Can You Settle Vocational Rehabilitation Temporary Disability Retroactively?

The Second Appellate District has issued a “draft” opinion in regard to settling retroactively vocational rehabilitation temporary disability (vrtd). It is not a final opinion yet, but will have significant impact, if decided as currently written.

The applicant made an initial demand for rehabilitation on his application in 1989. A compromise and release was entered into in 1992.  The agreement included language, “This agreement settles any and all claims for T.D. and V.R.T.D. to date.” They stipulated that the applicant was not QIW at the present time and if the applicant wanted rehabilitation at a future date no benefits would be paid until the applicant was seen by an AME. The judge signed an order approving the C&R containing the aforementioned language.

The applicant filed for rehabilitation.  One issue became whether the applicant could receive retroactive VRTD. This Court intends to hold that you cannot settle accrued vocational rehabilitation benefits where no basis exists for the application of the good faith exception cited in Labor Code section 5100.6. Under that section the commutation or settlement of vrtd is prohibited. Therefore, you need a Thomas type of good faith exemption to settle retroactive vrtd in the non-Thomas case.

The Court goes on to state that the language in a C&R specifically requires a judge to expressly approve applicant’s release of any rehabilitation benefits. Therefore, the judge must put in the Order Approving that the applicant is settling retroactive vocational rehabilitation. Theoretically, there must be an offer of proof to support that. The Court also is intent on finding that the starting date for instituting benefits would be the date of the original application. The decision will thus establish that normal language in the C&R will not be sufficient to settle accrued vrtd. It is common practice when preparing a Compromise and Release for a Thomas case to prepare an Order for the Judge indicating that you are requesting a Thomas finding. It is not clear at this point how specific one will have to be based on this decision in settling retroactive vrtd. It may be that you can simply cite Estrada v.  WCAB. However, caution would indicate if this decision holds up that you also include specific language as you do in a Thomas situation.

Case: Estrada V. W.C.A.B.

Harvey Brown
3501 Jamboree Rd. Suite 602
Newport Beach, CA 92660

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