It’s been settled law for more than a decade that an injury that has been compensated by an employer very well might not be compensable.

Deciding a recent case along that jurisprudence, the Commonwealth Court has issued an opinion that could serve as a warning to unemployment compensation claimants and their attorneys about the language that goes into workers’ compensation settlement agreements, should the claimant be eyeing unemployment benefits down the road.

But one attorney specializing in labor law said an employer would “rarely” enter into a workers’ compensation settlement that left open the possibility for it to then be on the hook for a subsequent unemployment compensation claim.

The case of Bosch v. Unemployment Compensation Board of Review was no exception. In the case, claimant Leo R. Bosch received short-term disability benefits for a February 2010 work-related injury during the second and third quarters of that year. In March 2011, he signed a compromise and release agreement with his employer’s insurer, settling his workers’ compensation claim. The C&R agreement stated the employer, Truck Insurance Exchange, did not recognize liability for Bosch’s injury and would render all pending petitions moot.

Five months later, Bosch filed an application for unemployment benefits, resulting in a base year of April 2010 to March 2011. But, having been out on disability, Bosch had not reported sufficient wages for that period.

The issue in the case, therefore, became whether Bosch could adjust his base year to an alternate time period under Section 204(b) of the Workers’ Compensation Act. So far, no tribunal has agreed with Bosch that he could rely on an alternative base year, including a UC service center, a referee, the Unemployment Compensation Appeal Board, and the unanimous three-judge panel of the Commonwealth Court.

“In this case, [Bosch] settled his workers’ compensation claim without establishing that he suffered an injury compensable under the WC Act,” Judge Patricia A. McCullough said in a six-page opinion. “The C&R stated that employer did not accept liability for the injury and had a reasonable basis to contest the claim.”

“In other words, [Bosch] did not show an injury for which he is entitled to benefits,” she added. “Although [Bosch] submitted evidence concerning the nature and extent of that injury, the board has no authority to adjudicate the merits of a workers’ compensation claim.”

Bosch’s attorney, who did not handle the workers’ compensation claim, said it “definitely would have helped” if that language were stricken from the workers’ compensation settlement.

Wynnewood, Pa., attorney Paul M. Silver noted that, in his experience, the employer’s insurance carrier usually has no problem describing the accepted work injury and admitting to liability. He said a stipulation in which the insurer’s lawyer does not accept liability appears in about 10 percent of C&R agreements.

But Vincent J. Quatrini, a Greensburg, Pa., attorney specializing in labor law, said an employer would not be easily compelled to admit liability in a workers’ compensation settlement when they see an unemployment compensation following closely behind.

Therefore, if an injured worker settles a workers’ compensation claim and wants to preserve his or her ability to file for unemployment compensation, Quatrini said, the settlement agreement would need to include the employer’s admission of liability. The injured worker would also need to include a weekly disability rate from which the base year wage can be extrapolated, Quatrini said.

But Quatrini said employers rarely sign onto a C&R without language clearing them of liability.

“Practically speaking, this will rarely happen,” Quatrini said in an email. “The employer wants everything closed at the time of the [workers' compensation] settlement. The employer wants to avoid a subsequent [unemployment compensation] claim. So, you are rarely going to see an employer agreeing to language in the settlement agreement which will leave open this possibility.”

And even if a claimant successfully gets that language, Quatrini said, it would be “moot” because most employers require a claimant to resign at the settlement hearing, closing the door on a claim for unemployment benefits.

A spokesperson for the Unemployment Compensation Board of Review was not available for comment.

Ben Present can be contacted at 215-557-2315 or Follow him on Twitter @BPresentTLI.

(Copies of the six-page opinion in Bosch v. Unemployment Compensation Board of Review, PICS No. 12-2123, are available from Pennsylvania Law Weekly. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.)