diff --git a/pkg/v1/tkg/client/upgrade_addon_test.go b/pkg/v1/tkg/client/upgrade_addon_test.go
index 8fa430df28..f5c959d75a 100644
--- a/pkg/v1/tkg/client/upgrade_addon_test.go
+++ b/pkg/v1/tkg/client/upgrade_addon_test.go
@@ -4,11 +4,14 @@
 package client_test
 
 import (
+	"testing"
 	"time"
 
 	. "github.com/onsi/ginkgo"
 	. "github.com/onsi/gomega"
 	"github.com/pkg/errors"
+
+	corev1 "k8s.io/api/core/v1"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
 
 	capi "sigs.k8s.io/cluster-api/api/v1alpha3"
@@ -17,6 +20,7 @@ import (
 	"github.com/vmware-tanzu/tanzu-framework/pkg/v1/tkg/clusterclient"
 	"github.com/vmware-tanzu/tanzu-framework/pkg/v1/tkg/constants"
 	"github.com/vmware-tanzu/tanzu-framework/pkg/v1/tkg/fakes"
+	fakehelper "github.com/vmware-tanzu/tanzu-framework/pkg/v1/tkg/fakes/helper"
 )
 
 var _ = Describe("Unit tests for addons upgrade", func() {
@@ -225,3 +229,97 @@ var _ = Describe("Unit tests for addons upgrade", func() {
 		})
 	})
 })
+
+// Test_RetrieveProxySettings tests a previous regression where the proxy settings
+// for a workload cluster was being incorrectly inherited from the management cluster.
+// Specifically, this test validates retreiving proxy settings for a workload cluster
+// with different settings from the management cluster.
+func Test_RetrieveProxySettings(t *testing.T) {
+	RegisterTestingT(t)
+	g := NewWithT(t)
+
+	tkgClient, err := CreateTKGClient("../fakes/config/config2.yaml", fakehelper.CreateTempTestingDirectory(), "../fakes/config/bom/tkg-bom-v1.3.1.yaml", 2*time.Millisecond)
+	g.Expect(err).To(BeNil())
+
+	regionalClusterClient := &fakes.ClusterClient{}
+	regionalClusterClient.ListClustersReturns([]capi.Cluster{
+		{
+			ObjectMeta: metav1.ObjectMeta{
+				Name:      "regional-cluster-2",
+				Namespace: constants.DefaultNamespace,
+			},
+		},
+		{
+			ObjectMeta: metav1.ObjectMeta{
+				Name:      "workload-cluster",
+				Namespace: constants.DefaultNamespace,
+			},
+		},
+	}, nil)
+	regionalClusterClient.GetResourceStub = func(obj interface{}, name string, namespace string, verifyFunc clusterclient.PostVerifyrFunc, pollOptions *clusterclient.PollOptions) error {
+		if name == constants.KappControllerConfigMapName {
+			cm := &corev1.ConfigMap{
+				ObjectMeta: metav1.ObjectMeta{
+					Name:      constants.KappControllerConfigMapName,
+					Namespace: constants.KappControllerNamespace,
+				},
+				Data: map[string]string{
+					"httpProxy":  "http://10.0.0.1:8080",
+					"httpsProxy": "http://10.0.0.1:8080",
+					"noProxy":    "127.0.0.1,foo.com",
+				},
+			}
+			cm.DeepCopyInto(obj.(*corev1.ConfigMap))
+		}
+
+		return nil
+	}
+
+	workloadClusterClient := &fakes.ClusterClient{}
+	workloadClusterClient.GetResourceStub = func(obj interface{}, name string, namespace string, verifyFunc clusterclient.PostVerifyrFunc, pollOptions *clusterclient.PollOptions) error {
+		if name == constants.KappControllerConfigMapName {
+			cm := &corev1.ConfigMap{
+				ObjectMeta: metav1.ObjectMeta{
+					Name:      constants.KappControllerConfigMapName,
+					Namespace: constants.KappControllerNamespace,
+				},
+				Data: map[string]string{
+					"httpProxy":  "http://10.0.0.1:8081",
+					"httpsProxy": "http://10.0.0.1:8081",
+					"noProxy":    "127.0.0.1,bar.com",
+				},
+			}
+			cm.DeepCopyInto(obj.(*corev1.ConfigMap))
+		}
+
+		return nil
+	}
+
+	// validate retrieving management cluster settings
+	err = tkgClient.RetrieveRegionalClusterConfiguration(regionalClusterClient)
+	g.Expect(err).To(BeNil())
+
+	httpProxy, err := tkgClient.TKGConfigReaderWriter().Get(constants.TKGHTTPProxy)
+	g.Expect(httpProxy).To(Equal("http://10.0.0.1:8080"))
+	g.Expect(err).To(BeNil())
+	httpsProxy, err := tkgClient.TKGConfigReaderWriter().Get(constants.TKGHTTPSProxy)
+	g.Expect(httpsProxy).To(Equal("http://10.0.0.1:8080"))
+	g.Expect(err).To(BeNil())
+	noProxy, err := tkgClient.TKGConfigReaderWriter().Get(constants.TKGNoProxy)
+	g.Expect(noProxy).To(Equal("127.0.0.1,foo.com"))
+	g.Expect(err).To(BeNil())
+
+	// validate retrieving workload cluster settings
+	err = tkgClient.RetrieveWorkloadClusterConfiguration(regionalClusterClient, workloadClusterClient, "workload-cluster", constants.DefaultNamespace)
+	g.Expect(err).To(BeNil())
+
+	httpProxy, err = tkgClient.TKGConfigReaderWriter().Get(constants.TKGHTTPProxy)
+	g.Expect(httpProxy).To(Equal("http://10.0.0.1:8081"))
+	g.Expect(err).To(BeNil())
+	httpsProxy, err = tkgClient.TKGConfigReaderWriter().Get(constants.TKGHTTPSProxy)
+	g.Expect(httpsProxy).To(Equal("http://10.0.0.1:8081"))
+	g.Expect(err).To(BeNil())
+	noProxy, err = tkgClient.TKGConfigReaderWriter().Get(constants.TKGNoProxy)
+	g.Expect(noProxy).To(Equal("127.0.0.1,bar.com"))
+	g.Expect(err).To(BeNil())
+}