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Resigning to settle a Workers’ Compensation Claim Can Affect Unemployment Compensation

December 20, 2021

By Shelley W. Elovitz, Esquire

In Smith V. Unemployment Comp. Bd of Review, a custodian for a school district sought unemployment compensation after receiving a letter that it was being recommended to the school board that he be discharged after an altercation with another employee. The worker filled for unemployment compensation, stating he had been discharged. The Employer contended that the worker had been discharged for willful misconduct and therefore should not receive benefits. However, during the hearing, the Employer changed its position and stated the worker had voluntarily resigned as part of his Workers’ Compensation settlement. The referee found for the claimant and he was awarded unemployment benefits.

Upon appeal, the Board reversed the decision, finding that the worker had voluntarily resigned when he signed a resignation form in relation to his Workers’ Compensation settlement. When seeking unemployment compensation, the worker bears the burden of establishing that the loss of his or her job was involuntary, or it was voluntary but there was “cause of a necessitous and compelling nature.” In this case, the Board concluded “Resigning to settle a workers’ compensation agreement does not provide a necessitous and compelling reason for quitting.” Therefore, the worker was denied unemployment compensation.

What does this mean? A resignation tendered in relation to a Workers’ Compensation settlement can preclude a worker from being eligible for unemployment compensation benefits.

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