Successor employer rebuffs dual persona liability

Where an injured worker was an employee of a predecessor-in-interest company, he will not be able to overcome the workers' compensation exclusivity provision and sue the successor company for his injuries.

Case name: Union Carbide Corp. and Hexion Specialty Chemicals, Inc. v. Smith, No. 01-08-00641-CV (Tex. Ct. App. 10/01/09).

Ruling: The Texas Court of Appeals determined that a successor-in-interest employer was protected from an injured worker's lawsuit by the exclusive remedy doctrine.

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What it means: Where an injured worker was an employee of a predecessor-in-interest company, he will not be able to overcome the workers' compensation exclusivity provision and sue the successor company for his injuries.

Summary: A pipefitter was diagnosed with mesothelioma from asbestos exposure. He sued his employer, Hexion, for breach of duty to provide him with a safe work environment. The pipefitter alleged he was continuously exposed to asbestos when he worked for Smith-Douglas, which Hexion acquired through a merger. The pipefitter did not dispute that he was covered by Hexion's workers' compensation policy after the merger or that it applied to his mesothelioma. Rather, he attempted to hold Hexion responsible for the negligence of Smith-Douglas before the merger. The pipefitter argued that Hexion's liability applied retroactively since Hexion acquired all of Smith-Douglas' assets and liabilities.

The Court of Appeals rejected the pipefitter's request to apply the dual persona doctrine, which is based on the concept that a surviving corporation's responsibilities post-merger are separate from its role as an employer under the workers' compensation laws. The court reasoned that the doctrine is not applicable in Texas to overcome the exclusivity provision. It reversed the lower court's finding and rendered a "take nothing" judgment for the employer.

Hexion argued the pipefitter's breach of duty claim was barred by the exclusivity provision of the Workers' Compensation Act. Hexion pointed out that occupational diseases like mesothelioma are considered a single injury arising when the employee knew or should have known of the disease. The court agreed that the pipefitter's claims against Hexion arising from his asbestos exposure while working for Smith-Douglas were barred by the exclusive remedy provision.

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November 5, 2009

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