Court Holds That Injured Worker May Not Receive Unemployment Benefits After Signing Letter Of Resignation As Part of WC Settlement

Posted on Tuesday, March 29th, 2016 at 3:56 pm    

Any practicing claimant’s workers’ compensation attorney can attest to the fact that it has unfortunately become commonplace in Pennsylvania for employers to require injured workers to sign letters of resignation as part of any settlement of their workers’ compensation claims. Occasionally, the injured workers are actually still employed by the time-of-injury employer at the time of settlement. More often file4801275587119than not, however, the injured employee has been out of work for quite some time, and perhaps was even terminated prior to settling his or her workers’ compensation case. Nonetheless, they are typically presented with a one paragraph letter of resignation memorializing their intention to “resign” from their employment. They are told that if they do not sign the letter of resignation the employer will not settle their work injury claim. So they sign.

Commonwealth Court Addresses Whether Injured Worker Can Receive Unemployment Benefits After Resigning From Employment Following Work Injury In Order To Settle WC Case

Following the workers’ compensation settlement the injured worker remains out of work and applies for unemployment compensation benefits. The question often presented, and addressed by the Commonwealth Court in Nicholson v. Unemployment Compensation Board of Review, 2016 WL 903258 (Pa. Commw. Ct. 2016), is whether the injured worker is deemed to have voluntarily resigned without “cause of a necessitous and compelling nature” such that the employee is deemed ineligible for unemployment compensation benefits.

In Nicholson, the employee was injured at work and thereafter stopped working due to his right shoulder injury. The employer could not offer the claimant work within his restrictions. Subsequently, he agreed to resolve his workers’ compensation claim by way of a Compromise and Release Agreement. His employer required him to sign a one paragraph letter of resignation in order to resolve his claim. After settling his work injury claim the injured worker applied for unemployment compensation benefits.

Court Holds That Injured Workers May Not Resign As Part Of Workers’ Compensation Settlements And Then Collect Unemployment Benefits

The Commonwealth Court held that Mr. Nicholson had resigned from his employment and was therefore not eligible for unemployment benefits, rejecting his argument that the employer had essentially terminated his employment when it did not offer him work available within his medical restrictions prior to his settlement. The Court actually stated that it was “duplicitous” of claimant to seek unemployment benefits by arguing that he did not resign but was actually fired before he made his promise to resign. As such, the Court upheld the Board’s denial of unemployment benefits to Mr. Nicholson.

The Court’s decision should not come as a surprise to practicing workers’ compensation attorneys. However, this case reiterates the importance of effectively communicating to clients the ramifications of signing a standard letter of resignation when settling a workers’ compensation claim. Left unresolved by the Court’s decision is whether an employee who signs a letter of resignation when settling a workers’ compensation claim after actually being terminated weeks or months earlier would likewise be precluded from receiving unemployment benefits due to the letter of resignation.

If you or a loved one have been injured at work and have questions, contact the Philadelphia workers’ compensation attorneys at Zavodnick, Zavodnick & Lasky, LLC today for a free consultation or call (215) 875-7030.

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