The purpose of this bulletin is to clarify and expand upon the Board’s October 8, 2021 bulletin. In the October 8, 2021 bulletin, the Board indicated that it had become aware that some insurance carriers/self-insured employers and their representatives had, as a condition of entering into a Section 32 Waiver Agreement, insisted that claimants execute a separate general release of liability, the terms of which were not included in the agreement submitted to the Board for approval.
The bulletin made clear that all Section 32 Waiver Agreements were required to contain all the terms and conditions agreed to between the parties as a condition of settling a workers’ compensation claim, and that the Board would disapprove a waiver agreement if it became aware that as a condition of entering into the waiver agreement, the parties entered into a separate agreement or contract that contained terms which were not included in the agreement submitted to the Board for approval.
The bulletin further mandated that beginning on December 6, 2021, all waiver agreements submitted to the Board for approval be accompanied by a Carrier’s/Self-Insured Employer’s Affirmation (Form C-32AF), executed by the person who signed the agreement on behalf of the insurance carrier/self-insured employer, affirming that the agreement contained all the terms and conditions agreed to by and between the claimant and the insurance carrier/self-insured employer.
The October 8, 2021 bulletin also stated:
- Moreover, although a provision in a Section 32 Waiver Agreement whereby the claimant provides a general release to all claims against the carrier/self-insured employer in any forum or jurisdiction is not per se invalid, because of the disparity in bargaining power and financial resources between individual claimants and insurance carriers/self-insured employers, such terms will be given significant scrutiny by the Board.
- Based on the circumstances of the particular claim, the terms may be found to be unfair, unconscionable, improper as a matter of law, or the result of an intentional misrepresentation of material fact, resulting in the disapproval of the agreement.
Release of Related Claims
It is generally permissible and appropriate to resolve claims or potential claims in other forums, which are outside of the Board’s jurisdiction, as part of a Section 32 Waiver Agreement when those other claims arise out of the same nucleus of operative facts as the claim for workers’ compensation benefits that is being settled. For instance, the circumstance surrounding a workers’ compensation claim for mental injuries caused by workplace stress might also serve as the basis of a civil rights claim. A Section 32 Waiver Agreement may include a general release whereby the claimant agrees to waive all claims arising out of the same nucleus of operative facts of the workers’ compensation claim being settled. The agreement must, however, delineate what consideration is being paid in exchange for the general release or waiver of a specific claim arising out of the same nucleus of operative facts of the workers’ compensation claim, which is separate from the consideration paid to the claimant for waiving their right to ongoing workers’ compensation lost wage benefits or future medical expenses. An agreement containing the waiver of a claim or claims outside the Board’s jurisdiction that does not separately delineate the consideration being paid in exchange for the waiver will not be approved by the Board.
Please be aware that even if the terms of a Section 32 Waiver Agreement are consistent with the requirements outlined in the previous paragraph, the Board may nonetheless disapprove the agreement if it finds, based on the circumstances of the particular claim, that the provision is unfair, unconscionable, improper as a matter of law, or the result of an intentional misrepresentation of material fact.
Release of Unrelated Claims
A Section 32 Waiver Agreement that contains a provision waiving a claim or claims that do not arise out of the same nucleus of operative facts as the workers’ compensation claim being settled will not be approved by the Board unless the agreement identifies the specific claim being waived and the claim has already been commenced. The Board will not approve an agreement that contains a general release of any and all such unrelated claims, or an agreement that seeks to waive a specifically identified claim that has not yet been brought by the claimant. If a Section 32 Waiver Agreement contains a provision waiving an unrelated claim that has already been commenced by the claimant, the agreement must delineate what consideration is being paid in exchange for the waiver of that claim, which is separate from the consideration paid to the claimant for waiving their right to ongoing workers’ compensation lost wage benefits or for future medical expenses. An agreement containing the waiver of an unrelated claim outside the Board’s jurisdiction that does not separately delineate the consideration being paid in exchange for the waiver will not be approved by the Board.
Please be aware that even if the terms of a Section 32 Waiver Agreement are consistent with the requirements outlined in the previous paragraph, the Board may nonetheless disapprove the agreement if it finds, based on the circumstances of the particular claim, that the provision is unfair, unconscionable, improper as a matter of law, or the result of an intentional misrepresentation of material fact.
Agreements to Resign / Never Reapply
Section 32 Waiver Agreements will sometimes include a provision whereby the claimant agrees to resign from employment with the employer and/or to never reapply for employment with the employer. A waiver agreement containing such a provision may be approved by the Board, provided that the agreement delineates what consideration is being paid in exchange for the agreement to resign and/or never reapply, which is separate from the consideration paid to the claimant for waiving their right to ongoing workers’ compensation lost wage benefits or for future medical expenses. An agreement containing a provision whereby the claimant agrees to resign and/or never reapply that does not separately delineate the consideration being paid in exchange for the waiver will not be approved by the Board.
Please be aware that even if the terms of a Section 32 Waiver Agreement are consistent with the requirements outlined in the previous paragraph, the Board may nonetheless disapprove the agreement if it finds, based on the circumstances of the particular claim, that the provision is unfair, unconscionable, improper as a matter of law, or the result of an intentional misrepresentation of material fact.
– By Matthew Mead