Wisconsin: Trial Court Can Compel Injured Employee to Accept Settlement of Third-Party Civil Action

The Supreme Court of Wisconsin affirmed a decision compelling a plaintiff/injured employee to accept a settlement offered in a third-party civil action he had filed against an alleged tortfeasor. The employee, who worked for the Village of Fontana, had filed a civil action against Northland Equipment for injuries he sustained while plowing snow for his employer. Northland offered $200,000 to settle and the Village’s comp carrier accepted the offer and moved the circuit court to compel the employee to accept it as well. The circuit court granted the comp carrier’s motion and the court of appeals affirmed. The employee contended that a worker’s compensation insurer could not compel an employee to accept settlement of a third-party tort claim, that to do so violated the employee’s right to a jury trial granted in Article I, Section 5 of the Wisconsin Constitution. The employee also contended that the circuit court’s order violated procedural due process. Citing Larson’s Workers’ Compensation Law, the state supreme court concluded that an employee could be compelled to accept settlement of the claim, that both the employee and the worker’s compensation insurer shared the right to sue third parties, and the employee and the worker’s compensation insurer had an equal voice in the prosecution of the claim. Moreover, the circuit court was empowered to resolve any disputes arising between the employee and the worker’s compensation insurer during the prosecution of their claim, including those disputes involving settlement. The high court also concluded that this interpretation of Wis. Stat. § 102.29(1) did not violate the employee’s right to a jury trial because the claim created was not the counterpart of a cause of action at law recognized at the time of the adoption of the Wisconsin Constitution. Nor did the circuit court’s authority to compel an employee to accept settlement violate procedural due process because judicial resolution of disputes was part of the statutory claim.

Thomas A. Robinson, J.D., the Feature National Columnist for the LexisNexis Workers’ Compensation eNewsletter, is a leading commentator and expert on the law of workers’ compensation.

LexisNexis Online Subscribers: Citations below link to Lexis Advance. Bracketed citations link to lexis.com.

See Adams v. Northland Equip. Co., Inc., 2014 WI 79, 2014 Wisc. LEXIS 492 (July 22, 2014) [2014 Wisc. LEXIS 492 (July 22, 2014)]

See generally Larson’s Workers’ Compensation Law, § 118.03 [118.03]

Source: Larson’s Workers’ Compensation Law, the nation’s leading authority on workers’ compensation law.

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