Texas Employment Law Update : Texas Employment Lawyer & Attorney : Russell D. Cawyer : Kelly Hart & Hallman Law Firm : Dallas TX Labor Updates

Today the Texas Supreme Court held that when an employee is employed by two employers (a staff leasing company and client company in this case) and both employers have workers' compensation insurance, the workers' compensation exclusivity provisions apply to bar negligence claims asserted by the deceased employee's parents.

You can review a copy of the Court's opinion here.

Follow me on Twitter @RussellCawyer.

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Recently, the Supreme Court of Texas heard oral arguments in an interesting case regarding the outer limits of the attorney-client privilege with respect to a workers' compensation insurance carrier attorney's communications with its insured.  The communications at issue were made between the carriers and the insured/employer during the administrative proceeding before the Texas Workers' Compensation Commission over the compensability of a workers' compensation claim.  The case is styled In re XL Specialty Insurance Company and Cambridge Integrated Services Group Inc. (No. 10-0960).

At issue is a trial court's order that the workers' compensation insurance carriers turn over, in a civil lawsuit over the allegedly bad faith denial of workers' compensation benefits, communications they had with their insured/employer during the course of the underlying administrative litigation over the compensability of the workers' compensation claim. 

This case could have important ramifications for the Texas law of attorney-client privilege of communications between an insured and its insurance company's counsel.  Employers, and their attorneys, routinely communicate with insurance companies about the status of potential and pending claims.  Similarly, counsel for insureds routinely provide litigation updates about the potential strengths, weaknesses, potential exposure and likely outcomes on pending litigation.  These types of communications are normally treated as confidential and subject to the attorney-client privilege under the common legal interest doctrine (i.e., the privilege extends communications between parties or attorneys that share a common legal interest).  And while the case before the court is slightly different from the way EPL claims are handled because the insured/employer is not party (and is therefore a third-party) to the underlying lawsuit, the Court's pronouncements regarding the limits of the attorney-client privilege could have wide reaching effects on the manner in which employers communicate with their insurance carriers about pending claims.

We'll have more from this case when the Court renders its opinion in the case. 

Follow me on Twitter @RussellCawyer.

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Texas employers have the option of purchasing workers’ compensation insurance or going as a nonsubscriber.  Deciding whether to be a nonsubscriber or purchase workers’ compensation insurance requires an idea of what your anticipated workers’ compensation premium will be (usually obtained through your insurance broker) as well as understanding what legal protection a Texas employer gets by becoming a workers’ compensation insurance subscriber. Here is a quick summary of the differences between being a subscriber versus a nonsubscriber.  

Workers' compensation is a form of insurance purchased by employer to provide coverage for medical expenses, partial income and disability benefits for an employee suffering an injury or illness arising in the course and scope of his or her employment. In Texas, employers are permitted to opt-out of the state worker’s compensation. These employers are called nonsubscribers. There are advantages and disadvantages

The primary advantage of worker’s compensation coverage is that workers compensation subscribers (i.e., employers having workers compensation insurance coverage) cannot be held liable in court for employee injuries or illnesses that occurred in the course and scope of the employee’s employment. This protection does not apply to individuals who are independent contractors of an employer. The primary disadvantage to worker’s compensation coverage is its cost. Another disadvantage is that worker’s compensation subscribers cannot discriminate or retaliate against employees who report or have workplace injuries, and employees can sue employers if they experience an adverse employment action shortly after reporting or having a worker’s compensation claim.

Nonsubscribers, on the other hand, cannot be sued for discrimination or retaliation for taking adverse action against an employee that has been injured on the job.  They can, however, be sued by the employees for negligence and gross negligence when they are injured at work. The law is written to encourage employers to purchase workers compensation insurance. Consequently, nonsubscribers have few defenses to these claims such as claims for contributory or comparative negligence (aka “proportionate liability”) where liability is apportioned between the employer and employee based on percentages of relative fault. The only legal defenses a nonsubscriber has to a claim that an employee was injured in the course and scope of employment are that the employee was the sole cause of the injury or was intoxicated at the time the injury occurred. 

Understand that your general liability, homeowners or umbrella insurance policies alone do not provide coverage employee injuries or illnesses. Most such policies have exclusions that do not cover claims made by employees or those otherwise providing services for the employer (i.e., independent contractors). Whether to purchase worker’s compensation insurance is an important business decisions and the pros and cons of that decision should be weighed carefully.

Follow me on Twitter @RussellCawyer.

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In today's Supreme Court of Texas orders, the Court held that the State of Texas (including its political subdivisions such as counties) is immune from worker's compensation retaliation suits.  You can read a full copy of the Court's opinion in Travis Central Appraisal District v. Norman here.

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For more than 15 years Texas employers have used the application of uniformly enforced neutral absence control policies setting a maximum duration an employee can be away from work as a defense to workers' compensation retaliation claims.  The defense was first solidified by the Supreme Court of Texas in in its 1996 Continental Coffee Prod. v. Casarez case.  See 944 S.W.2d  (Tex. 1996).  Employers who end the employment relationship with a worker's compensation claimant for violating reasonable absence control rule will not normally be liable for workers' compensation retaliatory discharge claims if rule is uniformly enforced (i.e., it is applied to all types of absences and not just those arising from on-the-job injuries).  Following Casarez Texas employers routinely included neutral policies setting forth neutral absence control policies that set maximum durations of time for employees to be away from work (excepting from the maximum duration certain types of statutory protected leaves like FMLA and USERRA leave).

The continuing viability of the neutral absence control policy is in jeopardy with the passage of the ADA Amendments Act.  The ADA Amendments Act substantially expanded the number of employees who can claim disabled status and are therefore entitled to reasonable accommodation.  Reasonable accommodation may include modification of employer policies that might enable the employee to be able to return to work --including, perhaps, an extension of a leave of absence past the maximum set forth in the employer's written policies.

The EEOC has been targeting inflexible leave of absence policies as violating the ADA with greater frequency.  Last September the EEOC sued UPS challenging the company's policy of allowing a maximum 12 months of medical leave claiming that the policy does not adequately accommodate employees with disabilities.   The EEOC also sued Supervalue, Inc./Jewel-Osco over their leave of absence policies that limited the amount of leave an employee could take and challenged another policy that limited participation in the employer's light duty program to only those employees recovering from a work-related injury --something court's had previously held was permissible.  The EEOC also challenged another leave of absence policy it characterized as "inflexible" on behalf of a pregnant employee against D.R. Horton by using the ADA rather than the Pregnancy Discrimination Act.  Indicating that the EEOC's efforts are having some success, the EEOC recently obtained a consent degree against Sears and a $6.2 million settlement of ADA claims arising from Sear's use of an inflexible workers' compensation leave of absence policy that terminated the 235 employees upon the exhaustion of the leave of absence period. Clearly, inflexible neutral leave policies having setting forth maximum durations for leaves of absence are in the cross-hairs of the EEOC.

The ADA Amendments Act and challenges to neutral absence control and maximum duration of leave policies put Texas employers to a Hobson's choice.  The uniform, mechanical application of such policies provide an employer a defense to a Texas workers' compensation retaliation claim.  Now, however, the policy might give rise to a claim of failure to reasonably accommodate an employee with a disability who needs an extension of the maximum leave period to return to work.  Employers should reevaluate their leave of absence policies to make sure they are sufficiently flexible as to provide reasonable accommodation to qualified individuals with disabilities.  By making exceptions to neutral absence control or maximum duration of leave policies, the exceptions may dilute the protections those policies once provided against workers' compensation retaliation claims.  

Photo courtesy of Sharon Ellman, Ellman Photography.

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On April 3, 2009, the Supreme Court of Texas held that a premises owner who hires contractors to perform work on its premises and enters into agreements whereby the owner will provide workers' compensation insurance to the contractor's employees is entitled to the benefit of the exclusivity provisions of the workers' compensation act and cannot be sued for negligence by the contractor's employees.  In other words, a premises owner who contracts to provide workers' compensation for its contractor's employees gets to stand in the shoes of a general contractor and claim the benefit of the exclusivity defense.  For more commentary and analysis on this opinion, see the Supreme Court of Texas Blog.

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