Agree to Disagree? Not in Tennessee!

by Brandis Brooke Godwin, Esq.

The Tennessee Workers’ Compensation Commission requires an actual dispute among the parties to settle a claim on a disputed basis. Generally, a disputed settlement involves a disagreement over the claim’s compensability or benefits owed to the injured employee. Under Tenn. Code §50-6-240(e), the court, in its discretion, may approve a disputed settlement when it finds that the terms are in the employee’s best interest.

In a recent case, the parties appealed the trial court’s decision to not approve a proposed settlement which evidently did not establish a “dispute.” Torres v. Allvan Corp., 2024-05-4796, (Tenn. Work. Comp. App. Bd. 2025). In this case, the claim’s compensability was not in dispute, nor was there a dispute over impairment. The parties asserted that their dispute was to the amount of impairment. No impairment rating had been assigned by the physician, and it was the parties’ disagreement on the amount of the potential rating that formed the basis of the doubtful and disputed settlement. The trial court rejected the settlement, finding that the issue could not be disputed when the parties agreed that no rating had been assigned.

On appeal, the parties filed a joint brief arguing that the lack of an impairment rating created a dispute on the basis that the rating “could be 0%” but, alternatively, could be more. The Appeals Board rejected this argument, stating that an agreement to choose an impairment rating, despite the rating’s uncertainty, does not create an actual dispute. When the parties failed to offer medical evidence reflecting an impairment rating on which the parties disagreed, the court could not properly determine that the settlement was in the employee’s best interest. The parties questioned this reasoning, asserting “judicial overstep” and declared that the employee knew his interests better than any court. In response, the court reasoned that a Workers’ Compensation judge, by statute, must decide whether the employee understands the terms of the agreement in a disputed settlement. Tenn. Code §50-6-240(e).

When there is no apparent dispute, a determination cannot be made as to whether the terms are aligned with the employee’s best interest. An impairment rating is a crucial component to calculate additional benefits, such as permanent partial disability. An agreement to settle the permanent partial disability in an accepted claim, absent a presentation of medical evidence regarding an impairment rating, may certainly raise doubt, but it does not create a proper dispute under Tennessee law.