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WCAB Rules Compromise and Release Can Waive Supplemental Job Displacement Voucher When There Is Good Faith Dispute On AOE/COE
By Lonce LaMon - October 5, 2016

A workers’ compensation judge approved a C&R in Pomona, California on May 16th 2016, but added language that the “Parties may not settle or commute Supplemental Job Displacement Voucher…”   This in essence stopped State Compensation Insurance Fund on behalf of their insured, Structural Steel Fabricators, and applicant Juan Pablo Beltran from really settling the case including the Supplemental Job Displacement Benefit voucher- which made it a kind of oxymoron.

State Fund responded by asserting the workers’ compensation judge exceeded her authority by modifying the terms of the parties’ Compromise and Release Agreement without the agreement of the parties.   State Fund argued that in a denied claim, the parties are permitted to settle the Supplemental Job Displacement Benefit voucher where a good faith dispute exists which could potentially defeat the applicant’s entitlement to all workers’ compensation benefits.

State Fund responded in their Petition for Reconsideration with the argument that where there is a good faith dispute, an applicant may settle his claim by a Compromise and Release Agreement that includes the settling of his potential right to the Supplemental Job Displacement Benefits voucher. 

In the case at hand, the applicant, Juan Pablo Beltran, filed an Application of Adjudication of Claim on November 17th 2014 alleging cumulative trauma injury to his head and back due to repetitive heavy work from October 20th 2013 to October 20th 2014.  He had been employed as a laborer by Structural Steel Fabricators.   State Fund denied his claim based upon the affirmative defense that Beltran did not report the injury prior to his termination, which was for cause.

The parties had submitted a walk through Compromise and Release Agreement for $12,500 which included Beltran’s potential entitlement to a Supplemental Job Displacement Benefit (SJDB) voucher.   State Fund contended that the claimant was not entitled to a SJDB because he suffered no injuries as a result of his employment with Structural Steel, had failed to report any injury while employed, and began working immediately after termination for another employer.  Consequently, there were no periods of temporary disability. 

The workers’ compensation judge had suspended action on the settlement agreement and set the matter for trial.   She noted that the parties cannot settle or commute the Supplemental Job Displacement Benefit voucher.   When State Fund would not agree, that’s when the judge approved the Compromise and Release with the additional language. 

The decision after accepted reconsideration, made by the Panel of Deidra Lowe, Jose Razo and Frank Brass in San Francisco, on August 3rd 2016, ordered the Compromise and Release be amended to recognize a good faith dispute existed as to injury AOE/COE and/or liability for injury which could, if resolved against the applicant, defeat Beltran’s right to recover benefits. An order was issued approving the parties’ Compromise and Release as presented.

The Board cited the history from the vocational rehabilitation years, which ended in 2004, to the retraining and educational voucher period from 2004 to 2012 and extending post SB 863 to date.  They recognized that State Fund was arguing that where there is a good faith dispute as to the compensability of a claim of injury, the parties should be permitted to settle claimant’s alleged entitlement to the Supplemental Job Displacement Benefit voucher, analogizing the situation which existed with respect to the settlement of vocational rehabilitation benefits that was addressed in Thomas vs. Sports Chalet (1977).  In this case, the parties settled by a Compromise and Release which contained provisions that vocational rehabilitation rights were settled. 

The Appeals Board historically relied upon the policy favoring settlement of disputed cases.  Noting that an injured workers’ entitlement to vocational rehabilitation benefits only exists where an employer’s liability to provide the benefit is not in dispute, the Board conditioned approval of the settlement of vocational rehabilitation benefits on the existence of legitimate doubts over an employer’s liability for any benefit. 

The prohibition against settlement of the Supplemental Job Displacement Benefit voucher was found by the Board to be analogous to the prohibition against settlement of vocational rehabilitation benefits, which Thomas held could be resolved in a Compromise and Release agreement only when a serious and good faith issue exists which if resolved against the applicant would defeat all right to compensation.    Here an injured worker’s entitlement to the Supplemental Job Displacement Benefit voucher was conditioned upon the acceptance of liability for an industrial injury by the employer and the existence of permanent partial disability, or a determination of these issues after trial.  Where an employer denies liability and raises an affirmative defense that could potentially defeat all right to compensation, a prohibition on settlement of the Supplemental Job Displacement Benefit voucher would require a trial to determine injury and the existence of permanent partial disability in every case. 

Thus, the decision was made that, as in Thomas, where the trier of fact makes an express finding based upon the record that a serious and good faith issue exists to justify a release, a Compromise and Release agreement may be approved by the Board which will relieve the employer from liability for the Supplemental Job Displacement Benefit voucher.  



Journalist Lonce LaMon,; copyright written journalism; all rights reserved Lonce LaMon and adjustercom.  


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