If the employer offers a compromise and release for $12,500 contingent on resignation for a 15 percent permanent disability, what is your recommended position?

• A. Advise the employer it is okay
• B. Advise the employer it is against public policy
• C. Compromise and Release the claim with wording that the extra money is for the resignation
• D. Prepare a stipulated Findings and Award for 15 percent

Answer: (B)

The situation tests public policy about how workers’ compensation settlements are handled. Conditioning a compromise and release on the employee resigning due to a disability is coercive and undermines the employee’s rights. California’s system is designed to settle claims without pressuring an injured worker to leave employment simply because of a disability, and tying extra money to resignation treated as part of the settlement would amount to paying someone to surrender their rights. The proper approach is to reject the idea of making resignation a condition of the settlement and instead negotiate a standard release based on the 15% permanent disability (if a settlement is appropriate) or handle any severance separately and not as part of the workers’ comp settlement.