Does emotional distress settlement have to be reported as income if the case stems from work injury?

An employee was injured at work and lost his job after he was determined to be "permanent and stationary" and unable to physically perform his job duties. He was informed that his position was filled, his employer never initiated the separation process. Legally, he remained an employee with no job to report to with no compensation. He was invited to apply for other open positions for which he was qualified, and he did.

The employee was repeatedly denied consideration for other positions he was qualified to do and applied for, and eventually sought legal help, resulting in discrimination charges. A proposed settlement agreement was reached in which the employer's counsel suggests an allocation of funds divided evenly between wages and emotional distress. In this scenario, could the employee attribute the emotional distress to job-related physical injury and not claim that allocation as income? Or, would this apportionment be considered taxable since this is a discrimination settlement and not a work comp or personal injury case?
In this instance, the discrimination charges were a result of the employee experiencing discrimination after he was injured at work and no longer able to perform his job duties. So even after reading the IRS guidelines and consulting with tax experts, I'm not any clearer if emotional distress is taxable in this case or not.
Thanks for considering my question!