In a North Carolina workers’ compensation case a “clincher agreement” is a compromised agreement or settlement between an injured employee or worker and an employer or their insurance company. When the worker and the employer’s insurance company agree on a settled amount the insurance company’s attorney will draft a clincher, or agreement, stating that the parties have reached a final resolution of the case.

The clincher agreement usually states the employee will receive a lump sum cash settlement in return for releasing all future liability against an employer. In order for a clincher to be allowed, it must be approved by the North Carolina Industrial Commission. A clincher must meet the requirements of Rule 502 of the North Carolina Industrial Commission and, if it does, the Industrial Commission will typically approve the clincher agreement.  The main purpose of this approval by the Commission to make sure the employee is treated fairly.

Many times, an employee may be interested in a quick, low-value clincher without considering any long term affect this clincher will have on their future job prospects or earning capacity due to their on the job injury. At times an injured worker is only living on 66.6% of their regular income so the clincher is a way for them to get quickly caught up on past due bills and other expenses. However, a quick settlement is typically not a good idea.

One of the main purposes of the clincher is to bring about a definite end to a workers’ compensation case for all parties.  For example, if the employer or the employer’s insurance company has accepted liability for the injury, the employer could be liable for many years of medical care and lost wages. Due to this potentially long term liability, many employers want to settle or “clincher” the case so they have a sum certain amount they will have to pay for the injury and they can pay this amount and terminate the case and no longer be responsible for any future costs based upon this one injury.