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Newlon v. Teck American – Clincher Agreements in Workers’ Compensation

On Behalf of | Dec 10, 2015 | Georgia Workers' Compensation |

In workers’ compensation case law, a “clincher agreement” is a compromised settlement between an injured worker, the employer and the employer’s insurer.

Clincher agreements indicate a final resolution of a case. Usually, this involves some lump sum cash settlement in exchange for release of all future liability against the employer and insurer. It will address payment of all outstanding medical bills, and may provide some stipulation for future medical bills related to the work injury.

Such an agreement can be beneficial for both parties, as it provides injured worker with necessary compensation and takes the guesswork out of future disputes. However, it’s imperative that these agreements be carefully drafted and reviewed. Failure to do so can result in signing away important rights and leaving you stuck paying for work-related medical bills with no option for further recourse.

If at any point the employer/ insurer violates terms of that final agreement, it may be necessary to initiate further legal action. Such was the case in Newlon v. Teck American, Inc., recently before the Montana Supreme Court.

According to court records, plaintiff worked for a mining and resource extraction corporation for more than two decades. He started in 1972 and worked there until the mine closed in 1993. During that time, he was injured in the course and scope of employment on several occasions, including three separate injuries involving his left knee. He also suffered back injuries.

The last of his three knee injuries occurred in 1991. Problems with the knee worsened as time wore on, and he needed surgery in 1993 and 1996. Still, the trouble continued.

Plaintiff met with his former employer that year to discuss a clincher agreement. Knowing his doctors warned him he would need additional treatment in the future, plaintiff negotiated a deal in which he would release his employer and workers’ compensation insurer for liability in exchange for a $25,000 lump sum settlement, plus lifetime medical care for his knee and back. He agreed to this settlement because he understood his medical care relating to the work injuries would be 100 percent covered for the rest of his life.

The knee didn’t need additional treatment again until four years later, at which time he sought aid from a physician for swelling and locking up. Treatment seemed to help. But he was back again in 2007, and that treatment continued over the course of the next three years. Then in 2012, physicians recommended a total knee replacement.

When the claim was submitted to the workers’ compensation insurer, however, the company declined to pay. They argued the claim was barred because it was due to a superseding intervening cause and the statute of limitations on his claim had run out. Still, they agreed to pay the bill upfront with a reservation of rights while they fought it in court.

Trial court decided in favor of plaintiff, and the Montana Supreme Court affirmed. In the end, the case was resolved under contract law, as it involved a promise made between two parties. Workers’ compensation agreements have repeatedly been deemed enforceable contracts, and the state supreme court vowed to uphold this one.

For information on Atlanta work injury compensation, contact J. Franklin Burns, P.C., at 1-404-920-4708 .