Client company's workers' comp policy bars lawsuit brought by parents

In Texas, the exclusive remedy provision bars claims by a temporary worker against a client company if the client company shows that it was the worker's employer and that it subscribed to workers' compensation insurance.

Case name: Port Elevator-Brownsville, L.L.C. v. Casados, No. 10-0523 (Tex. 01/27/12).

Ruling: The Texas Supreme Court held that a lawsuit brought by the parents of a deceased laborer was barred by the exclusive remedy provision of workers' compensation.

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What it means: In Texas, the exclusive remedy provision bars claims by a temporary worker against a client company if the client company shows that it was the worker's employer and that it subscribed to workers' compensation insurance.

Summary: A laborer worked for a temporary staffing agency. He was assigned to work for its client at a grain storage facility. He suffered a fatal work-related injury during his third day on the job. Both the agency and the client carried workers' compensation insurance. The laborer's parents sued the client. The Texas Supreme Court held that the suit was barred by the exclusive remedy of workers' compensation.

The court explained that the only exception to the exclusive remedy provision is when a worker's death was caused by the employer's gross negligence. Here, the client was not grossly negligent.

The parties agreed that the laborer was an employee of both the agency and the client. They disagreed as to whether the laborer was covered by the client's workers' compensation insurance policy. The court explained that a client company is entitled to the protections of the exclusive remedy provision if it was the worker's employer and it was covered by a workers' compensation policy. The court said this is to prevent an employer from splitting its workforce by choosing coverage for some employees but not covering all. A rule against split workforces allows workers to know whether they have the protections of workers' compensation coverage.

The court rejected the parents' contention that the client intended to exclude the laborer from coverage. The court said it did not matter whether the client paid its premiums for temporary workers or whether the laborer was covered by a code classification.

Read more at the WorkersComp Forum homepage.

March 5, 2012

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