Workers' Comp Coverage: It's Not Just for Permanent Employees in ...

Last year, Gary Saunders of the insurance carrier CoVerica warned employers about a potential pitfall of using temporary workers: that they are not deemed to be employees for purposes of workers? compensation.

Thus, if [temporary employees] become injured they can still sue you for failure to provide a safe place of work, even though they are covered by the worker?s compensation of their employer (the temp agency). Even if you carry worker?s compensation, these employees are what the legal world calls 3rd parties, not really different from any other outside visitor to your factory, worksite, or office, etc.

The Texas Supreme Court, however, disagrees with that analysis. In an opinion last month, it continued the trend of construing the Texas Workers? Compensation Act ?liberally in favor of coverage? by holding that an employer who subscribes to workers? compensation insurance may not split its workforce in such a way that extends workers? compensation coverage to its regular permanent employees but excludes temporary or seasonal employees.? Port Elevator-Brownsville, L.L.C. v. Casados, ___S.W.3d__ (Tex.2012) (No. 10-0523; 1-27-12).

Port Elevator hired Casados as a temporary worker through a staffing agency.? Both Port Elevator and the staffing agency carried workers? compensation insurance.? When Casados suffered a fatal injury at Port Elevator?s facility, the carrier for the staffing agency extended coverage for benefits under its policy; however, the workers? compensation carrier for Port Elevator (Texas Mutual) denied coverage on the basis that Casados was an employee of the staffing agency and not an employee of Port Elevator.

Casados? parents sued Port Elevator for negligence, and the jury awarded damages of approximately $3,000,000.? Port Elevator appealed, arguing that it was an employer, despite the fact that its worker?s compensation carrier concluded otherwise.? Port Elevator asserted that the Casados family should have been entitled to benefits under its Texas Mutual workers? compensation policy as their exclusive remedy.

The Texas Supreme Court agreed with Port Elevator and reversed and rendered judgment in its favor. Reaffirming its decision in Wingfoot Enters v. Alvarado, 111 S.W.3d 134, 143 (Texas 2003),? the Court held that a temporary worker may be the employee of both a staffing agency and the client company, under which he is entitled to benefits under both workers? compensation policies.

The fact that Texas Mutual denied coverage didn?t mean that Casados wasn?t entitled to coverage under the Texas Mutual policy; instead, the Casados family should have pursued workers? compensation coverage under the Texas Mutual policy as its exclusive remedy.

Mary Barrow Nichols, general counsel and senior vice president for Texas Mutual, responded to the decision in a press release published by the Wall Street Journal?s MarketWatch: ?This decision is great for Texas workers because it assures them that they will be covered, and it reinforces a longstanding workers? compensation rule.???That?s a bit of a reversal for Texas Mutual, considering that the Casados family wasn?t assured of coverage the first time Texas Mutual reviewed their workers? compensation claim.

The Texas Workers? Compensation Act is in Title 5, Subtitle A of the Texas Labor Code. For the text of the Act and relevant annotations, pick up your copy of O?Connor?s Texas Employment Codes Plus (2011-12) today.

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Tagged as: insurance, Texas, Texas Employment Codes, Texas Supreme Court, workers' compensation

Source: http://annotations.jonesmcclure.com/2012/02/27/workers%E2%80%99-comp-coverage-it%E2%80%99s-not-just-for-permanent-employees-in-texas/?utm_source=rss&utm_medium=rss&utm_campaign=workers%25e2%2580%2599-comp-coverage-it%25e2%2580%2599s-not-just-for-permanent-employees-in-texas

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