The Texas Supreme Court recently issued a ruling that affects the rights of many Texas contract workers. The decision narrows injured contract workers’ right to sue site owners for negligence. Now, if premises owners act as general contractors and pay for workers’ compensation insurance, they cannot be sued for negligence by injured employees of subcontractors.
The Rights of Injured Contract Workers
Previously, Texas did not have a clear rule on whether premises owners who acted as general contractors, rather than hiring general contractors, could be sued for compensation outside of the Texas Workers’ Compensation Act.
This means that it was not clear whether an employee of a subcontractor could sue the site owner for negligence when the site owner contracted directly with the subcontractor, the site owner paid workers’ compensation insurance and the employee was injured while working at the site. This is important because workers who are allowed to sue for negligence may receive greater compensation, in addition to workers’ compensation, for their injuries.
Workers’ Compensation vs. Negligence
Workers’ compensation is a system that covers employees who are injured while they are doing their jobs. It pays for their medical bills and makes up for part of their lost wages.
Workers’ compensation, however, is a tradeoff. Workers’ comp makes it easier for employees to get financial help when they are injured, but it also prohibits them from suing their employer when their employer’s negligence (the failure to exercise the proper standard of care) contributed to their injuries.
Normally, when a contract worker, employed by a subcontractor, is injured on a job site, that worker can sue the site owner if the injury is due to the owner’s negligence. This is because any worker’s compensation insurance is provided by the worker’s direct employer, the subcontractor, or a general contractor. The site owner is typically not the legal employer of the worker.
In Entergy v. Summers, the Texas Supreme Court decided whether, when a site owner acts as a general contractor and provides workers’ compensation, that site owner is immune from a negligence lawsuit.
The Facts of the Case
The Entergy Gulf States Inc. v. Summers (Texas Supreme Court case no. 05-0272) case has been moving through the Texas court system for several years. John Summers, a contract worker, was injured while working in an Entergy plant. Entergy, the premises owner, had a contract with International Maintenance Corporation, Summers’ direct employer, to perform tasks such as maintenance and repair.
The law in question (Texas Labor Code section 406.123) protects general contractors from negligence lawsuits when they provide employees with workers’ compensation insurance. But the law does not say whether worksite owners can also be considered general contractors. The Texas Supreme Court affirmed its own 2007 ruling, reversing the court of appeals’ judgment in favor of Summers, and held that site owners can be considered general contractors in certain situations.
What the Court’s Decision Means
Ultimately, the Texas Supreme Court’s decision means that a worker whose employer contracts directly with a site owner, which pays workers’ compensation insurance for the worker, is not allowed to sue the site owner for negligence if it is the site owner’s fault that the worker got hurt. The worker’s only source of funds is workers’ compensation.
The Texas Legislature’s Action
The Texas Legislature is attempting to reverse this outcome. Helen Giddings, D-Dallas, and Robert Duncan, R-Lubbock, have each introduced a bill to change the law as it was interpreted by the Texas Supreme Court.
The Texas Legislature convened January 13, 2009, and the session will end June 1, 2009. The legislature will not meet again until January 2011. The time to pass bills is short. Even when a bill is likely to pass, legislators must work to ensure that it does not get lost among other important matters. If the legislature succeeds, however, the law on contract workers’ right could change very soon.
If Texas governor Rick Perry vetoes the legislation, the legislature will also have to act quickly to override the veto.
What You Can Do
If you have a strong opinion on the case or the pending bills, contact your legislator. If you are affected by the Entergy v. Summers decision or the pending legislation, contact a Houston Business Litigation attorney right away.
Now is the time to protect your rights.