It doesn't happen very often in Illinois, but once every 50 cases or so, an employer or an insurance company will ask a worker to resign as part of any workers' compensation settlement.
This usually happens because they either: A. They think you are a pain in the butt and don't want you around; or B. They think you are at a big risk of re-injury if you come back to work. That is certainly the biggest reason this happens.
A few things to know if you are asked to resign:
1. While there are some states such as Florida where if you don't resign you'll never get a settlement, Illinois isn't one of them. If you don't want to resign, don't do it. Certainly don't do it if you don't have a job lined up and can't handle financially not to work.
2. A seperate separation agreement would have to be created. Your workers' compensation settlement contract can not create an enforceable resignation.
3. Most importantly, if you are going to resign at their request, they need to show you the money for that. How much you should get paid can vary from case to case, but it's not unusual to get an extra $25,000 or more. It could be less of course, but if it's much less then why are you doing it at all?
What shouldn't happen is for an insurance company to say "We'll pay you $X, but as part of that you have to resign." If they do say that and you are happy with the dollar amount, tell them you'll take that number plus $X more to resign.
Again, this doesn't happen all of the time. But if it does, you are giving up something of value. If you get nothing back then you are just getting taken advantage of.