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Ruiz: Close That File: A New-Fangled Thomas Finding to the Rescue

By Manuel A. Ruiz

Wednesday, October 4, 2017 | 492 | 0 | 0 min read

As time passes, we are handling fewer and fewer pre-Jan. 1, 2013, injuries. As such, we are going to be encountering more instances where settling a voucher becomes an issue.

Manuel A. Ruiz

Manuel A. Ruiz

Per Labor Code §4658.7, for injuries that occurred on or after Jan. 1, 2013, if an employer does not offer permanent regular, modified or alternative work to an injured worker with permanent disability, the employer is required to issue a $6,000 Supplemental Job Displacement Benefit (SJDB) voucher. The voucher cannot be settled for cash. Time and time again, however, cases are settled when there is a good-faith dispute as to whether the applicant is entitled to a voucher.

In Beltran v. Structural Steel Fabricators, (2016) 2016 Cal. Wrk. Comp. P.D. LEXIS 366, the applicant filed a cumulative trauma claim. The defendant denied the claim as being post-termination. The parties had submitted a compromise and release that included Beltran’s potential entitlement to a SJDB voucher.

The workers' compensation judge suspended action on the settlement agreement, noting that the labor code prohibited SJDB settlements. She amended the settlement to exclude the voucher. The defendant sought reconsideration.

On reconsideration, the Workers' Compensation Appeals Board ordered the compromise and release be amended to recognize a good-faith dispute existed as to injury arising out of employment/course of employment and/or liability for injury that could, if resolved against the applicant, defeat Beltran’s right to recover benefits.

An order was issued approving the parties’ compromise and release as presented. The panel agreed with the argument that where there is a good-faith dispute as to the compensability of a claim of injury, the parties should be permitted to settle claimant’s alleged entitlement to the SJDB voucher.

The panel relied on a similar situation regarding the settlement of vocational rehabilitation benefits that was addressed in Thomas vs. Sports Chalet (1977) 42 Cal. Comp. Cases 625 (Appeals Board En Banc). In this case, the parties settled by way of a compromise and release with provisions settling vocational rehabilitation rights. The court found that before the settlement of vocational rehabilitation could be permitted, the trier of fact had to thoroughly review the record to determine whether “a serious and good-faith issue exists to justify such a release.”

Now, with the combination of Thomas and Beltran, when the SJDB voucher is settled with regard to a claim that was filed with a post-Jan. 1, 2013, date of injury compromise and release, the WCJ must determine whether the case involves “serious and good-faith issues” that could lead to the entire defeat of the worker’s entitlement to benefits.

Basically, the WCJ will have to determine whether, based on the evidence, the worker could be left with the complete denial of benefits should the case be fully adjudicated. Generally speaking, this is not a difficult proof.

In a sense, there are two winners in this situation. Defendants are able to obtain the complete release of benefits and close the file. Injured workers can receive some compensation for a benefit they might not otherwise receive (thereby making a C&R more enticing to the applicant and to applicant’s attorney).

Manuel A. Ruiz is an associate attorney located in Bradford & Barthel’s Los Angeles office. This entry from Bradford & Barthel's blog appears with permission.

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