Employment release changes

House Bill 3471, which took effect on July 27, is a new provision regarding employment releases. It prohibits employers from negotiating and entering into settlements that resolve a workers’ comp claim and are contingent upon the worker signing an agreement that bars the worker from seeking further employment, re-employment, or reinstatement with an employer (i.e., a global settlement).

There are exceptions. If, prior to any offer, the worker provides the employer with written confirmation of the worker’s willingness to enter into such an agreement relating to their employment and the offer affirmatively states that the agreement is contingent on a release, then the employer can negotiate and enter into a global settlement. In addition, this law does not apply if the settlement offer affirmatively states that settlement of the workers’ comp claim is not conditional on a release also being signed by the worker.

Violations could result in a civil action, a fine, compensatory damages, punitive damages, and attorney fees.

Employers should consult their labor counsel about the impact of this new provision in relation to their ability to enter into an employment release associated with a workers’ comp settlement.

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