A memorandum of understanding (MOU) can be an invaluable, interim tool in mediation in workers' compensation cases.
Almost all of my mediations end with agreement to a Compromise and Release. Parties often bring a partially completed Compromise & Release form, DWC-CA form 10214(c), to the mediation. That’s great. But when considerations prevent execution of a final agreement at the mediation, a Memorandum of Understanding, known as an M.O.U., can be invaluable.
After working hard to come to terms, you don’t want to let the passage of time blur people’s memories or minimize their commitment. Participants should not leave the mediation without a record of their agreements.
A Memorandum of Understanding memorializes the skeleton terms agreed upon at the mediation. Parties sign off at the mediation. The M.O.U. might specify a timeline or conditions.
Some settlements are complicated, requiring many addenda. Unanticipated issues may have arisen and been resolved at the mediation. Parties need to return to their offices to draft the final settlement document. The M.O.U. should specify the basic terms as well as deadlines for completion of the initial settlement document, exchange of revisions, and submission to the WCAB.
See also: Work Comp: Mediation or an ‘Informal’?
Some agreements are conditional, usually upon CMS approval of a Medicare Set-Aside allocation. Attorneys may address this issue by doing everything but the walk-through, including signatures, pending approval. This leaves a potentially dangerous loophole when unforeseen events occur during the waiting period.
Another way to document a conditional agreement is through an M.O.U. Unlike the agreement, which sits in a file drawer, an M.O.U. can specifically address the condition, including what will happen if the condition cannot be fulfilled. For example, if CMS comes back with a higher amount, and the parties do not assent to that amount within a specified time, they can agree to return to mediation.