Well owner can't show oil worker was a borrowed servant for WC exclusivity

In Texas, a subcontractor, already working under a general contractor, can be also considered an employee or "borrowed servant" of a third party for purposes of applying the exclusivity provision of the Workers' Compensation Act.

Case name: Taylor v. Nadel and Gussman, LLC, No. 2:08-CV-268 (TJW) (E.D. Tex. 08/17/09).

Ruling: The U.S. District Court, Eastern District of Texas denied a well owner's motions for summary judgment, finding there were factual issues concerning the worker's employment status and whether the well owner was entitled to immunity from the worker's negligence claim.

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What it means: In Texas, a subcontractor, already working under a general contractor, can be also considered an employee or "borrowed servant" of a third party for purposes of applying the exclusivity provision of the Workers' Compensation Act. A third party and a subcontractor may enter into a written agreement under which the third party provides coverage to the subcontractor. Alternatively, if a third party can produce evidence that he "employed" the subcontractor at the time of the injury, and the third party had its own workers' compensation insurance in place, the third party may be treated as the employer of the subcontractor for purposes of workers' compensation immunity.

Summary: An oilfield consultant was injured when an unanchored pipe ruptured while he was working on a well. The well owner had hired the consultant through a contractor to perform a flowback analysis. The consultant alleged that the owner's negligence caused his injuries. The owner alleged it was immune from his negligence suit under the exclusivity provision of Texas' Workers' Compensation Act. It claimed that the consultant was a borrowed servant under the act, and thus it operated as his employer.

The District Court disagreed. It found that the well owner failed to show that the consultant entered into a written contract that would provide workers' compensation coverage to the contractor's employees. The consultant maintained the contractor was his employer and noted the contractor held a workers' comp policy for him. The consultant further argued the well owner did not show it had sufficient direction and control over the details of how the consultant performed his job to be his employer. The court agreed, finding there were factual issues concerning whether the owner was entitled to immunity from the consultant's negligence suit that prevented summary judgment.

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September 28, 2009

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