A signed $225,000 deal nearly unraveled over one skipped step
A Pennsylvania court has reminded employers that settling a workers' compensation claim comes with a firm rule - the judge must hold a hearing.
On August 20, 2026, the Commonwealth Court of Pennsylvania affirmed a ruling that a workers' compensation judge erred by dismissing a settlement without a hearing. The decision matters for any employer that negotiates its way out of a comp claim.
The case began with a registered nurse who hurt her back moving a patient in January 2021 while working for the University of Pennsylvania. The employer later argued she had fully recovered and filed to end her benefits. Two of her chiropractors filed their own petitions asking a judge to review whether their treatment was reasonable and necessary.
While that fight played out, the two sides kept talking. They reached a deal worth $225,000, plus $4,912.95 in litigation costs. In March 2024, the employer filed to have the settlement - known as a compromise and release agreement - approved.
The judge then told the parties the agreement had to resolve every open issue or it "will not be entertained." She held no hearing on the settlement. Instead, she ruled on the merits, found the nurse fully recovered, rejected the chiropractic treatment, and dismissed the settlement petition.
The nurse appealed. The Workers' Compensation Appeal Board vacated the judge's entire decision and sent it back, a move that reinstated benefits with interest. The employer pressed on, arguing the termination was properly decided and the settlement terms had changed once the judge found a full recovery.
The Commonwealth Court disagreed. Under Section 449 of the state's Workers' Compensation Act, once a party files to approve a settlement, the judge "shall consider the petition and the proposed agreement in open hearing" and issue a decision within 30 days. That language, the court said, is mandatory, and the hearing is not discretionary.
The court also rejected the idea that a settlement must clear every pending issue. Parties can settle future benefits while leaving specific petitions open for a judge to decide.
For HR and benefits teams, the lesson is concrete. A signed settlement does not lose its footing because other litigation is moving faster. Filing the approval petition starts a clock, and rushing to a merits decision instead can undo the result.
The matter now returns to a new judge to hold the hearing and decide the settlement and the pending petitions together.
