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Global Settlement: Are You Required to Resign from Your Employment When Settling a Workers’ Compensation Claim?

Russ Haugen

Many times, potential clients come to us with the following question, "do I have to resign or sign a general release when I settle a workers’ compensation claim?" Or, a potential client is worried that if they sign off on settlement contracts it means that they are severing their employment and cannot return to work for the same employer.

The simple answer to the initial question is NO. Your employer or their workers’ compensation insurance carrier cannot require you to resign from your employment while settling a workers’ compensation claim. However, there are many employers and insurance companies that will request you to sign off on a general release and resignation, a Global Settlement, at the same time you are signing off on lump sum settlement contracts to resolve your pending workers’ compensation claim.

Employers, insurance companies, and their attorneys believe that it is more cost effective for them if they resolve workers’ compensation claims and potential employment (age discrimination, racial discrimination, retaliatory discharge, etc…) related claims at the same time. If they can get an injured worker to sign off on settlement contracts and a general release and resignation agreement, they believe they are saving them money in the long run. As such, some insurance companies will make it seem like a person is required to sign off on a general release and resignation while resolving a pending workers’ compensation claim. That is NOT the case.

If you are simply signing off on a lump sum settlement contract for a pending workers’ compensation claim, the settlement terms should not include language whereby you are resigning from your employment with that company. If that language is included in the settlement contract, the Arbitrators of the Illinois Workers’ Compensation Commission will generally not approve the contract.

However, if you are presented with the option of settling your workers’ compensation claim and signing off on a general release and resignation, there are many factors that you must consider before agreeing to do so. Therefore, if presented with that option, it is very important that you contact an attorney to discuss and weigh all of those options you have been given.

Global Settlement: A settlement resolves civil cases. It occurs when the injured party (plaintiff) presents such a strong case that the defendant’s lawyer determines it is better to offer a settlement than to go to trial. A global settlement occurs when a defendant – often a large corporation – must settle with multiple plaintiffs.

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