Employers Should Stay Abreast of Developments in Legislation on Workplace Injuries authored by Jerome A. Brown

Decisions by the Supreme Court Texas and proposed legislation may affect employers' and employees' rights when an employee is injured on the job.

The Texas Workers' Compensation Act (the "Act") guarantees injured employees, who work for subscribing employers, limited benefits without having to prove fault.

In other words, an injured employee whose employer subscribes to workers' compensation insurance may recover certain benefits without regard to the employer's fault or the employee's negligence. However, under the Act, the employees are required to waive any statutory or common-law causes of action against the employer.

Texas is the only state in which an employer may decline to cover workplace injuries with workers' compensation insurance, thereby avoiding hefty premiums.

In such cases, the non-subscribing employers' employees retain the right to bring personal injury claims against their employers. In defending against such claims, however, a non-subscribing employer loses all traditional common-law defenses, such as the employee's negligence contributing to the injury. Thus the Act encourages employers to subscribe and penalizes those who do not.

There are options available to non-subscribing employers. Such employers may choose to provide an employee benefit plan for employees injured on the job.

There are several types of plans, including self-funded plans, alternative insurance coverage, catastrophic injury coverage and combinations thereof. If an employee wants to participate in any such plan, most plans require him to agree to limit his benefits to those under the plan and to waive his right to sue the employer.

Whether the employee's waiver of his or her right to sue his or her employer is enforceable has been the subject of controversy for years. Under current laws, there are no statutory provisions regarding the use of such waivers.

However, on March 29, 2001, the Supreme Court of Texas held that absent clear legislative intent to prohibit such agreements, voluntary pre-injury agreements of this type are enforceable, and thus the employee may not sue his or her employer for injuries sustained while on the job.

However, Texas may pass legislation that will have the effect of overturning the Court's recent decision. Currently, the Senate has proposed a bill that will make such pre-injury waivers unenforceable.

Senate Bill 624 would amend the Labor Code to prohibit the waiver of a cause of action against an employer who does not have workers' compensation insurance coverage to recover damages for personal injuries or death sustained by an employee in the course and scope of the employment, and any such pre-injury waiver would be void and unenforceable. If the bill is passed in its current form, the law will take effect September 1, 2001.

Turning to another issue affecting non-subscribing employers, in 1998, the Texas Supreme Court ruled that an employee of a non-subscribing employer does not have the right to sue the employer for discharging or discriminating against the employee because the employee is involved in an action against the employer regarding an employment-related injury.

Proposed legislation would effectively overturn the Court's decision. Specifically, if an injured employee has instituted an action against the employer based on the injury; hired a lawyer to represent the employee in an action; or testified or is about to testify about the injury, House Bill 2642 would prohibit non-subscribing employers from discharging or in any other manner discriminating against an injured employee.

If this bill becomes law under its current form, it too will take effect September 1, 2001.

The law is in a state of flux. The proposed changes to the law will have an impact on employers and employees. Interested persons are encouraged to contact their state representatives.

Employers who wish to stay abreast of these developments should seek the advise and counsel of an experienced attorney.