothing to do with the Workers' Compensation claim, and are not the proper subject of the settlement. These overreaching General Releases are not authorized under the Workers' Compensation statutes or Board Rules. In fact, Board Rule 15 specifically provides in subsection (g) that "[s]tipulations which contain waivers or releases of causes of action over which the Board has no jurisdiction will not be approved by the Board." Defense attorneys seek to get around this by drafting and sending a separate General Release that will not be filed with the State Board, but will instead simply be retained by defense counsel or his client.

Of course, defense attorneys are simply trying to zealously protect their clients - the pre-injury employers and their insurers - from other claims. The problem for the Employee/Claimant's attorney is that he was usually not retained to represent the injured worker in any other claims, and he may not have any expertise in handling such other claims, or knowledge of what such claims the employee may have.

There are arguments that can be made that such releases are not enforceable, depending upon the particular language employed. For example, such releases may not be supported by separate consideration, independent of the Workers' Compensation settlement. On this point, the practitioner must be particularly wary of the release which contains a statement that the amount paid in settlement of the Workers' Compensation claim is also consideration for the release, insofar as this could have unintended tax consequences for the Employee/Claimant.

There are different approaches to this dilemma. One approach is to refuse to allow the Employee/Claimant to sign a General Release. However, some defense attorneys - and some Employer/Insurers - will not agree to go forward with a settlement without the injured worker signing a General Release. And, of course, the Employer/Insurer cannot be forced to settle a claim. It could be unacceptable to a client who wants to move on with his life, who has a good settlement offer that he wants to take, to forego the settlement over a release of claims that he may not have, which release may not even be enforceable.

Another solution is to advise the client to consult with other attorneys regarding the particular claims purportedly being released. This can be an impractical solution for the injured worker who has been living without money or living on a TTD check for two years. However, this could avoid potential exposure for professional liability if the release is signed and it turns out that the Employee/Claimant did, in fact, have other claims that were released.

There is no easy solution to this problem. As a practical matter, many attorneys representing Employee/Claimants will review the release language and cross out or otherwise revise the more egregious language in the release, with or without discussion with defense counsel, and then discuss the matter with the client, providing appropriate disclaimers to the effect that the particular attorney does not handle the claims at issue, and advising the clients that they can and should consult with other practitioners if they have additional questions about particular potential claims. In such circumstances, it is probably wise to add language documenting these points to the final disbursement statement that the client signs.

For assistance reviewing and adjusting the language of the General Release in your workers' comp case, contact Douglas F. Kaleita, P.C. today.

Categories: Workers' Compensation