It’s Our Settlement and We Can Cry If We Want To: Limited Powers of ALJs

In a decision dated July 28, 2014, the Benefits Review Board defined, or rather, clarified, the limited circumstances in which an administrative law judge can alter the terms of a Section 8(i) Settlement Agreement.

Claimant allegedly suffered from asbestosis and hearing loss as a result of his employment with Employer.  While Employer controverted Claimant’s alleged lung disease from the outset, it compensated Claimant for his hearing loss.  The parties, both of whom were represented, negotiated terms of settlement and submitted an Section 8(i) Settlement Agreement to the administrative law judge for approval.  A duplicate copy was sent to the Connecticut Workers’ Compensation Commission pursuant to the state’s compensation act.

On August 13, 2013, the administrative law judge issued a decision and order approving the parties’ Section 8(i) Settlement Agreement; he concluded it was adequate and not procured by duress.  However, the administrative law judge took it upon himself to alter the agreement.  The judge reduced the attorney’s fees by an amount he thought appropriate but allocated the difference to the Claimant.  The judge also made approval contingent on the Connecticut Workers’ Compensation Commission approval, and held the insurance carrier liable for the settlement proceeds when it wasn’t a party to the agreement.

On appeal to the Benefits Review Board, the Claimant argued the administrative law judge did not have proper authority to alter a settlement agreement between the parties.  The Benefits Review Board agreed the administrative law judge’s actions were not in accordance with law.  In reaching this decision, the Board explained the limited options of a administrative law judge when reviewing a Section 8(i) Settlement Agreement: 1) issue a deficiency notice if the application is incomplete, 20 C.F.R. 702.242, 702.243(b); 2) approve the settlement if it is adequate and not procured by duress, 33 U.S.C. 908(i)(1); 20 C.F.R. 702.243(b); 3) disapprove the settlement if it is inadequate or was procured under duress, 33 U.S.C. 908(i)(1)-(2); 20 C.F.R. 702.243(b), (c); or 4) do nothing, in which case, if the parties are represented by counsel, the settlement will be deemed approved after 30 days, 33 U.S.C. 908(i)(1); 20 C.F.R. 702.243(b).  Other than these provisions, an administrative law judge is not authorized to modify the terms of the parties’ agreement, whether deliberately or inadvertently.  The Benefits Review Board modified the order approving the settlement to reflect the parties’ original terms and intentions.

Losacano v. Electric Boat Corp., BRB No. 13-0554 (2014)