Vermont: Commissioner May Not Set Aside Settlement Agreement on Public Policy Grounds

Where a hearing officer approved a workers’ compensation settlement agreement that contained broad release language and had required the claimant to sign a separate letter acknowledging the breadth of the release of future rights to seek additional benefits, the Commissioner could not subsequently set aside a significant portion of the agreement on the basis that it was “impermissibly broad” and violated public policy. The Commissioner’s authority was limited by statute. The Commissioner or her designee may approve or reject a settlement agreement only at the time it is initially presented. Once approved, agreements are binding and absent evidence of fraud or material mistake of fact, they may not be set aside. Nowhere in the Workers’ Compensation Act was the Commissioner given the authority to revisit and retract a settlement agreement at a later date and after prior approval. The Court added that if the Legislature had intended to allow the Commissioner to reject a compromise agreement on public policy grounds, it could have done so.

Thomas A. Robinson, J.D., the Feature National Columnist for the LexisNexis Workers’ Compensation eNewsletter, is the co-author of Larson’s Workers’ Compensation Law (LexisNexis).

LexisNexis Online Subscribers: Citations below link to Lexis Advance.

See Clayton v. J.C. Penney Corp., 2017 VT 87, 2017 Vt. LEXIS 105 (Sept. 22, 2017)

See generally Larson’s Workers’ Compensation Law, § 132.06.

Source: Larson’s Workers’ Compensation Law, the nation’s leading authority on workers’ compensation law