Why do I have to resign if I settle my workers compensation case?

One of the hard ‘facts’ of a Pennsylvania workers’ compensation settlement is the ‘requirement’ to resign from employment to accept a settlement.  Is it a requirement under the Pennsylvania Workers’ Compensation Act?  No.  It is usually a requirement of the workers’ compensation insurance carrier and/or the employer.

Pennsylvania workers’ compensation settlements are done by Compromise and Release Agreements.  They are negotiated with the insurance carrier and employer.  They value each case differently based on a multitude of factors.  You can read about those factors here.

One element the insurance carrier almost always insists upon is the resignation of the injured worker.  In my practice experience, it has been required over 95% of the time.  Furthermore, the resignation letters have been upheld by Pennsylvania Courts as enforceable.  So what are the motivating factors of requiring a resignation to settle a workers’ compensation case?

          • Confidentiality.  Many times a resignation is required due to the carrier or employer wanting the terms of settlement to remain confidential.  Employers do not want other employees to know about the settlement or how much was paid.  It could be a motivating factor for other employees.  At least they think so.
          • Concept.  Employers may require resignations based on the concept of providing a lump sum amount of money to the injured worker.  In other words, if they are going to give the injured worker a lump sum payment, then they do not want the injured worker to return and remain on payroll.
          • Liability.  Particularly from the insurance carrier’s perspective, they do not want potential liability for the injured worker returning to work and reinjuring themselves after paying out a lump sum amount of money.  They want complete closure on your work injury and want no future liability exposure.
          • Moving on.  Some employers want the resignation because they are ready to move on.  Perhaps the litigation caused hard feelings between the injured worker and the employer.  Maybe the employer already replaced the injured worker’s position.  Maybe the employer is downsizing.  Maybe the employer simply does not want the injured worker back

Regardless of the reasons, it is almost a certainty that if you choose to settle your workers’ compensation case in Pennsylvania, it will result in your resignation of employment.  There may be a few exceptions, but they are rare.  Many times my client just have a difficult time understanding why they have to give up their job to settle their case.  The simple answer is that you can’t be forced to resign, but the insurance carrier also can’t be forced to settle your case.  And often times without a resignation, they will not settle a case. It is an unfortunate reality in Pennsylvania workers compensation.  You can read more about Pennsylvania workers’ compensation settlements here.

One final note — do not settle your case without talking to an experienced workers’ compensation attorney.  The insurance carrier will always try and undervalue your case.  If you have been injured at work, call Mooney Law right away for an absolutely free consultation.  Let’s talk about what the value of your case may be.  Call today at 877-MOONEYLAW  or 717-200-HELP.

Mark Buterbaugh

Attorney representing injured workers and Social Security Disability clients in Pennsylvania and Maryland.