In Collins v. Wieland Copper Prods., LLC, _____ N.C. App. ______, 910 S.E.2d 373 (2024), the Court of Appeals held that a prior settlement agreement with an employee for a prior work injury did not bar the employee from pursuing a second workers’ compensation claim for a subsequent date of injury.
On June 15, 2009, the employee suffered a compensable injury to his right shoulder while working for defendant-employer. The employee ended up having two surgeries to his right shoulder to repair a rotator cuff tear. In 2014, the employee and defendant-employer settled this workers’ compensation claim for $125,000.00 on a Compromise Settlement Agreement. After the parties entered into the Compromise Settlement Agreement, the employee continued to work for defendant-employer.
In 2020, the employee, while still working for the same defendant-employer, suffered another work injury to his right shoulder. Defendant-employer denied this claim on the grounds that the employee did not suffer a compensable injury by accident and contended that the prior Compromise Settlement Agreement barred the employee from making another workers’ compensation claim for his right shoulder. The Deputy Commissioner, Full Commission and Court of Appeals found that the employee did suffer a new compensable injury by accident to his right shoulder in 2020 and awarded the employee workers’ compensation benefits. The defendant-employer contended that language in the 2014 Compromise Settlement Agreement barred the employee from pursuing the 2020 workers’ compensation claim. The Court of Appeals held that N.C. Gen. Stat. § 97-6 applied. N.C. Gen. Stat. § 97-6 says as follows:
No contract or agreement, written or implied, no rule, regulation, or other device shall in any manner operate to relieve the employer in whole or in part, of any obligation created by this Article, except as herein otherwise expressly provided.
Based on this statute, the Court held that the earlier Compromise Settlement Agreement did not relieve the defendant-employer of its obligation to be responsible for the 2020 work injury claim.
What can an employer do to avoid being responsible for a subsequent injury after the initial injury is settled? There are two ways for the employer to avoid this situation.
First, the employer should try to have the employee resign his or her employment as part of any settlement. That way, the employee cannot make a subsequent workers’ compensation claim. Although you cannot force the employee to resign, it is usually not an issue and the employee and his or her attorney will usually agree to resign as part of any overall settlement. If that occurs, then the employer avoids the exposure for a second workers’ compensation claim to the same body part.
Second, if the employee does not want to resign as part of any overall settlement, the employer should consider just resolving the claim on a Form 26A for the permanent partial disability rating. If that is done, and two years go by without the payment of any further indemnity or medical compensation benefits, then the employee should be barred from seeking further indemnity compensation benefits by the provisions of N.C. Gen. Stat. § 97-47 and should be barred from seeking further medical compensation benefits by N.C. Gen. Stat. § 97-25.1 for the first workers’ compensation claim. This will not prevent the employee from making the second workers’ compensation claim, but it will keep the defendants from paying a large sum of money for the first claim and being exposed for paying further workers’ compensation benefits on the second claim.
