• New Requirements For Settlement Agreements

    There are many occasions where good faith disputes require a compromise resolution. The primary format for such resolution is commonly referred to as the “Section 15” agreement.

    IC 22-3-2-15 is the statutory authority for such an agreement.  Section 15 requires that such an agreement be approved by a member of the Worker’s Compensation Board and that such member should not approve an agreement which is not in accordance with the rights of the parties pursuant to the Worker’s Compensation Act.

    New Requirements For Settlement AgreementsThe Section 15 settlement process can be abused when it forecloses the legitimate non-disputed rights of an employee, where the consideration is inadequate, or where other unrelated employee rights are adversely affected. The Worker’s Compensation Board has created a checklist for settlements. The checklist is posted on the Board’s website.

    Compliance with the checklist will make the preparation of Section 15 and other settlement agreements more time-consuming. But, the additional information required by the checklist will give to the Board member an accurate basis upon which to consider and approve the settlement. Section 15 agreements with unrepresented employees will require compelling evidence of the dispute and the adequacy of the money to be paid. A Section 15 agreement should give consideration to the length of time within which the claim may be reopened and the likelihood and value of the additional benefits which may be due within that time. Section 15 settlements in otherwise compensable claims will be closely scrutinized.

    In addition to the checklist, the Board has identified several areas which are NOT appropriate for inclusion in a Section 15 or other settlement agreement:

    1. Confidentiality clause which requires a forfeiture of the settlement payment in the event of a violation.
    2. Blanket release of any and all claims or release of rights other than those related to the worker’s compensation claim.
    3. Employee resignation as a condition of the settlement.
    4. Waiver of the statutory right to reopen the claim where the claim was otherwise compensable and statutory benefits are being paid pursuant to the settlement agreement.

    The Board is also working on a procedure whereby settlement agreements and orders in litigated cases will be electronically transmitted to the appropriate hearing member for review and approval. Settlements in non-litigated claims will be electronically transmitted to an “Accident Files” mailbox for handling. The effective date for this approval process will be announced by the Board in the future.

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