Settlement of SJDB Voucher for Post-01/01/2013 Injuries

In a dramatic policy shift, the Appeals Board has issued a new panel decision allowing settlement of the Supplemental Job Displacement Benefit voucher in a Compromise and Release settlement agreement under certain limited circumstances.

Ever since the SJDB voucher became effective for injuries on or after 01/01/2013, it has been the stated policy and practice of the WCAB to deny approval of any type of settlement of the voucher.  The prohibition against settlement of the voucher was based on the plain language of Labor Code §4658.7(g) (which provides that “settlement or commutation of the claim for the supplemental job displacement benefit shall not be permitted…”) and Tit. 8 CCR §10133.31(h) (stating that “settlement or commutation of the claim for the supplemental job displacement voucher is not permitted”).

But in the August 3, 2016, board panel decision after reconsideration in Juan Pablo Beltran v. Structural Steel Fabricators/State Compensation Insurance Fund (ADJ9721385 POM), the Appeals Board reversed course and held that the parties may agree to settle out an employee’s potential right to the voucher where there is a good faith dispute that could potentially defeat all of the employee’s rights to workers’ compensation benefits.

Making a common-sense analogy to the settlement of vocational rehabilitation benefits under Thomas v. Sports Chalet (1977) 42 CCC 625, the Appeals Board reasoned that public policy favors settlement of disputes.  The Appeals Board pointed out that entitlement to a voucher is conditioned upon both (a) an accepted/adjudicated industrial injury and (b) the existence of permanent partial disability.  Where an employer has denied liability for injury AOE/COE or raised an affirmative defense that could potentially defeat all rights to compensation under the Workers’ Compensation Act, a prohibition on settlement of the voucher would necessarily require a trial in each and every case.

Accordingly, the Appeals Board held that where the WCJ makes an express finding based upon the record that a serious and good faith issue exists to justify a release, the parties may settle the employer’s potential liability for the Supplemental Job Displacement Benefit voucher.  This decision will allow employers to effectively close out all potential liability in denied claims, provided that an adequate record exists to demonstrate the existence of a good faith dispute of injury AOE/COE.  A copy of the decision is attached to this Memo.

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