Injured workers in Washington have been choosing over the past few years whether to take a cash settlement in compensation for their injuries instead of a lifetime pension.
But a state board has blocked some of those settlements when it believes they are not in the best interest of the worker.
A court put a halt to that Tuesday for workers with attorneys, saying the board can't intervene to protect the workers from themselves.
When state lawmakers created the option for settlements in installments, they intended the Board of Industrial Insurance Appeals to step in only to protect the interests of workers without attorneys, the Court of Appeals Division II ruled.
"This approach assigns the determination of one’s own interest to those arguably best positioned to make that determination, workers with legal counsel," Judge Thomas Bjorgen wrote in a unanimous decision joined by Judges Bradley Maxa and Jill Johanson.
The court upheld a Kitsap County Superior Court decision.
Labor unions argue that without safeguards like a board review, workers who are desperate for money may take a settlement that looks good at the time but doesn't take care of them in the long run.
"Evidence from other states that have had 'compromise and release' settlements in place for some time are filled with examples of workers getting the short end of the stick because they are hard pressed financially to do anything other than to agree to a bad deal," Washington State Labor Council President Jeff Johnson said.
Business groups feel there are too many restrictions as it is on the settlements, which it says are working in other states. They have been lobbying to allow younger workers to choose the settlements, which are now limited to people 55 and older.
"The Court got this one exactly right," Kris Tefft, Executive Director of the Washington Self-Insurers' Association. "The Legislature still needs to take a look at ways to make workers' comp settlements more user friendly, and live up to their intended promise. But hopefully, this decision takes this one specific dispute off the table so we can focus on more important things for injured workers and their employers."
If settlements become more common, that could reduce the liability in the state workers' compensation system and tamp down increases in premiums.